Q: Can you give a technical overview of what the team has been up to during the winter and where are we on the creation of the CTO1?

Well, in short, we’ve been designing and building our new racing car! Throughout the off-season we’ve been focusing on a number of key elements of the development of this year’s car, including a lot of work on optimising the windtunnel. We have taken into consideration the changes in the technical regulations this year, most noticeably around the nose box and the push-off tests we had to pass.

Mike Gascoyne talks shop with team owner Tony Fernandes.

The rules around crash testing now mean that the cars have to be homologated before the first test, which meant bringing forward all the homologation tests by a month to six weeks before T1. From that point of view, we had a very successful development programme and we fully homologated the chassis before Christmas and, actually, I believe we were the first team to pass all the tests.

The design of the car has been progressing since early 2011. It’s the first year of real stability for us on the technical side, and by keeping the Renault Sport F1 engine and Red Bull Technology gearbox, we know exactly what we’re working with and what we can expect. Each year so far we’ve effectively not only had a new design team but also a new gearbox and engine combination.

Now, however, we have a very stable design team under our Technical Director Mark Smith, and this means we can take a much bigger step forward in terms of the detail of the design – and that really showed in the homologation process.

The car build has gone very smoothly. The car will be completely ready for the first test in Jerez on February 7th. In terms of aerodynamic development, we’ve continued our programme in Italy but have augmented that with a development programme in the Williams windtunnel, which has significantly increased our resources. All of that means I think we’ll be able to have a better and more competitive car, and we look forward to getting it out, testing it, and proving what the numbers are telling us.

Q: What are the big changes. What should the untrained eye be looking out for?

Aerodynamics is always the main focus of performance and improvement. Last year it was all about the blown diffuser, which we struggled with because not having it in 2010 meant we were always playing catch up throughout the 2011 season in comparison to other teams.

The fact it’s banned this year certainly plays to our advantage. Other teams had so much more development time, they were able to get much more out of it than we were ever able to, so that eliminates a little of the competition in terms of technical development. But really, aerodynamics is always one of the main features of development and that’s why we’ve put so much additional resource into it.

Q: And KERS?

Yes, it’s no secret that we’ll have KERS on the car this year. Towards the end of last year it really started to affect us racing with the midfield cars. It hurt us in qualifying and in our eventual race positions. At the last race in 2011, Heikki made a good start and gained a lot of positions but then lost out by not having KERS.

Having KERS embedded into our 2012 car is another good step forward for us. We had our best ever qualifying in relation to the cars ahead of us in Brazil, and with KERS we could have possibly out-qualified a few of them. So, again, we have another good reason to be very positive about 2012.

Q: What about this nose? It’s creating quite a lot of debate…

Yes, well the regulations have changed to limit the height of the nosebox to try to ensure that noses don’t get too high. Our challenge is that you always want to get the chassis as high as possible to allow clean air flow to the underside of the car, and what you see on the CT01 is our solution to that.

As we’re the first car out it is obviously stirring up a lot of debate, but because of the 2012 regulations I think you’ll probably be seeing this type of nose on most of the cars this year.

Q: What are your targets for 2012?

I think we need to see the car on track first and get feedback from the first tests. Until we run the car, we only have numbers and simulation data to work with. But every team wants to move up the grid and we’re no different. We finished 10th in the last two years, which has been our target, but now I think it’s time we moved forward again. Let’s see what happens we get out on track.

The team will post further images tomorrow, along with an interview with Mike Gascoyne on the car’s design and build process.

Since this is the first ever Caterham F1 car, the chassis has been named CT01 however this is actually the third car built since the team came into existence (as Team Lotus in 2010) and borrows heavily on the mechanical and aerodynamic progress made by last year’s 2011 T128 race car.

As expected, green and yellow remains the livery in use, whilst the CT01 will now be powered by a Renault engine. The standout feature (and this if far from being a compliment), is the new car’s ‘platypus’-style nose, which is expected to become commonplace this year due to new safety regulations concerning nose height.

The CT01 is due to make its on-track debut at the first official test session of the year at Spain’s Jerez circuit on February 7th-10th.

Caterham F1 will be updating their Facebook page tomorrow morning with all the details, plus that interview with Mike Gascoyne. Meanwhile you can read more about their 2012 car in an interview with Mark Smith, who talks about the chassis build and crash testing process.

My return to the West Midlands brought back clear memories; the early morning battle through London’s “rat-runs”; the oncoming crawl past the Hoover Building; the kites gliding over much of the M40; and then the wend through the Black Country conurbation. Nothing had changed.

The roadside pubs were still boarded-up, the vacant land was still over-grown and Dudley’s once bustling High Street now littered with fast-fix wrappers and wandering youths. This is a region that has lost the power of its voice. But whilst the mega factories and sprawling steelworks may have gone, look carefully along the side streets, and in the run-down business parks, and you’ll see the glimmer of the weld and taste the acidity of the smelt.

The Boys from the Black Country

I am met at the door by Julian Turner, a man who despite having led Westfield for five years now is still only in his mid thirties. We sit and reacquaint ourselves, sipping coffee and easing back into the familiarity that once was the norm. And we start at the beginning; not Westfields’ beginning, (they’ll be 30 next year), but with the acquisition of the company by Potenza (his family’s investment vehicle).

