Profit margins is the simple answer.

 

Everywhere I go I keep hearing "there's a future for MG sportscars", "15000 sales a year will do". Most of these suggestions are followed by "the sportscars can be build the Lotus way".

So if MG could survive making just 15 000 sportscars a year using the Lotus method, then why can't Rovers be built the same way? Surely you could sell more than 15 000 Rover's a year. I'd buy one!

So far only Triple A seem to be aware of this, but why isn't anyone else?

Well its not just higher production levels that can't be done this way, and you'd still have to justify it with high prices.

There is a market for MG sports cars obviously. I believe there's a market for all manner of MG's, and if promoted the right way, all sorts of Rovers, but I don't believe MG would survive producing 15000 cars pa.

There may be people who say that 15000 MG sports cars pa is good enough, but are they right, or just wishful thinking?

It depends on the sports cars IP and who owns the company for starters. Don't forget that Lotus doesn't sell as many as 15,000 cars and is owned and funded by Proton, not exactly at a profit, but partly to develop engineering and performance for Proton. Lotus also does consultative work. Is there room for another Lotus sports car? Can MG command the same price tag? Is there room for another automotive consultancy?

What engines would this MG use? Lotus don't have use own engines (excluding proton Campro engines)...

Anyway, has it occurred to you that maybe Triple A are not very credible?

 

My understanding is that Lotus's method works fine for limited production, but cannot be ramped up.

It's a bit like these kit car manufacturers. They can knock out 50-100 cars a year, no problem at all. Ask them to build 25,000 a year and they simply could not do it.

Low volume cars are designed to fill a specific neiche and they are priced to reflect that: a Lotus Elise costs £25000-ish. For that you get a spartan sportscar. The only positive points about a Lotus Elise are its pheonominal road holding and its performance. Nothing else. You don't buy an Elise to take the family on holiday, or because you like the comfort and luxury, or because of its impressive Euro N/CAP ratings...

You can do this on a small production scale. Lotus are planning to sell around 3000 Elises this year. Mainstream cars are full of compromises in order to hit as big a target market as they can. You need good handling, but you need comfort as well. You want performance, but you need economy. You need a drivers car, but you need something that will take four passengers, the family dog and luggage as well. You need something that is entertaining to drive around twisty country lanes, but you want to be able to waft 200 miles on the motorway in comfort. You want something that is exciting to drive, but you need a car that will score top marks in Euro N/CAP crash tests.

You simply can't do this using a small-car production model. Yes, there are things that a major company could learn from Lotus, but that doesn't make it the perfect approach for MG-Rover.

A better approach would be to learn from FIAT. They have designed a modular system that is being rolled out to all their cars. It gives them the ability to develop mainstream production cars quickly and relatively cheaply. How else do you think a company as cash-strapped as FIAT have been able to launch so many models in the past 18 months?

 

Anyway, has it occurred to you that maybe Triple A are not very credible?

If they aren't genuine why hasn't Martin Leach said anything about them? Why haven't PwC denied recieving a deposit or even a bid from them? I'll give them the benefit of the doubt...

 

I suppose what most people mean by ‘the Lotus proposition’ is low volume sportscar production on ally/composite platforms with GRP bodywork. I can’t see anyone managing to sell 15,00 units pa. based on this technique cos it's just not cost effective..

But what is exciting is Lotus developed VersatileVariable Architecture, designed to exploit the benefits of production at medium volumes, (medium is 50,000 units pa.) for niche markets which are generally quite profitable. Coupes, MPVs, 4x4s, etc.

The idea is based on using modular elements of the vehicle structure, platform, systems, etc. across a family of niche variants, with a combined production of say 50,000 units pa. to avoid the horrendous costs of engineering traditional, less adaptable platforms.

There are structural components common to all family members but arranged differently for each variant around corner nodes which support drivetrain/suspension components, (ideal for hybrids), allowing you to make front and/or mid-engine layouts,or front and rear-wheel drive platforms, and two, five- or six seaters, from the same set of bits. Which you can't do with current platform sharing. ie. Golf, Seat, Audis & Skodas all on the same platform, but all the same size, & all front wheel drive.

It's exactly what someone like MGR should be doing, maybe if they'd got Matra it would've happened.

 

If they aren't genuine why hasn't Martin Leach said anything about them? Why haven't PwC denied recieving a deposit or even a bid from them? I'll give them the benefit of the doubt...

Because they haven't commented on any bid nor can they under the confidentiality agreements in place, Ask yourself why Triple A amd OITC and the trucker chap went public when the others haven't: because they are not amongst the 9 serious contenders.

 

Everywhere I go I keep hearing "there's a future for MG sportscars", "15000 sales a year will do". Most of these suggestions are followed by "the sportscars can be build the Lotus way".

