Famous British racing car manufacturer Lola is set to enter administration after struggling to stay afloat through Europe's latest economic downturn.
The Lola Group, which comprises the engineering division Lola Cars International Ltd and carbonfibre specialist Lola Composites Ltd, says the UK government’s decision not to pay ongoing research and development tax credits has caused a "serious cash flow problem for the businesses".
Lola says the move to appoint an administrator allows the board to continue discussions with possible investors and prospective purchasers “with a view to securing the best outcome for the staff, creditors and customers of both businesses”.
The Huntingdon-based company, which employs more than 170 people, has been involved in motorsport since 1958, and significant investments in recent years have seen it branch out to manufacture products for the aerospace, communications, defence and renewable energy industries.
This is the second time Lola has been forced into administration; the first coming in 1997 after the company’s calamitous attempt at making a return to Formula One, where both cars failed to qualify for the Australian Grand Prix and did not attend the rest of the season.
Despite falling on hard times, Lola has enjoyed considerable success in numerous motorsport series in recent years. Last year, Lola won both the LMP1 and LMP2 constructors’ championships in the American Le Mans Series, and it has won five of the past 12 LMP2 titles at the Le Mans 24-Hour.