Lotus for sale yet again? That'll be the Daewoo
Wednesday 13 March 1996
The legendary British sports car manufacturer Lotus is on the brink of a takeover by the South Korean motoring giant Daewoo, starting another chapter in the company's uncertain history.
Having passed between owners in America and Italy - not to mention a short-lived link with a mysterious Indian prince - Lotus is close to being bought by the fast-emerging group, which last year launched an advertising blitz to market its cars in the UK with the slogan "That'll be the Daewoo".
Neither company would confirm nor deny the sale, though it appears that only minor disagreements over the final terms stand in the way.
Lotus, founded more than four decades ago by the engineer and designer Colin Chapman, has been struggling for years in an industry where only the giants seem secure.
The company announced at last week's Geneva Motor Show that it was negotiating with potential investors to put money into new products and expand Lotus's renowned engineering department. Daewoo has long wanted to upgrade its outdated technology, and Lotus's reputation for advanced automotive engineering is seen by analysts as making a good fit.
Despite all the uncertainty, Lotus has maintained a reputation for producing cars with appeal. The company, which employs 1,000 people in the UK, last year launched its new Elise and the 8-cylinder Esprit models to world- wide applause.
Although the success of the cars took earnings from pounds 3.6m to pounds 5.8m, it has done little to ease the finances of Lotus's troubled owners. It seems that Lotus has only ever known financial dramas, which have been an almost yearly occurrence since it survived the 1973 oil crisis that swept away many other specialist car makers.
American Express, the US financial services group, came to the rescue in 1975 when Lotus fell deep into the red. Two years later, an American bank emerged as a backer.
In the late Seventies, Lotus teamed up to work on the De Lorean car project in Northern Ireland, only to see it fail spectacularly. But the De Lorean Motor Company had given Lotus a pounds 12m contract, a financial lifeline at the time, enabling it to limp into the Eighties.
In 1986, Lotus, one of the smallest car companies in the UK, eventually wound up in the hands of the largest in the world, America's General Motors. But while the Lotus marque continue to win praise from sports car drivers, financial success eluded the company and in 1991 losses topped pounds 36m. When General Motors restructured three years ago, Lotus was high on the disposal list.
Two years ago, it was bought by Bugatti Automobili of Italy. It brought together two of the greatest names in motor racing, but Bugatti hit the financial rocks. Lotus was ring-fenced against the Bugatti losses, but there is still some confusion about who actually owns the British company.
At one stage last year, a self-styled Indian prince by the name of Shivcandra Rao III claimed to have bought Lotus. Yet no money seems to have changed hands and he has now disappeared from the scene.
Analysts believe Daewoo, which has deep pockets, is now the company's best hope.
As one motoring expert put it yesterday: "Lotus would add a bit of gloss to the lacklustre image of Daewoo's cars. And Daewoo has some serious money to invest. They need each other."
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