“With hindsight, had this been a good move?” I ask.

“Absolutely” came the reply, “and it still is. We had clear goals and good ideas, but then the world changed.”

The tone and honesty take me a little by surprise. I’d expected a barrage of bluster but instead was facing a man who was relaxed and candid.

So we talked about their (historic) wish to float Westfield stock on AIM (London’s Alternative Investment Market), a less regulated environment than the LSE (London Stock Exchange). Small companies often raise around £1m in equity capital by listing here and Potenza had initially hoped that by now, they would have recovered a sizeable chunk of their investment and seen Westfield growing due to a fresh influx of investment.

But the downturn has scuppered this and any thought of a listing is now just a distant memory. And this has caused them to “dig-deep”, for as anyone in this industry can tell you, the type of product that Potenza inherited from Westfield’s founder, Chris Smith, was incapable of sustaining a viable ongoing business.

When the Turners bought Westfield, there were three key products; the SE (the Seven-style car, generally sold in kit form), the XI, a beautiful replica of the Lotus Eleven and their own-designed XTR (standing for eXtreme Track & Road), a sports car that was much admired but that had been badly compromised by making it road-legal.

In 2006, the auto-industry was entering a period of change. Brussels was tightening the legislative framework on safety and emissions and it was clear to the new management team that Westfield either had to adapt or die.

“It became clear” said Turner “that our cars had to change; they needed a ground-up re-design . . . they needed to become technically excellent.”

And so the process of change began. The XI and XTR were put to one side and the team set-about creating the Sport Turbo, the first car of its type to receive ESSA (European Small Series Approval), a scheme that allows low volume manufacturers to homologate and register up to 1000 of a type of car each year.

“The effort, the challenges and the cost were all immense” Turner tells me “but we beat Caterham and we now have a really capable product for our dealers to sell”. Which one of these statements is the more important to him, only he knows – I’m sure it’s the latter, but it’s probably a pretty close thing.

Crossing Dartford

It had seemed inevitable that we would talk about Caterham, especially in light of Tony Fernandes’ acquisition earlier this year and the re-branding of Team Lotus to the Caterham name. There is clear envy of the loyalty and passion displayed by so many Caterham drivers but this is equalled by the pride shown when he talks about Westfield owners and their remarkable Club following.

“We’re like Marmite” he remarked, “you either love us or you don’t”. But this is where I hope he’s wrong.

Opinions will, of course, differ widely, but I see no reason why aficionados can’t admire both. We’re living in a new age; one where technology and the burden of regulation are overpowering traditional values. I think we should appreciate both marques for the freshness of their ideas and for helping to keep the British sports car industry alive.

A subtle shift of tone leads to a frank admission when I ask for his thoughts on how Caterham have taken themselves away from being a small kit provider to the new kings of cool.

“Whatever’s been said in the past” Turner says smiling, “you have to admire the way in which they’ve gone about building their brand. They clearly have some good people who’ve worked hard and have done a very good job.” He pauses for a moment. “And this is where we’re different” he continues.

“They’ve become marketing led whereas we’re very much engineering-based. We’re continually re-designing, re-developing and re-engineering our product; it’s what we do best”.

“I’d rather eat wasps”

If we were going to have a really frank exchange, I had to ask about the infamous review by Jason Plato on 5th Gear where he stated (in reference to the question of whether he would like to own a Sport Turbo) – “I’d rather eat wasps”.

Even when it’s warm and sunny, JP does not like Sevens. Give him a really badly prepared piece of **** on a cold, wet and windy day at Rockingham and.. well what had Turner expected?

I reminded him that this had always been an irritant to me and that Westfield hadn’t only let themselves down, they’d let their community down too. He agreed. Ironically, he tells me that the test was meant to be a comparison between the Sport Turbo and the new Caterham 175, however Caterham pulled-out just before filming. Westfield had been handed a golden bullet but instead of using it on their rival, they simply shot themselves in the foot.

West meets East

Moving on, I was keen to understand how the company is faring today. The good news is that despite the continued uncertainty within the Euro-zone, some 75% of Westfield’s business is now conducted overseas. However, Turner still recognises the value of their domestic kit business.

He is also astutely aware of the threat from the plethora of niche providers of similar “Seven-type” product.

“It’s ironic” he quips “that a business founded on the making of replica cars is now having its own designs and ideas copied”. One of Westfield’s strengths is the reputation it holds with its customers for the integrity of its work; “but make no mistakes”, he adds firmly, “as I said before, this is an engineering-led business; it always has been and it always will be, but this comes at a price and people looking to build a kit will always think of their budget first”.

This is the spirit that had first led me to their door. Neither of us were going to pretend that quality issues don’t sometimes arise, but the Westfield of today is far removed from when his family took ownership just five years ago.

In this short time, anyone will tell you how much the low-volume sports car market has changed. “Customers demand more and expect more” Turner tells me. It’s a simple statement of fact but one that has led to many within this industry failing as they struggle to meet the costs of transition.

