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Why Would Volkswagen Want To Buy Lotus?

 
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Lotus has led a troubled existence over the past few years, though some might argue it goes all the way back to the time when Colin Chapman was at the helm, building ever-lighter and more dangerous race cars--all while using drugs and lying about anything that suited him, according to biographer Mike Lawrence.

But more recently, the problems have centered around Dany Bahar's direction, or misdirection, of the company. Recently fired for misuse of company funds, Bahar had set out an ambitious five-year plan to debut six new models. But along with the new models, Bahar envisioned a sharp change in the brand's identity, moving from relatively inexpensive, lightweight, sport-focused cars to more luxurious, expensive, and exclusive vehicles. Many fans bemoaned Bahar's input.

Now freed from Bahar, current Lotus parent DRB-Hicom has chopped much of Bahar's new car plans, but at the same time, is expected to reduce Lotus' involvement in motorsports as part of broad cost-cutting measures. Despite DRB-Hicom's stated commitment to the brand, and about $155 million worth of cash already invested in the brand, speculation of a sale to another carmaker has persisted.

The latest to join the fray is Volkswagen, by way of a confidentially-sourced report from Manager Magazin, via Reuters, and even then, only as a derivative of speculated interest in the intermediary owner of Lotus, Malaysia's Proton.

On one level, VW's interest in Proton makes obvious sense, giving the company an established network for vehicle sales in southeast Asia. VW even pursued, but ultimately failed to come to terms on, a purchase of Proton back in 2007. But pivoting from that seemingly sound business case to a highly speculative purchase of Lotus through Proton--which is mentioned only in passing in the Reuters report--has so far been largely the domain of online outlets.

So why might Volkswagen be after Lotus? It's not obvious at all, with Porsche already providing a very successful sports car division with the group. Lamborghini fills the exclusive, expensive supercar niche well. Audi produces luxurious and sporty mainstream luxury vehicles. What could Lotus add to this mix?

The answer, as far as we can tell, is nothing. Any interest in Lotus at VW would have to be motivated by something outside the retail case, with our best bets being motorsports or engineering.

But even then, why Lotus? Volkswagen already has strong motorsports involvement through all of its major brands, with GT racing involvement from Porsche, endurance prototypes at Audi, sedan racing at VW, and a range of series, including a one-make championship, with Lamborghini.

So that leaves engineering. Lotus Engineering, a separate division of Lotus Cars, is an innovative, high-tech band of automotive and transportation sector boffins that have designed some truly impressive things, often under contract for other car companies. But Volkswagen has its own very deep engineering pool, with widespread success particularly in the field of engine design. Does a global carmaker with its fingers in nearly every conceivable pot really need to buy a southeast Asian car company just to add a partial interest in a building full of engineers? It seems, at best, unlikely.

Ultimately, if DRB-Hicom lets go of Proton, and if VW is the buyer, and if Lotus goes with Proton as part of the sale, and if VW takes more than a minority interest in Lotus, we might see something of interest come of the deal. But that's a lot of ifs.

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  1. They'd bring something that VW has been wanting in it's motorsports division. An F1 Team! There have been rumors of them wanting to get into F1, this would be a perfect chance seeing the team is already put together, and doing well.
     
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