Lotus is much more than a manufacturer of affordable supercars.
To anyone with even a passing interest in the UK automotive industry, Lotus is something of a national icon; a niche manufacturer of affordable supercars that wears its history — it was formed by Colin Chapman behind a North London pub in 1952 — proudly on its sleeve. But there is much more than meets the eye to the Norfolk-based carmaker.
Through its consultancy arm, Lotus Engineering, the group has had a profound and largely unnoticed impact on the wider automotive industry. An estimated 25 per cent of all cars on Europe’s roads now have something developed by Lotus beneath the bonnet and, against the odds, the division — which accounts for around half of the group’s activity — has actually grown over the past few years. Last year, against a backdrop of significant decline elsewhere in the industry, sales rose by 23 per cent.
Much of this growth has occurred under the watchful eye of Lotus Engineering’s affable managing director, Paul Newsome. ‘When I joined,’ he told The Engineer, ‘the vast majority of the work we were doing was for our shareholder [Lotus is owned by Malaysian automotive group Proton] or for our own products. Over the last three years we’ve built up our third-party business to the point now where 70 per cent of the work we do is for outside customers.’ In difficult times, it’s quite an achievement, but Newsome plays down any suggestion that he’s performed a minor miracle. Instead, he puts the scale and speed of the recent growth largely down to the fact that Lotus was growing the third-party work from a low start point. ‘We had evolved into a business that primarily did work for its shareholder and its own products, the opportunity — whether it was in a market that was declining or not — was always very, very good.’
Another reason for the growth, he claimed, is that Lotus Engineering’s expertise is more relevant now than at any other point in its history. ‘Lotus, you could argue, invented downsized, pressure-charged engines. It invented performance through lightweight and because of people’s desire to reduce their carbon footprint, because of CO2 targets in the industry and because of the desire to produce faster performing cars at the same time, we actually offer a whole load of solutions and history that people just can’t compete with.’ Plus, despite the difficult economic conditions of the past year, the downturn has, he said, created some opportunities. ‘Quite a few people have seen that the major incumbents in the automotive industry have declined and have seen this as their opportunity to get into the market.’ A good example is the Tesla Roadster. Designed by Tesla Motors in the US and built by Lotus in the UK, the fully electric supercar — capable of 0-60mph in 3.9sec and able to do 200 miles on a full charge — has emerged as a standard bearer for the electric vehicle.
For continued growth, Newsome, along with his industry colleagues, is looking primarily to China. ‘In terms of the total industry and the engineering outsource work in automotive, you’d have to say that China is the biggest opportunity right now. The Chinese automotive and engineering market is increasing, they’ve barely noticed the economic downturn.’ Lotus is currently working with several clients in China, including Shanghai-based luxury coach manufacturer Youngman, which hopes to produce 500,000 cars a year for the Chinese automotive market.
But he also believes that there are still opportunities for the company closer to home. ‘If you’re entering the niche market with a product that has niche appeal where low-volume techniques are important, methods to market are important and interesting concepts are important, then we offer a fairly unique input and I believe we can make use of that in the established markets to a greater level.’
Chief among these opportunities, believes Newsome, is the company’s work on series-hybrid drive-train technology and, specifically, the development of range extenders — small internal-combustion engines that can be used to charge up the batteries of electric vehicles while they’re on the road. Through the Technology Strategy Board-funded Limo Green project, Lotus engineering is developing such an engine for demonstration on a Jaguar XJ.
For Newsome, this is the stepping-stone technology that addresses customer concerns over the range of electric vehicles. The fact that the engine’s design can be relatively simple is also a source of considerable commercial optimism. ‘So many engines today — because they have such multiples of load conditions to cater for — end up with hugely complicated valve-train and fuel-injection systems in order that they are reasonably efficient,’ he said. ‘Because it’s not connected to the drive train, the range-extender engine is completely oblivious to those requirements. And because the job is kind of generic, it has multiple applications.’
Newsome believes that the company’s lightweight expertise — the entire Exige, Elise range weighs under 1,000kg — is also going to be of increasing value to the rest of the car industry. ‘The safety movement that’s occurred over the last decade increased the weight of everything — we now need to start to reverse that trend. The difficulty with a lot of the technology that’s being applied to powertrains to get to CO2 figures is that they add weight — there is plenty that can be done. If you make the car lighter, it’s a virtuous circle. If you can take weight out you can take more weight out, because you’ve reduced the requirement of the rest of the car to do something.’
Q&A – Electric avenues
Is the future electric?
We will come to a point in time where almost everything is electric. Our view at the moment is that electric vehicles for primarily city and known cycle use will become extremely important. Making those viable for larger cars for families then a gasoline- or diesel-powered series hybrid — with a conventional IC engine driving a generator — makes that an entirely usable car.
Does this spell the end of the road for exciting motoring?
I think there’s an impression that it’ll take all the fun out of cars and I don’t believe that at all. Tesla is an interesting example. When Top Gear tested the Tesla it was pretty obvious they weren’t keen on the idea of an electric vehicle, but the Stig still got it to lap the track faster than a 911 GT3 — that’s not dull. It’s a worthy solution but there’s no reason why it can’t be tremendous fun.
Do you think the Tesla has helped change perceptions about electric cars?
Lotus’s exposure to electric vehicles has started at the premium end of performance. If your initial exposure to electric vehicles is a g-Wiz, for example, I think you’ve probably got quite a constrained view about what it’s capable of. The way we have approached this has taught us lot about how capable a technology it is. Tesla taught us an awful lot about electric vehicles and put us in a very strong position for the electric vehicle market because it’s one of the first competent, truly capable electric vehicle products in the marketplace.
So is a fully electric Lotus on the cards?
We’re developing the technology forwards. All of the parts we’ve used so far have been on customers’ vehicles. We are looking at it very closely. Most of what we are going to be driving in the future will be an electric vehicle, so I would anticipate that it’s inevitable — it’s just at what point in time we make that transition. We will probably do it by derivative first rather than going across the board, but all of the information tells you that all of us will be driving electric cars in 30 years time — so why would a Lotus be any different?
What does the growth of electric mean for the UK car industry?
I’m of the view that electric vehicles aren’t something different, they are merely the next generation of powertrain. They make a difference to what people drive but I don’t think they’re going to change the shape of the industry. If 90 per cent of what’s going to be driven in 30 years time is electric, that’s not going to be because one manufacturer’s done it. I think, fundamentally, the structure of the market and the different brand positions will be there, they’ll just be driven in a different way. I read it in the way that the industry took on safety requirements. In the 1960s you didn’t have seatbelt, never mind airbags, and you could argue that Volvo redefined the market, but it didn’t change it. The other brands continued and they all adopted it. It’s a requirement and the industry responds. It always has and I think it will respond quite quickly.
Biography of Paul Newsome, Managing director, Lotus Engineering
Studied Mechanical Engineering at Sheffield University
1984 Rover Group
1997 BMW where he worked on, among others, the relaunched Mini Cooper
2001 Jaguar Land Rover, group chief engineer, Advanced Product Creation at Jaguar and Land Rover, where he was responsible for all research and development
2007 Appointed managing director of Lotus Engineering. Responsible for strategic business plan, global engineering sales on third-party client-consultancy projects and, together with Lotus Cars, the delivery of the Lotus Evora