But for all the optimism, Turner is aware that Britain’s use of its veto at the recent European summit could well cast a fresh shadow of doubt over trading relations with some of his key markets. Fortunately, he understands the value of Westfield’s local representation, such as the hugely charismatic Patrice Dumas in France.

Formerly Caterham’s road car agent, Dumas was said to have cried at the thought of leaving Caterham, but in 2008 he did and hasn’t looked back since. “We’re a family,” Turner tells me, “we know just how hard our agents work to generate sales and we have to be here to support them. We depend on each other.”

The Fernandes Effect

And what about the “Fernandes Effect”? Has the sudden global attention on Caterham and the Seven, proven to be a good or a bad thing for Westfield?

“Definitely good.” Turner enthuses. “We’ve been actively involved in building new markets in Asia and the Far East and the media interest that is now being given to the Seven is really helping people understand what this type of car is all about.”

But if I have one criticism of Westfield, it’s that their marketing, PR, web and social media presence do not do them justice. They are thin on budget and thin on people. If they’re going to take advantage of those beautiful green and gold F1 cars, showcasing Caterham to 600 million people worldwide, they need to deal with this and they need to do so quickly.

Pounds, Ringgits and Rupees

One of the key areas that Turner is keen to address whilst opening new markets is the delivery of value to Westfield customers. In light of recent agreements with DRB-HICOM in Malaysia and Incredible Cars in India, I ask if this means that Westfield will consider manufacturing at least some parts locally.

“Absolutely.” He tells me. “We’ll look to manufacture wherever it makes economic sense for us and for our clients”.

“And what about Kingswinford?” I ask him.

“The hope” he answers “is that we’ll slowly build operations here. It’s taking time but this is our home.”

The talk of the Malaysian deal brings me to another point. This was announced 18 months ago so I ask what has happened since. DRB-HICOM are one of the most significant corporations in Malaysia, with activities including the assembly of cars for the likes of Mercedes-Benz and Honda. Much is said to be riding on the tie-in, including new British jobs.

“Let me put it this way,” Turner tells me bluntly, “it’s taken longer than either of us thought but it’s been important that we both absolutely understand each other. We’ve now reached this point, and I’m told that there are now more Westfields in Malaysia than any other type of Seven . . .”

Power Points

One of the other promised outcomes of the Malaysian deal was that there would be a new generation of GTM sports car (another Potenza brand). I ask if this will happen or has GTM been consigned to history.

“It’s being updated and it’s being worked on.” He states clearly. “There is a new car but it will carry the Westfield badge . . . watch this space!”

And this leads us nicely onto that other area of Westfield specialisation, the development and application of alternative power technologies for lightweight sportscars.

Much has already been written about the iRacer, Westfield’s all-electric and somewhat futuristic race car. But whereas some manufacturers only “talk”, Westfield has been active in developing practical EV and hybrid solutions. Now, they are at the point where iRacers have been sold to customers and interest is getting stronger by the day.

I ask if this means that all-electric and hybrid options will soon be commonly available across Westfield’s range.

“Let’s put it this way” he says pointedly, “Paul (Faithfull, his brother-in-law and technical head of Potenza) has done a brilliant job in establishing us as market leaders in alternative power trains; so if someone wants an all electric car, we can build them one, but at the same time, if they want a 300bhp supercharged Duratec, we’ve engineered that as well.”

This may have been a somewhat mischievous reply (referring to Caterham’s overdue SP/300.R) but I can see that he is keen, very keen to re-emphasise their credentials.

As we sip more coffee and swap more stories, there’s still one fundamental point I want to raise.

“So tell me?” I ask. “If Ansar (Ali, CEO of Caterham Cars) or Tony picked up the phone and called you, what would you say? Because these are difficult times for everyone and if collaboration can save costs and create work, then surely these have got to be good outcomes for everyone?”

Turner smiled. “I’d say my door is always open.”

Workers at Westfield’s Kingswinford factory.

There is so much more that can be said about this small corner of British automotive heritage, but perhaps the most important part of my visit was the trip through the factory just before I left.

It had been two years since I’d last surveyed the cars in build, the chassis’ being prepared and the store of newly gel-coated grp. Nothing had changed, and for once this was a good thing. Every face that looked-up, smiled and said “hello” was a familiar one. Men and women will spend their working lives here. They know how to build cars.

Images: provided by Patrice Dumas, Westfield France. During the next few days, Patrice will hand over keys to the 51st FW 300 delivered in France since August 2009 – an achievement he and his team are rightly proud of.

If you live in mainland Europe, give Patrice a call or pay him a visit at montée d’Avignon, 13090 AIX-EN-PROVENCE.

The terms of the settlement are confidential but the deal sees the “LOTUS” brand reunited under the sole ownership of Group Lotus. This includes the rights to the “LOTUS” and “TEAM LOTUS” names in Formula 1 motor racing.

1MRT will race in the 2012 Formula 1 season under the name “CATERHAM F1 TEAM” and will use a “CATERHAM” chassis.

The deal also sees a working relationship established between the parties and they will work together on future projects in the automotive field.

