Is a new $1.9 billion investment enough to make Lotus a rival to Ferrari and Porsche?

Geely’s plans for Lotus includes bringing the once-proud British sports car brand back to relevancy. But a new report from Automotive News Europe reveals that the Chinese auto giant now has bigger plans for its new acquisition, specifically increasing its stake in Lotus with a fresh $1.9 billion investment. If Geely’s plans come to fruition, it could up its stake in Lotus from 51 percent to a more significant ownership percentage. Doing so would cut into the shares of Malaysia’s Erika Automotive, which currently owns 49 percent of Lotus.

Geely Wants Lotus To Start Playing With The Big Boys
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Geely doesn’t want to just make Lotus relevant again, it wants the British automaker to become big enough that it turns into a legitimate competitor to Ferrari and Porsche

A lot of people already know about Geely’s plans for Lotus since acquiring a majority share in the automaker earlier this year. These plans may still be vague at the moment, but the Chinese auto giant’s intentions are clear: it wants to bring Lotus back from the brink of irrelevancy and return prestige to a company that hasn’t had it in a long time.

But even the most ambitious of speculations apparently got it wrong. Geely doesn’t want to just make Lotus relevant again, it wants the British automaker to become big enough that it turns into a legitimate competitor to Ferrari and Porsche. Talk about someone calling its own shot.

A report from Automotive News Europe laid out Geely’s plans that include adding production facilities and research centers in the U.K., including setting up a second factory and a new design and innovation center to complement the UK design studio it has already committed to building. Geely is also looking into expanding Lotus’ existing facility in Hethel, England. Part of that expansion includes hiring 200 engineers.

Geely Wants Lotus To Start Playing With The Big Boys
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Lotus is going to have to introduce new products that are going to capture the imaginations of fans and customers alike.

It’s unclear if the cost of that production expansion is included in the reported $1.9 billion investment or if its part of Geely’s push to increase its stake in Lotus, specifically using the extra funds it has to buy more shares from its Malaysian partner, Etika Automotive.

Regardless of how the investment is going to be divvied up, it’s clear that Geely isn’t just content with Lotus becoming relevant again. It wants the British sports car brand to become a “leading global luxury brand” that could emerge as a serious threat to the likes of Ferrari and Porsche. Only time will tell if Geely can do it, but it’s going to face a huge uphill climb if it even wants Lotus to be part of that conversation. Ferrari and Porsche are two of the most profitable automakers in the world, regardless of class or segment. For Lotus to reach those heights, it’s going to have to do more than add design studios and production facilities. It’s going to have to introduce new products that are going to capture the imaginations of fans and customers alike.

The ambition is certainly there, and you have to give Geely credit for that. But turning that ambition into reality is a far more difficult task than most people imagine it to be. Either way, it’s going to be interesting to see how Geely sets about doing it. The Chinese auto giant has been successful turning Volvo around. Who’s to say it can’t do the same with Lotus?

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Source: Automotive News Europe

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