The dramatic price cut to Lotus cars under the brand’s new Australian distributor is almost certainly the right medium-term move for the brand ... but it's also an unequivocal slap in the face to recent buyers and their vehicles’ plummeting resale values.
As we reported earlier this week, new Lotus distributor Ateco Automotive has slashed prices across the entire Lotus range, with vehicles between $8000 and $46,000 cheaper than they were under the previous distributor (Proton-managed Lotus Cars Australia).
In July, the entry-level Evora was priced from $146,990 before on-road costs. Today, it is priced from $119,990 and includes more than $18,000 worth of extra features that were previously optional, leading to savings of around $46,000.
The Exige S – now priced from $79,990 – is $31,000 better value than before thanks to a $25,000 price cut and the addition of $6000 of extra features. Last month, an equivalent vehicle would have cost $110,990.
The story is similar for the top-spec Lotus Elise SC: $100,990 last month, $77,990 today.
Lotus Australia’s new managing director, Glen Sealey, explained the restructuring of the local line-up was prompted by three key factors:
“These changes reflect the strength of the dollar, our plans to grow Lotus in Australia and [the] requirement to ensure Australian Lotus dealers have a strong and viable business that will enable them to prepare their businesses for the arrival of the next generation of Lotus products,” Mr Sealey said.
Lotus’s new distributor is focused on taking the brand forward at any cost – even if that means alienating its most recent customers, who paid thousands more for their vehicles than they are now worth.
Ateco Automotive spokesman, Edward Rowe, said the primary consideration was the long-term future of the brand.
“We’ve taken over this business and the last thing we wanted was to leave it as it was,” Mr Rowe said. “Our job is to grow the business.
“Over the past six or seven weeks, every motoring journalist has told me: ‘Lotus products are too expensive. You need to bring the prices down.’ That’s exactly what we’ve done.“We are taking a long-term view of the business. We need to grow it with products that are properly specced and properly equipped.”
Mr Rowe admitted the decision to cut prices was likely to frustrate some recent customers.
“We’re damned if we do and damned if we don’t,” he said. “Obviously there is a downside.“As we build up demand there will be more interest and more value to the Lotus brand, and that will drag up the value of used cars.”
Mr Rowe said the new Lotus management planned to “talk with” current owners, but said offering rebates was out of the question.
“You couldn’t open a can of worms like that. It happens every time you buy something, prices change. I purchased a plasma TV for $5500 last year. It’s now on sale for $1200.“You can’t have your cake and eat it.”
Club Lotus Australia represents a number of local Lotus owners and enthusiasts. Club President, Ashton Roskill, admitted some recent customers would feel hard done by, but said he was excited about Ateco’s long-term vision for the British sports car brand.
“There are no two ways about it. It will aggravate some people, but from Ateco’s point of view, I think they announced it as quickly as they could,” Mr Roskill said.“It will have an impact [on resale] and it’s really unfortunate for those customers, but it’s something they [Ateco] thought very carefully about.”
He said the decision to completely overhaul the line-up was a positive move for the brand from a big-picture perspective.
“If you’re not intending to sell your car in the foreseeable future then obviously there will be less impact on resale value,” Mr Roskill said.
Although Ateco stands to alienate a number of recent Lotus customers, the ‘recent Lotus buyer’ is a tiny demographic in Australia.
Just 19 were sold in Australia over the first seven months of this year. Looking back over recent years, 53 were sold in 2010, 58 in 2009, 70 in 2008 and 90 in 2007. Any further back and it’s difficult to make a case that resale value would be significantly impacted as a direct result of the recent price cuts.
In any case, that’s 290 Australian Lotus owners who, if they tried to sell their car tomorrow, would get substantially less than they would have less than four weeks ago, and 290 Australian Lotus owners who have a reason to feel violated by the recent range restructuring. Clearly, Ateco Automotive has formed the view that Lotus's upcoming new customers are more important than the handful of existing ones.