Group Lotus Chief Executive Officer Dany Bahar: “On behalf of Group Lotus and Proton I would like to express how pleased we are that this matter is finally closed and we can now focus on looking forward to the future.

“We understand that this has been a very difficult and confusing time for the fans of the sport and the Lotus brand so we are glad to have reached a clear resolution on this important matter – I would like to take this opportunity to thank our fans for their continued support, it means everything to us.”

Riad Asmat, Group CEO: “We are proud of what we have achieved by bringing the Team Lotus name back to Formula One when many tried and although we are sad to say goodbye to Team Lotus we are excited about owning our own future and being in control of our own destiny. Now we have no one to be compared to. We make our own history and we will remain green and yellow.

“Now we look forward to an exciting future racing under our new team name of Caterham F1 Team. Please continue to support our very special spirit of never say die and support us on the track as we move up the field and demonstrate that the good do win.”

The company chose to announce its new venture at this weekend’s inaugural Indian Grand Prix, coinciding with the moment when the world’s press is focusing on the region. That’s the Fernandes way, ever the markeeter.

The Caterham brand is being introduced to India with backing from brothers Gaurav and Mohit Burman, who will chair the Indian operation. The Burman family lead the Dabur Group, a major Indian consumer healthcare and food products company and the brothers, both of whom have keen sporting interests, relish the plans for racing and trackday activities that the Caterham India team will introduce and realise.

Operations will be led by British sportscar racer, Matt Cummings who is an experienced automotive and motorsport operator in the sector.

“I am looking forward to introducing the exhilarating driving experience of a Seven, both on the road and on the circuit, to the Indian enthusiast,” says Cummings. “One of the most exciting phases of our operation will be a fully Indian-assembled Seven, making Caterham the only road, race and track car assembled in India.”

Meanwhile, Caterham’s renowned CDX driving experience and grassroots motorsport series, the Caterham Academy, will begin operating in India from next year.

Caterham have been active in East Asian market for a few years now, already having a presence in Japan and Singapore. In fact, whenever I think of Caterham in this part of the world, I remember this video created by Caterham Cars Japan of a Superlight R300 tackling Tokyo’s Route 246. I’m not quite sure how this would play out in Mumbai, dodging around Tuk-Tuks und Mopeds.

Caterham Cars chief executive, Ansar Ali, said: “We have been working for some time on establishing Caterham in India and we’re arriving in yet another new market for our brand at exactly the right time – just as the brand new Indian GP signals the arrival of Indian motorsport on the world stage.

“The potential of the Indian market for the Caterham brand is enormous so we are delighted to have knowledgeable and influential partners by our side for the journey ahead.”

Caterham Cars India will be focused on establishing the brand in anticipation of new products currently in development by Caterham Technology and Innovation (CTI), the engineering division recently created following the acquisition of Caterham Cars by Tony Fernandes.

CTI will be responsible for the development of a completely new line of accessible and affordable sportscars inspired by the lightweight, minimalist philosophy of the Seven and drawing on the advanced technologies and materials from the Group’s Team Lotus Formula One operations.

With this in mind, Caterham Cars India has also already ordered a demonstrator version of the Company’s new-for-2011 SP/300.R sports prototype racing car, with a view to expanding the product offering further to the Indian market.

The announcement of Caterham Cars India follows the launch of the brand in China in July and is the second new market for the Company since its change of ownership back in April. Team Lotus reserve driver, Karun Chandhok, is one of India’s top motorsport sportsmen.

Ginetta, unlike rivals such as Lotus, Ariel or Caterham, have not produced a road car since the 1990′s, hence the importance of two new road based offerings, spurred on by current owner Laurence Tomlinson of LNT Automotive . Indeed, the success of the little G40 R, and its sibling, the G60 911-rival, could make-or-break the West-Yorkshire based sports car manufacturer.

Should it fail, Ginetta may end up next to TVR in the automotive cemetery with ‘Gone but not Forgotten’ written across its headstone. But for now, there’s everything to play for.

Certainly, with Laurence Tomlinson at the helm, they have an asset highly regarded in the industry, and a man who strikes me as a modern day Colin Chapman. With years of racing experience, Le Mans wins and a keen understanding of both business and engineering, Tomlinson and Ginetta have every chance of making it work, even in such a competitive market.

At Silverstone circuit in Northamptonshire we drove the ‘baby’ G40 R, which features lightweight engineering, a Mazda sourced engine and gearbox, a front engine rear-wheel drive layout and very little in terms of driver aids. A pretty car, low slung and dainty in its proportions, whilst still looking muscular, this car looks every inch the race car turned road car that it is.

The 2.0-litre Ginetta G40 R at Silverstone circuit.

Interestingly, this is what sets it apart from its rivals, in that the G40 is a race car adapted for the road by putting in a proper manual gearbox (the race car itself uses a sequential ‘box), road biased seats and seat belts, some headlights and a number plate. If you are looking for a racing experience on the road, it’s difficult to think of anything else that blurs the lines more strongly than the G40.

