Jean-Marc Gales reveals bold future for Group Lotus
PUBLISHED: 13:27 18 December 2014 | UPDATED: 13:27 18 December 2014
The boss of Group Lotus has unveiled bold plans to steer the sports car manufacturer back to profitability within the next three years.
Chief executive Jean-Marc Gales said his turnaround strategy to boost revenues and strip away costs would deliver a new generation of market-leading sports cars, whilst moving the company onto a firmer financial footing.
But his actions to secure the future of the business have come at a cost to its Norfolk headquarters, where nearly a quarter of its staff have been made redundant.
The company announced in September that it would slash 325 staff from its global workforce of 1,215 – a move which has led to 252 job cuts locally.
It comes as its latest set of accounts showed losses for the financial year had gone down from £167.8m in 2013 to £71.1m to March 31 2014.
Mr Gales – who will make a new product announcement at next year’s Geneva motor show – said the company would drive revenue growth by delivering new cars and expanding the number of dealers it has across the globe.
He said staff had been “blown away” by its future plans for the company.
“We really wanted to make sure that those who are here now know where we are going, they know where the future of the company is to give them confidence.
“Because there have been promises lately. But the staff agree that our plans are not promises but reality.”
“The target for the company is a very clear cut one,” he added. “I have a target with my shareholders which agreed it and have full confidence in the strategy and in the management and they support it 100pc.
“We want to become operational cash-flow positive next financial year, 2015-16, and profitable in the financial year of 2016-17. Profits which will come from our basic operations of buying and selling cars, and that is important.”
Group Lotus has seen its car sales increase 55pc this year to 1,448. It hopes to sell 2,000 cars by the end of 2014.
The sales boost has come from dealership expansion, with 27 more dealers signed up this year taking its worldwide total to 165, Mr Gales said.
Previously, Lotus did not have a dealership in many key European cities, including London, Paris, Madrid and Stuttgart.
It hopes to have 280 dealers by the end of 2016.
He said: “The dealers say we see a product, we believe in the product, we believe in the brand, we believe in the strategy that the company has and we are signing up for selling Lotus – and that is very positive. We are at 165 now, but the objective for the end of March next year is 188.”
The sports car brand – which established its headquarters at Hethel, near Wymondham, in 1966 – has moved to cut costs by reducing its workforce and reviewing its cars to find new ways to improve performance.
However, the company has reduced the impact of the proposed redundancy announced in September from 325 to 285.
“The redundancies is something we don’t like to do because we know the consequences of this – and we deeply regret the consequences and the impact on the employees and their families,” Mr Gales added. “But it was necessary to secure the future of the company.”
“We are going to make sure that Hethel becomes the centre of Lotus worldwide. It is a clear commitment to Hethel, to Norwich and to Norfolk. We are going to make sure that more people come here to collect our cars.
“We still have the Lotus Driving Academy on the track, of which want to double its revenue within the next two years, which is a commitment to Norfolk as well.”
Mr Gales, who confirmed that the company was currently looking to recruit 30 highly-skilled workers in marketing and engineering, said Lotus would honour its agreement with the government to create 300 jobs in exchange for £10.44m from the Regional Growth Fund (RGF).
By the end of March next year, Group Lotus will employ 780 people in the UK from a global workforce 930.
Colin Chapman, the founder of Lotus, died 32 years ago yesterday.