Group Lotus has money to spend and plenty of it by all accounts. The aim is turn the Lotus brand into a rival for Ferrari. From what I can gather, part of the plan now involves taking over the Renault F1 team. There is logic in this as an F1 team is the perfect way to promote an automobile brand, particularly if sponsorship and TV rights money are paying for it. It is basically free advertising and while performance is important, the fact that a manufacturer is in F1 is in itself a bonus. And if that sounds far-fetched, ask yourself this: when was the last time you saw a Ferrari advertisement in a newspaper or magazine, or on television? When was the last Ferrari billboard spotted? Ferrari is happy to be involved in the advertising programmes of others, who want the brand association, but F1 is its marketing strategy – and that is incredibly successful.
Lotus wants to do the same, perhaps only because the people running Lotus were formerly employed (albeit briefly in some cases) at Ferrari. The fly in this ointment is that Tony Fernandes is already in Formula 1, using the Lotus name, and there appears to be no reason why he should not be doing this. The courts in England are examining who has what rights, but the signs are that Fernandes has a perfect right to do what he is doing. This may be inconvenient for Group Lotus, but it is probably wiser for the company to find a way to work with Fernandes, rather than trying to bully him into submission and claim the history of Team Lotus, which may not belong to the Group. These things will sort themselves out in court in time, but it is worth noting another emerging story.
The other day I received a press release about a planned new motor racing series in India. It is called the Indian Motorsports League (IML) and the press release said that it is made up of “a global group of racing, engineering and marketing professionals”, who want to create a sports car series which will race on circuits across India, with eight races in 2012 and as many as 25 by 2015. When you cut through all the jibber-jabber the concept is as follows: teams and circuits will pay to be part of the series. Cities will buy into the idea because of the economic benefits of involvement, in tourism and job creation. Teams will get involved because they will get money from the promoters. Fine idea. Bernie Ecclestone has been doing it very successfully for decades in F1. The difference is that the cars will be identical, which makes this idea more like an A1GP for sports cars, which is a less certain business model.
The IML press release talked of money being used to create a 350-acre motorsports campus with a racing circuit, with a racing school, plus a technical college, to train engineers, officials and volunteers, and a museum.
The only thing that made me sit up and take interest in this story was that nowhere was there any mention of who was involved. And, in my experience, when that happens there is always a story, because someone somewhere is hiding something. So I decided to delve a little into the subject. This revealed nothing, until I stumbled upon a defunct management consulting firm called Proesq Ltd, which closed down at the end of last year. A website called www.proesq.com mentioned a “Project IML” which it described as being “a sports entertainment business concept and master planning for the event format, venue locations and technical infrastructure”. There was no indication as to who was involved.
Curiouser and curiouser…
A little more research revealed that the man behind Proesq Ltd was an engineer called Sanjay Walia. No surprise there. This is a suitably Indian name to match the concept. What was interesting was that Walia was obviously British-based, having studied technology management at Liverpool John Moores University, before spending six years with BMW, then Dana and later India’s KLT Automotive. He then set up Proesq for two years before shutting it down and joining… Group Lotus.
Lotus boss Dany Bahar is a man who would understand Walia’s idea. When he was at Ferrari Bahar was responsible for the decision for the company to become involved in A1 Grand Prix Series, although this turned out to be a less than brilliant strategy as A1GP went to the wall, owing rather a lot of money. Ferrari was very discreet about this mess, but did point out, just before the debacle, that there were “things that still need to be finalised concerning the engine supply and the licensing agreements which were valid in the past”. Today there are “twenty Ferrari engined single seat race cars, built in 2008 based on the F2004 Formula One Ferrari designed by Rory Byrne, Ross Brawn and Aldo Costa for the 2004 Formula One season” offered on the Internet by the liquidators of the A1 companies. One or two of these have been sold but they have not raised much money.
Lotus has already signalled its intention to enter open-wheeler racing, with its IndyCar team running in the United States this year, its plans for GP2 and GP3 in 2011 with Nicolas Todt’s ART Grand Prix and the launch of its Lotus 125 “Formula One-style track day car”, which is priced at £650,000 and, coincidentally, looks rather similar to the old A1GP car, although it has a different engine and different bodywork.
One can imagine that a Lotus one-make sportscar championship would be a useful tool to increase the company’s sales in India, a rapidly-developing economy which boasts 69 billionaires (according to Forbes) and 126,700 millionaires, according to Capgemini and Merrill Lynch Wealth Management. Ferraris will not be sold in India until January next year so there is a good opportunity for Lotus to be on almost equal terms with the venerable Italian carmaker. Earlier this year there were reports of a joint venture between Indian utility vehicle manufacturer Mahindra & Mahindra and Proton to sell Lotus cars in the Indian market. Mahindra & Mahindra is rushing to get into the fast-expanding Indian automobile market and is in the process of completing the purchase of defunct South Korean firm Ssangyong. It has also recently acquired REVA, which is involved in the development of electric cars.