With a 175 bhp 2.0-litre MZR engine propelling a kerb weight of just 795 kg, the performance of the G40 sits somewhere between a Lotus Elise and an Exige, with the 0-60 sprint taking 6 seconds and with a top speed approaching 140 mph. If you are bridging the gap between the Elise and Exige, the numbers make sense and it feels suitably quicker than an Elise S in a straight line.

On the track

Out on track, the car feels lively, and will make you work to get the best out of it. Its unassisted, slightly un-communicative steering at low speeds comes alive and offers useful feedback as you begin to make more flowing progress. Without brake servos, the rock solid brake pedal takes some getting used to, and it can be very easy to lock the rear wheels and end up provoking ‘polite pirouetting’ if you are not used to this kind of race-derived braking. Properly managed however, the brakes offer excellent retardation and resist fade out on the circuit.

The G40 R’s handling balance is good, but the chassis is less forgiving than a Caterham Seven or Lotus Elise in terms of gradual breakaway of grip. Turn-in oversteer can be difficult to correct if you are not quick enough or in tune enough with the G40’s un-assisted steering, however once your brain catches up, you realise truly rapid progress can be made on track, using the excellent grip and precision provided by the combination of its soft-compound road tires and a well balanced chassis.

Should you consider buying one?

With the ex-Farbio based G60 sports car was being rolled away (with a minor electrical malfunction that prevented us from getting behind the wheel), responsibility fell on the G40 R to impress and prove that Ginetta has what it takes to produce as good a road car as it already does with racing cars.

Ginetta G60, the £68,000 911-rival based on the Farbio GTS. Ginetta acquired Farbio in March 2010 with its founder, Chris Marsh, continuing the sportscar’s development under the Ginetta name.

Whilst we feel that improvements could be made to the interior trim quality and some of the exterior paneling, the car we drove was a pre-production model and we’ve been promised these will be sorted before customer deliveries commence.

If that’s the case, then Ginetta have produced a balanced, race-honed road and track car that, although only produced in small numbers, we expect to give established cars from Lotus and Caterham a run for their money. In fact, we’d go so far in saying if you’re looking for a fixed roof sportscar ably suited to the inclement weather here in the UK, then the G40 R has few rivals.

Certainly, the driver appeal is there, and if Ginetta continue to dial in their race derived understanding of dynamics into all future road cars, we expect Ginetta to become a serious contender as a producer of lightweight track cars for the road.

The G40 R will cost just £29,950 when deliveries commence in 2012, which makes it something of a bargain compared to the £68,000 G60 sportscar. The company has set itself the modest target of 100 cars, all of which will be supplied to UK customers.

The programme will be owned by a new standalone engineering business, Caterham Technology and Innovation Limited (CTI), which will be responsible for the development of a completely new line of accessible and affordable sportscars. Inspired by the lightweight, minimalist philosophy of the Seven and drawing on the advanced technologies and materials from the Group’s Team Lotus Formula One and Caterham Team AirAsia GP2 motorsport operations, CTI will also undertake advanced projects for external companies operating within the automotive and aerospace sectors.

“The new shareholders are committed to investing in an exciting range of global products over the next 10 years,” says Mark Edwards, CTI’s Chief Executive. “Tony Fernandes has been very clear from the start that Caterham needed a sustainable research and development business model in order to meet the plans the management have for the road car business.

“By establishing unique operating principles for CTI, we have managed to attract a world-class team of niche vehicle engineers eager to build on the ethos of Caterham and the DNA of the Seven.”

Among the first in a series of respected industry figures to join the new operation will be Tony Shute. Joining as Head of Road Cars for the new business and, as an avid motorsport competitor in his own right, Shute is credited with bringing the ground-breaking Series 1 Lotus Elise to market.

“When the opportunity to be involved with creating the next iconic Caterham arose, I couldn’t turn it down,” says Shute. “The core principles and ambitions of CTI have enabled us to attract some of the brightest and most respected talents in their fields.”

Further announcements will be made in due course.

The new business will focus on unique vehicle architectures, high performance engines, advanced materials and manufacturing technologies in association with the Formula One and GP2 race teams.

He adds: “I feel very confident that our customers will be very pleased with the products I have challenged CTI to deliver, in addition to supporting the Seven and I look forward to revealing our plans in more detail soon.”

Caterham has announced that its new CTI operation will be based in Norfolk near the Group’s motorsport operations, and within spitting distance of Lotus Car’s headquarters in Hethel.

Knowing how sensitive the information could be, the first thing I did was speak to Caterham’s CEO, Ansar Ali to understand the impact of the changes and to ensure that whatever we published would not undermine the swift conclusion of any negotiations.

You see in the game of chess that’s been playing between Fernandes and Group Lotus, the winning move was always perceived to be control of the Lotus brand, of which Team Lotus is just a part (implicitly if not legally). Good chess strategy suggests that your King’s safety is crucial, so Group Lotus focused on protecting their good name and keeping it out of Fernandes’ hands.

Despite Fernandes’ audacious moves with Team Lotus, Dany Bahar – Group Lotus CEO – knew he could play the long-game and win the battle as long as he reinforced his strongholds and raised the profile of his brand (hence the high-profile PR announcements we’ve been seeing). So, as of January 2011 the game was approaching stalemate (if not checkmate) and the acrimony between each side was settling in for the long-run.