So if MG could survive making just 15 000 sportscars a year using the Lotus method, then why can't Rovers be built the same way? Surely you could sell more than 15 000 Rover's a year. I'd buy one!

So far only Triple A seem to be aware of this, but why isn't anyone else?

It's a lovely idea and during the eighties there was lots of talk of being able to run small batches of say 50K cars using 'soft tooling' that would be profitable. But it clearly wasn't a possibility Alfa were keen on it.

The reality is that nobody can survive beyond the TVR level without a big company being involved. Even Morgan now use BMw help extensively. It would need very deep pockets to start production of c15000 Rovers a year and they would have to be priced at the 40K mark to return investment and the possibility of new models.

Do the sums and you can see the problem.

 

Lotus.beeen there, done that, and had the garage bills to prove it.

People don't say that it stands for 'Lots Of Trouble, Usually Serious' for nothing.

Also Lotus earn a lot from consulancy work, not a field that MGR were very active in.

 

Nobody's saying 'build the Lotus way' - they're saying use the Variable Vehicle Architecture they developed. This, and the space-frame are viewed by vehicle analysts as core technologies that could allow medium scale production to be profitable, and develop a variety of model varients on which would be suitable for a company looking to survive on niche products like MGR.

 

I suppose what most people mean by ‘the Lotus proposition’ is low volume sportscar production on ally/composite platforms with GRP bodywork. I can’t see anyone managing to sell 15,00 units pa. based on this technique cos it's just not cost effective..

But what is exciting is Lotus developed VersatileVariable Architecture, designed to exploit the benefits of production at medium volumes, (medium is 50,000 units pa.) for niche markets which are generally quite profitable. Coupes, MPVs, 4x4s, etc.

The idea is based on using modular elements of the vehicle structure, platform, systems, etc. across a family of niche variants, with a combined production of say 50,000 units pa. to avoid the horrendous costs of engineering traditional, less adaptable platforms.

There are structural components common to all family members but arranged differently for each variant around corner nodes which support drivetrain/suspension components, (ideal for hybrids), allowing you to make front and/or mid-engine layouts,or front and rear-wheel drive platforms, and two, five- or six seaters, from the same set of bits. Which you can't do with current platform sharing. ie. Golf, Seat, Audis & Skodas all on the same platform, but all the same size, & all front wheel drive.

It's exactly what someone like MGR should be doing, maybe if they'd got Matra it would've happened.

I chose not to mention the Lotus modulted architechture, and the pininfarina and Jaguar projects that are in the same vein as none of these are proven systems. In principle they may work, but even then there might be mass production issues that are easy to overcome with bespoke production components but at a higher cost - as would apply to Jaguar for instance. Other issues include to what degree the end products would be class compettitive and how it might work with other materials (especially where alluminium and/or plastic is not desirable).

Good luck to anyone considering this but IMO it is a risky avenue to go down and a biddeer should not build their business plan around it.

 

Isn't the Pininfarin Double-Face system designed as a way of adapting an existing body structure to suit a new body variant? eg building a coupe version of a saloon?

Interesting that David Knowles Total MG article about "Project Viking" mentioned the idea of an ungodly alliance of Lea Francis chassis and ZT bulkhead...

As for soft tooling, that's the reason why we have the MGF and Tomcat, cars which could not have been economically viable ten years earlier for the cost of tooling.

 

Nobody's saying 'build the Lotus way' - they're saying use the Variable Vehicle Architecture they developed. This, and the space-frame are viewed by vehicle analysts as core technologies that could allow medium scale production to be profitable, and develop a variety of model varients on which would be suitable for a company looking to survive on niche products like MGR.

Sorry this is what I was getting at and i believe is what Triple A want to do. Why not build Rover's this way. Unproven yes, but it was unproven that Ford could mass produce the car until he actually did it.....

 

Sorry this is what I was getting at and i believe is what Triple A want to do. Why not build Rover's this way. Unproven yes, but it was unproven that Ford could mass produce the car until he actually did it.....

No, the variable architecture for 50,000-100,000 units pa that Pininfarina were involved in that ATB was referring to is most definitely NOT what Triple A claim on their website.

Triple A mentioned Lotus, and were talking about 14+ models totalling 200,000 cars pa. That's 15,000 pa or less per model. The prices will be in the specialist sector like the volumes. Expect to pay a lot for them. Expect reliability problems. Unproven means its a risk - that's on top of all the other drawbacks (whereas Henry Ford was simply trying a method that hadn't been done before, no one argued with the potential profitibilty of the idea). In this respwect the problems are very much outside the core business - marketing, distribution, unit costs, etc. At least Lotus have Proton - a major owning them - and consultancy income. Are you suggesting Triple A, in being like Lotus, will have the consultancy and major OEM owner to make it work?

Exactly what sort of models mentioned on the site are typical of Rover anyway? Correct me if I'm wrong, but surely there were no executive or family cars on the list (except hybrids).