More on the Team Lotus Caterham deal

The decision of the High Court in London on the question of the use of the name Team Lotus in Formula 1 is coming shortly, but Tony Fernandes and his business partner Kamarudin Meranun are not really bothered about the result. They seem to be fairly confident that they will be given the right to use the Team Lotus brand, not just in Formula 1, but also in all aspects of business. If this is the decision taken then the only real point of interest in the affair will be what the judge decides about Group Lotus’s use of Team Lotus history as a marketing tool for its products in the course of the last 18 months and whether or not he feels that Group Lotus should be allowed to use a black and gold livery in F1. Black and gold is a livery long associated with Team Lotus and he may deem this to be some form of passing off. If that happens then Renault will need to change its appearance.

There is probably nothing much that can be done about Group Lotus wanting to sponsor an F1 team other Team Lotus, illogical though that may be. What is clear, even at this point, is that the Renaults should not be called Lotuses. Group Lotus obviously wants people to confuse Renaults with Lotuses, but one does not call a Ferrari a Marlboro or a McLaren a Vodafone. Lotus is the sponsor, not the car.

Anyway, Fernandes and Kamarudin are going to start building road cars. This is no real surprise. They have introduced the emerging Asian middle class to such things as credit cards, mobile phones, cheap flights, cheap hotels and even hire cars. Their next move, albeit with a different brand name, is to create low-cost sport cars for those who can afford them. It is a good moment to be doing it and if the price is right they will be successful. The original plan was to do that with the Lotus brand. This has been largely wasted in the last 15 years, under Proton ownership. The aim of buying Lotus was to give the Malaysian automobile industry some more technology, but that did not help a great deal. Group Lotus’s parent company Proton still builds cars that are not really competitive in the open markets. If there were not restrictions in Malaysia the place would be awash with better products from Nissan and Toyota at the same price (or less) than Proton. Reviving Lotus is a strange idea, particularly as it means moving the company up through the luxury brands to a level at which it will be almost impossible to compete, even with an audience in Asia that does not really know that a Lotus and a Ferrari are not the same thing.

Fernandes’s vision for Lotus was different and indeed seemed to be much more inline with the original Chapman concept of building light sporting cars at a price that people can afford. As Group Lotus has gone off on its wild goose chase to become Ferrari, Fernandes and Kamarudin have been left wondering what to do. Their response is an intelligent and logical one. They will build up another brand and wait to see whether Lotus comes on the market. They still own Team Lotus and Caterham Cars is the perfect solution because Caterham grew out of Lotus when the original Lotus decided to leave the Lotus 7 behind and build fancier models. The Lotus 7 became the Caterham Super 7. Caterham’s Graham Nearn and his engineers evolved the capabilities of the car, increasing the engine size and tweaking the chassis.The cars have continued to sell well ever since and have become a major part of club racing in many countries since the launch of the first Caterham one make series in 1986. There are currently over 700 registered owner drivers racing in 17 such championships in nine countries, including the UK, France, Germany, the United States, South Africa, Japan and in the Gulf region. The road cars are exported all over the world with important markets being France, Japan, Germany and the United States. There are dealerships in other far-flung places but there is plenty of potential to expand, particularly in Asia.

In 1987, in need of more production capacity, Caterham moved to a much larger facility in Dartford, Kent, 25 miles from the town of Caterham and success was such that in 1993 the firm won a Queen’s Award for Exports.

In the mid 1990s Caterham decided to look at building a more styled version of the Caterham Super 7. This was called a Caterham 21 and was unveiled at the British Motor Show in 1994. It was billed as a car that offered “Caterham motoring in a more practical format”. Only around 50 of the cars were sold despite plans for a production run of 200. Although not a success at the time, the Caterham 21 is now a sought-after collector’s car.

Nearn retired in 1997 and in 2005 the business was sold to a management buy-in, led by former Ford Motor Company executive Ansar Ali, a former general manager of Lotus Cars.

Fernandes and Kamarudin will give details of their plans for the company tomorrow at Duxford aerodrome. It is anticipated that the Formula 1 team will become known as Caterham Team Lotus. This programme will thus support both the Team Lotus and the Caterham brands. And there is little doubt that if Group Lotus’s current expansion plans flop Fernandes and Kamarudin will be there to pick up the pieces and turn the company around, just as they did with AirAsia 10 years ago.