So, I hear you asking – what’s changed?

Tony Shute joins Caterham

Tony Shute who until recently was Head of Product at Lotus Cars; responsible for engineering the Evora, Exige and Elise and a 20-year veteran of the company, resigned from Lotus and joined Caterham a few months ago. Shute has been joined at Caterham by several other Lotus employees and is now hard at work on Caterham’s next generation of road cars.

Ansar was keen to point out that Caterham did not poach Tony or any other personnel from Lotus, they made this choice themselves, but clearly Caterham will now benefit from the infusion of Tony’s knowledge and experience in developing a more mainstream road car.

Tony Shute, ex-Head of Product at Lotus Cars, who has now joined Caterham.

Proton sanctions the sale of the Elise and Exige platforms to Caterham?

We were originally led to believe that a deal had been done to sell the Exige and Elise platforms to Caterham, but I now understand this to be untrue – perhaps because Caterham have acquired a team with first-hand experience of developing these models. Proton still appear to be keen on selling the S1 Elise Platform, but interestingly, not the S2 (as demonstrated by the new Exige S and Exige R-GT launched in Frankfurt this week).

Nevertheless its quite telling, since the source of this information was a Kuala Lumpur based insider. Clearly Lotus’ Malaysian owners have become tired of the public spat with Fernandes and would like to see Lotus focus on achieving their 5-year plan – and help pay back the $270M syndicated loan borrowed in April to finance the development of Lotus’ new models and subsequent restructuring costs.

Proton have recently taken a beating on the Bursa Malaysia (previously known as Kuala Lumpur Stock Exchange), plunging to a 2-year low after concerns over its latest earnings results. The national car maker posted a 94.6% year-on-year drop in net profit to RM4.55mil for its first quarter ended June 30, 2011, compared with a net profit of RM84.68mil a year earlier, which was attributed to higher expenses incurred by Lotus Group International Ltd.

In turn the Malaysian group has been criticised for its “costly foray into the sports car market”, with Analysts arguing that Proton should instead invest in improving its product offerings, in particular its core models, or focus its efforts in collaborating with a strategic partner.

It’s worth noting that in the 10 years under Proton ownership, Lotus has yet to become profitable and continues to require significant investment from Proton – this has become even less palatable during the global economic downturn, since Proton’s major shareholders comprise government-linked companies (Khazanah Nasional Bhd, the Employees Provident Fund and Petroliam Nasional Bhd). Up to 50% of the total group capital expenditure (capex) for the next 12 months has been allocated to Lotus, with the remaining 50% going to Proton, so you can see why the market is taking news of Proton’s latest results so badly.

Team Lotus becomes Caterham Team Air Asia in F1

You will no doubt have already heard the rumour that Tony Fernandes is to relinquish the Team Lotus name and rebrand his team as Caterham Team Air Asia for the 2012 F1 season. Caterham will remain liveried in Green & Yellow whilst Lotus will be coloured in whatever design Swizz Beatz can dream-up, or perhaps just remain Black & Gold.

Caterham Team Air Asia will move to Northants (taking over the old Super Aguri factory), leaving Hingham available for Caterham Cars and some F1 fabrication, and of course, modestly close enough to Lotus HQ in Hethel.

This is the win-win Fernandes has long been talking about and has paved the way for a resolution with Group Lotus.

However, given the pressure upon Proton (and therefore Group Lotus) we understand Lotus’ investment plans are being trimmed back to the essentials, hence the Lotus Renault F1 team will now become a Renault sponsored by Lotus, rather than a Lotus powered by Renault – although of course the powerplant will remain Renault.

We also understand Lotus’ product development plans will be trimmed back, so that the Evora becomes the entry-level model (i.e. the Elise will not be replaced), with emphasis being placed on selling premium models with the highest net margins. Proton apparently don’t want cross-over product (and sparring) between Lotus and Caterham, as this (quite obviously) wastes money and opens them up to further criticism by the analysts.

So what does this mean for Caterham?

You’d have to admit that Caterham are sitting very pretty amidst all these moves. Ansar has long been trying to acquire blueprints for the Series 1 Elise from Lotus, but with Tony Shute on board he perhaps doesn’t need them any more (although they would certainly save a lot of money in homologating a future Caterham for the US markets).

Ansar Ali, CEO of Caterham Cars.

Product wise, in addition to the Caterham 7 (which will live on) there is the SP/300.R, which seems to have experienced delays but should begin customer testing soon. The SP/300.R is due to participate on the F3/GT package but Caterham will need full grids – however Ansar sees it as providing a staircase for talent to migrate up from the numerous Caterham 7 series, both here in the UK and internationally.

So that leaves the way clear for Caterham to build a new range of affordable sports cars, filling the space left by the Elise and Exige, and designed from the outset to become a global product.

Ansar tells me that since news of Caterham’s acquisition he has been inundated with new opportunities, mostly it has to be said from overseas. That’s the other big change you’ll see from Caterham. Even before the sale to TLE, Caterham were selling more than half their cars outside the UK, and this will increase in future especially with access to Air Asia’s logistics and distribution network.

