THEY SAY INTERVIEW

They Say

MAN WITH A PLAN Under Jean-Marc Gales, sales are up, costs are down, and cars are launching on time.

Jean-Marc Gales CEO, LOTUS

Lotus is steadily becoming the carmaker we all once thought it was. According to CEO Jean-Marc Gales, it’s once again all about simple, ultra-lightweight cars with transcendent handling.

Gales was hired by Lotus’ Malaysian owner, DRB-HICOM, after the ouster of Dany Bahar, the CEO who wanted to shift Lotus toward a Porsche-like range. Gales is a lifelong Lotus fan and a self-confessed übergearhead. He trained as an engineer, but he’s had senior posts in other disciplines for a number of carmakers, including as global head of sales for Mercedes-Benz.

He draws two solid lines in the sand very early in our interview. First: “Any car we launch in the next two years will be lighter and faster than its predecessor.” This applies to new versions of the Elise, Exige, and Evora. And second: “I want to sell 3,000 cars a year.” What will these revised cars be like? “Very advanced but having nothing superfluous,” he says. “They might lose some of the ride comfort they have now but will gain massively on handling. I sleep very well at night knowing the engineers who sign off the handling.” There will be obvious salesboosting variants, including an Evora convertible and additional track-biased derivatives.

Should Lotus build its own engine? “There is absolutely no need. Why spend hundreds of millions of dollars on that? I can buy one and tune and calibrate it.”

What about the aluminum structure under all Lotus cars? “The Evora tub meets regulations until 2020, and we will likely stay with aluminum beyond that. It’s similar weight and strength to carbon fiber but onethird of the cost.”

Lotus has lost money every year for the past two decades. Bahar stated emphatically that Lotus could never survive on its ultralightweight range, simply because the global market was insufficient for the company to break even. Gales says the exact opposite, that the market for lightweight cars is just fine provided you run the company well.

“I was surprised by the lack of process when I came here,” Gales says.

Already sales are up. Partly that’s because there are now new dealers in obvious places—Paris, Berlin, Monaco, Abu Dhabi— where Lotus was bewilderingly absent before.

Interview

Any car we launch in the next two years will be lighter and faster than its predecessor.”

Other housekeeping measures have been taken. “We didn’t even have a customer database.” Lotus’ global sales went up by more than 50 percent to 1,565 in April through December of 2014 (202 of which were in the U.S.) compared with the same period a year before. “And we will increase revenue because [on] these higher-performing cars the [transaction] prices will go up.” Gales has also cut costs. Many production jobs have been eliminated, and total head count has dropped from 1,215 to 930 even though output has risen.

Gales has many measures in mind to simplify production. A new “lightweight laboratory” in the engineering center contains every part from each of the company’s models. Nearly every Lotus employee has been through the lab, looked at every part, and made suggestions as to how it can be made lighter, simpler, cheaper, or better. The results have been spectacular. The Evora 400 will take 20 percent fewer hours to build and cost 10 percent less in its bill of materials, and it will be lighter and higher in quality.

“We will launch on time, too,” he says. “The Elise S Cup is the first Lotus ever that isn’t late. [The Evora 400] is also finished already. Early! This never happens here. Lotus didn’t even have a program management team before. Can you believe it?”

Gales arrived at Lotus HQ in May 2014 when it was almost mortally wounded. The company had lost $260 million in fiscal year 2013. The Malaysian management moved in a year later and cut the loss to $110 million. Gales says by the end of fiscal year 2015 the company will break even.

Much of this loss was due to investment in the failed V-8 Esprit supercar. In fiscal year 2013 R&D spending was greater than total revenue. Was there anything salvageable from that project? “Nothing,” he shrugs. He says the much-vaunted V-8 had never properly run. “Don’t invest £200 million ($305 million) in a new car when you haven’t exploited the current one.” Paul Horrell