Lotus: reports of our death are greatly exaggerated

Lotus has rolled out a unique way of defusing rumours about the company's financial health. Viral marketing has been a long-standing tactic to promote a company's goods or services, but the sports car maker has gone one step further now, with viral spin.

“They had to do something”, said Edward Rowe, local spokesman for Lotus importer Ateco. “You can see from the way Twitter flouts super injunctions the degree to which new media functions outside the old framework.”

Rowe was talking about what the venerated British sports car maker sees as a deliberate campaign to turn hard times into ruinous ones in an interview with motoring.com.au. "Super injunctions" are the legal tool of choice for those looking to completely smother public exposure of an issue in the UK.

The days of a claim by a newspaper, a rebuttal by press release and a polite correction are gone, Rowe continues. “If Lotus had responded with an old-fashioned press release it wouldn’t have made a ripple. If you want traction now against this kind of thing, you have to go viral.”

By making it go ‘viral’, you have to pique the punters’ interest. Unable to take the sex tape option, Lotus went in for that other favourite: invective. Thus did land in scribes’ inboxes last week something marked ‘press release’ but oddly free of the bland platitudes, motherhood statements and polysyllabic polyfilla that are the normal mark of such fare.

In its place, a piquant page of rebuttals – headlined ‘Never let the facts get in the way of a good story…’ – to what it calls ‘the over-active rumour mill’ operating through social and other digital media, ‘seriously damaging our business reputation, image and credibility’.

At the centre of the controversy is a cast of many. It hails from the sale in Malaysia of parent company Proton to auto conglomerate DRB-Hicom, one of that country’s largest corporate entities (alongside indigenous automotive projects, they run assembly operations for Honda and Mercedes-Benz). Proton has owned Lotus since 1996.

The rumours centre mainly around DRB’s unwillingness to assume Lotus’s debt burden, reported by Autocar and other media to sit around £200 million, with resulting glances being cast in the direction of administrators and potential suitors over Beijing way.

Further rumours cast doubt on the tenure of Group Lotus CEO Dany Bahar and Proton MD Dato’ Sri Syed, and the relationship between Group Lotus (car company, engineering horn-rims) and Team Lotus (F1 team, now owned by Luxembourg VC outfit Genii).

The statement describes speculation about Bahar and Syed going as ‘rubbish’. Group Lotus reassures readers of its ‘continued commitment’ to F1, despite what they call a ‘reshaped’ commercial relationship, with the Team winding up its title sponsorship deal with the Group while the latter was unsure of its future. Group Lotus’s statement cites a £30m, three-year loan to the F1 team – with the team’s entire inventory as collateral – as all the evidence needed of its continued good faith.

Lotus uses the statement to point the finger for much of the mongering to UK motor sport journalist Joe Saward and Malaysian businessman Tony Fernandes, the head of budget airline Air Asia.

Fernandes was known to be sniffing around the automotive market, particularly around Hethel. His interest extended to running the 2010 F1 season using Lotus Racing naming rights bought from the Group.

Things began to get ugly when Group Lotus bought a stake in the Renault F1 team for the 2011 season. An angry Fernandes bought the unconnected Team Lotus name to avoid being barred from using the all-important five-letter brand. "We've invested a lot in bringing Lotus back into racing,” he told media. “We've acquired Team Lotus, have spent a lot of money building this brand up, and it's not something we want to give up.”

To prove his mettle, he bought Caterham, the tiny UK constructor that’s traded on its association with Hethel since buying the rights to the iconic Seven open-wheeler from Lotus founder Colin Chapman in 1973.

Group Lotus got litigious. By March 2011, the argument over the name was in the British High Court. By May, everyone was a winner. Fernandes had won the right to retain the Team Lotus name for F1, and the use of a Lotus chassis. The Norfolk maker was allowed to use the name in conjunction with Renault's, while keeping its signature green/gold and black/gold liveries.

For 2012, the Lotus-Renault team resumed full rights to the name, renaming itself Lotus F1. Fernandes has had to make do with Caterham F1 – the subject of a spot of gloating in last week’s statement. “Perhaps he’s still frustrated about owning Caterham instead of Lotus and the fact that he fights HRT and Marussia instead of Mercedes and Ferrari in F1,” it giggled.

But Group Lotus reserved the snarkiest parts of last week’s statement for Saward. Over the course of the argument and its aftermath, he’s been passing prodigious comment on the matter through his well-read blog.

By Lotus’s reckoning, he’s been passing it off as independent comment even after being recruited by Fernandes into a directorship of Caterham. Saward says he’s never hidden that relationship. The reality appears to bisect the two claims. There’s a bit of the ‘Why didn’t you tell me? ‘Cos you didn’t ask’ about his commentary on matters Lotus in recent months. He’s only come out and confirmed it directly in the context of his commentary since Lotus.

It is possible to find confirmation from Saward of his position with Caterham, but he would have done well to make that crystal clear. That means not just inserting in the ‘Blog Rules’ section of his blog, but in as part of the content where it matters.

No one denies Lotus is in the middle of difficult period. But Rowe says Lotus’s detractors are capitalising on a key difference in M&A ('mergers and acquisitions') protocols between Malaysia and other countries like Australia. “Here, the due diligence takes place before anyone makes an announcement. Over there, they sign the contracts and make the announcements first, then get going on the audits and the bookwork.”

And that, he says, is where everyone is now. Well sort of, anyway. Late last week, Luxembourg-based Genii Capital, Group Lotus’s F1 business partner by virtue of the stake it acquired in the Renault team a year before Lotus came along, announced it's looking over the books with a view to making an offer.

In truth, one knows where this will end up. For its part, Lotus itself admits the Proton buyout could not have come at a worse time. But as far as it’s concerned, it’s business as usual, shutting up and getting on with things a day at a time in Hethel while the folks in KL go through the books.

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