Fernandes has already said that he’d like to see Caterham cars being sold wherever his airlines fly to, which makes North America and APAC countries a no-brainer, and with a population of more than 4 billion people I could already sense that Ansar was wondering if he’d bitten off more than he could chew. But Fernandes is a pragmatic businessman and just as he’s done with his F1 racing team, he’ll be keen to see Caterham grow organically and sustainably.

There’s clearly much to do, Caterham are not yet geared up to operate as a global business, so Ansar will need to build new sales and distribution processes, new systems, establish a more outwardly-facing culture and learn how to scale Caterham’s DNA without diluting its very essence.

So the journey for Caterham has just begun, but there’s plenty for enthusiasts and British industry to feel optimistic about. Having long been a minnow of the car industry, the boys from Dartford just got teeth. I for one, can’t wait to see what happens next.

So what has all this got to do with cars? Well simply, a very real-life version of “the Den” appears to be being playing-out at Loftus Road, home of Queens Park Rangers, with Tony Fernandes right in the heart of the action.

Anyone who has followed the fortunes of this proud club will be aware that they’ve had their fair share of turmoil in recent years, both in terms of ownership and team management. When Flavio Briatore and Bernie Ecclestone took control in 2007, joined soon after by Lakshmi Mittal, Hoops fans could have been forgiven for thinking that they’d soon be challenging neighbours Chelsea for both domestic and European honours.

However, despite gaining promotion to the Premier League for this season, little has been done to strengthen the squad or improve the grounds. As the situation currently stands, QPR are up for sale and Tony Fernandes is the man on the spot who has made it quite clear that he is their “deliverer”.

I like Fernandes; and apart from the fact that he professes to be a life-long West Ham fan, I can’t really fault him! Well actually I can because I don’t believe that he’s taking the most professional and responsible approach to the feud with Dany Bahar and Group Lotus. That aside, what concerns me is that taking on a Premier League football club is going to be a whole different ball game to the type of operation that both he and his Tune Group are used to. Ironically, only a few months ago in an attack on rivals Singapore Airlines, he famously quipped that “businesses should stick to what they know best…”

Of course, I’m sure that he has already lined-up a capable team of co-investors but the combined demands of long-term funding and board room activity are sure to take their toll. Moreover, his core business, Air Asia, is continuing to grow rapidly and indeed, he’s also in the midst of taking a significant stake in MAS (Malaysian Airlines); oh, and he’s soon to take the lead role in the Asian version of The Apprentice!

My point is therefore simple. Can Tony Fernandes add QPR to his portfolio without compromising the effort required to generate the improvements needed at Team Lotus? I don’t think that Caterham need worry quite so much as their demands are based more around funding and introductions to new markets. Both of these are relatively easy for Tune to provide, especially in collaboration with other partners.

Caterham are unlikely to be affected by Fernandes focusing on QPR, but Team Lotus are far more vulnerable. Will the affable dealmaker have time for all his business interests?

Team Lotus, however, are far more vulnerable. They’ve already had to concede that for this year at least, they won’t meet their stated aim of challenging Toro Rosso, Force India, Sauber and Williams for midfield honours. Now they have to contend with fellow tail-enders Marussia, set to make strong improvements following their tie-in with McLaren and Williams, who will apply a raft of measures to halt their own decline.

To date, Mike Gascoyne has done a credible job in the effort to re-establish Team Lotus and Tune have fared even better with visibly sharp and incisive marketing. So whilst results on track have been frustrating, off-track efforts have been superb, culminating in global giant GE (formerly General Electric) coming on-board as a premium partner. The GE deal will undoubtedly create a platform for Fernandes to expand his operations into the highly lucrative North American market and the value to his “group” cannot be understated.

So why risk any of this for a serious venture into football club ownership? Especially when there is an immediate conflict as Tune are already contracted sponsors of match officials for both the Premier League and Football League.

Perhaps only time will tell but QPR are a club with issues and this adds to my concern: For a start, they are seriously under-resourced as far as the depth of their squad is concerned. This is going to take hard cash for transfer fees and hard cash for the wage bill. Next, the ground capacity has to be addressed. Loftus Road is the smallest stadium in the Premier League, holding less than 20,000 people, and with little scope for improvement, it would appear that the only realistic option is to find a new home. Again, the potential cost here, both in terms of management time and funding is significant.

So again, I have to ask “why”? Admittedly, Premier League status has a lot to be said for it! QPR’s promotion will guarantee £40m, even if they finish bottom and an extra £750k for each place above this. They’ll also sell a lot more merchandise and corporate hospitality sales will rocket – but to really benefit, they need to stay in the top-flight and this is going to be the struggle.

Maybe I just don’t “get it” but as far as I can see, it’s like a young family having a new baby. It’s easy to unintentionally overlook the older siblings as all the attention (time and money) goes onto the infant and their needs.

Be careful Tony.

However, if you were expecting this decision to diffuse the confusion of having two Lotus teams in Formula 1, then think again. Team Lotus are the only team entitled to use the Lotus name on their chassis, but Group Lotus are entitled to continue racing in F1 using the historic black and gold livery and use the Lotus marque on their road cars.

