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Lotus fails to secure Government investment

Norfolk-based maker denied regional growth fund cash to help build factory for new models like reborn Esprit

Lotus Esprit

By Christofer Lloyd

14th April 2011

The new Lotus Esprit could be built overseas, after it was revealed that the sports car maker has been declined investment from the Government’s £1.4 billion strong Regional Growth Fund (RGF).

In January, Lotus applied for a £27.5 million loan to build a new production plant at its base in Hethel, Norfolk, which would have created 1200 jobs. The money was requested to help Lotus build its new range of models, which were revealed at last September's Paris Motor Show and include a new Esprit and Elan.

However, this round one application was rejected by the Department for Business, Innovation and Skills (BIS), despite £450 million of funding being allocated to Jaguar Land Rover, Bentley, GM and other companies.

However, Lotus is not giving up the fight. “Following this decision Group Lotus is currently exploring all available options including the possibility of submitting an updated bid for round two of the RGF, which is set to close on July 1”, the company said in a statement.

Without any funding in subsequent rounds of the RGF Lotus may be forced to move some production to Magna Steyr in Austria – where Aston Martin builds the Rapide – or Finnish company Valmet – where Porsche builds the Boxster.

Ultimately however, whether Lotus receives any funding from the RGF or not, its Hethel base is set to remain its R&D and engineering headquarters.

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7 Comments

This Government is sooo

SAD, they just can not see the wood for the trees.
We send "AID" to anyone who puts out their hand, give benefits to EEC members who work here for a year, and then go home and STILL get the Benefit paid after they have left the UK!!!!!!!!!!!!!!!.
A government gone MAD.
Now they want everyone in an "Electric Box" but will NOT support a company obliging.

HELP.

By johnbmwx6 on 19 April, 2011, 9:09am

Time lost

So round one is already lost, and at least a couple of months in time as well. Really too bad!
Let's hope it won't get worse.

By xedor2003 on 19 April, 2011, 9:39am

This Government makes you mad!

So Dumb, Dumber & the Weasel (aka Cameron, Clegg & Osbourne) can keep bombing the crap out of Libya, but can't support a great UK sports car manufacturer to the tune of 5 days worth of bombs! CRIMINAL! Don't they keep saying the private sector has to create the jobs?

By steve2557 on 19 April, 2011, 10:11am

Good luck with round 2

I suspect they will get it on appeal. We don't know what was in the bid, normally companies go in high with lots of extras thrown in, then try a more modest approach later. This project sure needs to happen. Everyone knows that - even the government.

By craiglife on 19 April, 2011, 11:16am

all goverments are the same

Tory and Labour before both dont give a damn about the motor industry,but enjoy taxing it.Rovers demise was due to labour not wanting to invest a little money in the company to keep 1000s employed,claiming it would be a bad thing to turn Rover into a state owned company,yet bailing out ridiculous banks like northern rock is ok.What Lotus is asking for is a drop in the ocean and in return for 1200 jobs.Nissan got a massive injection to create the leaf at sunderland,although Nissan are massive compared to Lotus and are not needy.I guess lotus are not big enough for this goverment to take notice of,so there goes production abroad followed by everything else.

By nickbsmooth on 19 April, 2011, 5:21pm

But...

Certainly governments waste taxpayers' money in bucket loads, but why should we give aid to car industries making very specialised cars for rich people - and I include the others here? Just cut tax and allow them to borrow money from commercial lenders. Butt out government. If the project is viable the banks will lend.

Rover went bust because it was sold for a pittance to asset strippers, and it made rubbish cars. For years the taxpayer had thrown good money after bad on BL, BMC, or whatever it's acronym of the week was. That's the true lesson here.

By Alexan14 on 26 April, 2011, 10:04am

Silly government

if we reduce our car import by just half our economy would be boosted out of stagnation.... more cash for us all...
That car looks stunning we need the quality skilled jobs ...why give them all to germany?

By liverpool on 23 June, 2011, 8:04pm

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