A spokesperson for Group Lotus, Sarah Price, Head of Legal, said shortly after the judgement, “Group Lotus is pleased that its right to race under the Lotus name in F1 has been upheld and that the Defendants’ attempts to stop that have failed.” So it looks like there remain two interpretations of the truth… However the judge ruled that Group Lotus cannot enter F1 using the name ‘Lotus’ for a team, which it will now appeal against since it believes this causes confusion for spectators and customers.

No doubt Group Lotus will characterise this as a threat to the long-term viability its road car business and therefore try and use political leverage to stop Team Lotus from undermining this business on the world stage that is Formula One. But an appeal court judge might just say, they should have thought of that in the first place before terminating their relationship with Fernandes and 1Malaysia Racing in 2010…

Here’s the statement in full from Team Lotus…

Team Lotus is very happy that the court case concerning the rights to the Team Lotus name has today come to a positive conclusion and that the team can now focus its full attention on its long-term challenge for honours on and off track. The decision confirms that Team Lotus is the true owner of the full Team Lotus name and the iconic roundel, establishing in law that the Anglo-Malaysian team is the rightful heir to Team Lotus and all associated goodwill.

Team Principal Tony Fernandes gave his comments on behalf of his fellow shareholders Kamarudin Meranun, SM Nasarudin and the 250 strong workforce based in Malaysia and Hingham, UK:

“We are all pleased that it has been clarified that we are the rightful owners of Team Lotus. We have always been confident that the factual evidence we presented would lead to this decision and today’s judgment confirms that belief. We are of course disappointed about the decision that Group Lotus was entitled to end the our licence agreement in 2010.

We entered into that contract on the basis that we were beginning a long-term partnership with Group Lotus but unfortunately they then used technical breaches of the merchandising pre-notification process to bring the licence and our partnership to an end. However, my fellow shareholders and I are firm believers that when one door closes another door opens. In the early days of our agreement we realised its termination was inevitable and as events have unfolded the end of the licence has proved positive for us, with many new avenues being opened up as a result.

“We wanted to develop a long-term relationship with Group Lotus and help them sell more cars around the world but that door closed and now we are delighted that we can turn our attention to ensuring success for Caterham Cars on the road and Team Lotus on track. These are two very exciting brands and their future development, bringing these two iconic brands together under the Caterham Team Lotus umbrella, will see us introduce new Caterham cars and a range of new Team Lotus brands into the global marketplace.

Now our main aim is to build on the solid foundations that has made Caterham Cars the model for how to run a profitable contemporary car company and add more history to the incredible story of Team Lotus over the coming months and years and with the people, spirit, passion and determination we have in both businesses we know that marks the next stage in our incredible story.”

…and this is what Group Lotus had to say

Group Lotus Wins On Key Issues In Formula 1 Naming Dispute

Mr Justice Peter Smith today gave his judgement in the dispute between Group Lotus plc and Team Lotus, Tony Fernandes and others in respect of the right to use the name “Lotus” in Formula 1.

Judgement Summary

• Group Lotus has the right to use the name “Lotus” on its own within Formula 1
• Group Lotus entitled to race in the historic black and gold livery
• 1Malaysia Racing Team (1MRT) ruled to be in breach of licence agreement, Group Lotus awarded damages
• Team Lotus Ventures Limited trademarks revoked for non-use
• Group Lotus trade marks unaffected
• Group Lotus has the right to use the Lotus marque on cars for road use

The Judge found that:

Group Lotus has goodwill associated with the name “Lotus” in Formula 1 and is free to compete in the sport under that name using the Lotus roundel;

Group Lotus is entitled to race in F1 using the historic black and gold livery;

1MRT is in breach of the Licence granted to them by Group Lotus to race in F1 under the name Lotus Racing and has awarded Group Lotus damages in respect of that breach;

Team Lotus Ventures Limited’s trade mark registrations in the name of Team Lotus are cancelled as a result of non-use;

Group Lotus trade mark registrations are unaffected; and

Group Lotus has the right to use the Lotus marque on cars for road use.

The Judge also found that Team Lotus has the right to continue to race in Formula 1 under the name Team Lotus but the effect of the Judgment is that only Group Lotus can use the name “Lotus” on its own in F1. Group Lotus is concerned that this aspect of the Judgment will cause confusion in the eyes of spectators and the wider public. Accordingly, Group Lotus is seeking leave to appeal so that the right to use the Lotus brand in Formula 1 is clarified once and for all in the interests of the sport and the fans. Group Lotus and its shareholder Proton Holding Bhd are confident of success on appeal.

Speaking after the judgement, Sarah Price, Head of Legal, Group Lotus plc said: “Group Lotus is pleased that its right to race under the Lotus name in F1 has been upheld and that the Defendants’ attempts to stop that have failed.

“The on-going dispute with Team Lotus and associated companies has been a cause for concern for all at Group Lotus. Despite the detailed judgment there are issues which still require clarification and we remain committed to obtaining this much needed clarity for the many fans of the Lotus marque – we are extremely grateful for their continued support. The decision to appeal has not been taken lightly.”