The importance of being branded: The fight for the Lotus legacy

September 29, 2010

The current dispute between Tony Fernandes’ Lotus F1 team and Group Lotus, owned by Proton cars, underlines the importance of brands and who owns them. Formula 1 is a brand business, F1 itself is owned by CVC Capital Partners, a brand which they protect and enforce in order to make significant returns on their investment. But even Formula 1 is secondary, in terms of global presence, to its most successful team – Ferrari, and it is the Ferrari brand that provides an example to all in F1 as to what can be achieved from fast cars and motorsport. Of course the irony is that Enzo Ferrari wasn’t interested in building brands, he just wanted to win races and his road car operation was only there to fund the race team – the exact opposite of the other automotive manufacturers who have typically looked to F1 to help them sell road cars. And it is probably for this reason that the Ferrari brand has always been so different and so enigmatic.

A number of teams have attempted to emulate Ferrari, the most recent being McLaren. McLaren’s foray into high value road cars and other luxury items such as audio systems have underlined McLaren Group’s aspiration to become a global brand to the same value and impact as Ferrari. There is clearly a long way for them to go, but their recent move away from the Mercedes brand and their focus on a new road car, the McLaren MP4-12C, has indicated a clear strategy where the F1 team is a key element, but not the only component in a brand building activity.

Enzo Ferrari was famously contemptuous about the British constructors during the sixties and seventies, referring to them as garagistes and assemblatori, in other words he did not consider them to be proper race car manufacturers, but it was also recognised that the one person he really respected was Lotus founder Colin Chapman, you only need to read Enzo’s foreword to Jabby Crombac’s excellent book on Chapman, “Colin Chapman: The Man and His Cars” to recognise this. Chapman’s Lotus was the thorn in Ferrari’s side during both their heydays from the sixties through to the late seventies. The most remarkable thing about Chapman was that he was not only a very capable leader and negotiator as, of course, was Enzo, but he was also a brilliant engineer. If you track the evolution of the F1 car from 1960 through to 1980 the majority of the major innovations and trends were down to Colin Chapman. The Lotus team were famous for their ‘all-nighters’ during this time and we are not talking about partying until the small hours, but working on the cars, rebuilding and modifying through the night to ensure that Chapman’s latest tweaks and ideas were incorporated in the car before the race. During this period Lotus was the name and brand that was equal to, and often beating Ferrari. And like Ferrari, Lotus also had a flourishing road car business, focusing on both tuning existing mass produced cars such as the Lotus Cortina with Ford and the Lotus Sunbeam with Chrysler, and producing light, innovative sports cars such as the Lotus Elan and Lotus Elite. They were in a different space to Ferrari, less of the luxury and more of the fun and performance.

And so today what we see between Tony Fernandes’ Lotus F1 team and Malaysian car manufacturer Proton’s Group Lotus is a battle for the Chapman legacy. Proton acquired and rescued the ailing Lotus company in 1996. Through investment in new products such as the Lotus Elise they sought to regain the ethos and spirit of Lotus, with a relatively low cost sports car that acquitted itself well on the racetrack and also used innovative technologies such as a bonded aluminium chassis. Certainly in rebuilding the business they did not see F1 as an essential ingredient, and focusing at the club level they have rebuilt the Lotus motorsport presence. Then along comes Tony Fernandes and Mike Gascoyne with a vision and passion to rebuild the Lotus F1 team, locating in Norfolk and using the Lotus name licensed from Group Lotus. The new team is very much the best of the new entrants it has impressed on the paddock and (most importantly) Bernie Ecclestone that they mean business and are here to stay. In reaction to this event Group Lotus appear to realise that there is an opportunity here, they recruit Dany Bahr from Ferrari to help build up their brand, who then brings in a number of Ferrari personnel and then start to look at running their own GP2 race teams in conjunction with ART and Felipe Massa’s manager Nicolas Todt. The licensing deal with Tony Fernandes falls apart and now the lawyers are going to get rich.

Of course this is all about ego and power, something that crops up in F1 rather frequently. But isn’t it a real shame that they can’t work together and, as in the old days, have both Group Lotus and Team Lotus working off each other, driving forward the Lotus name to become a global brand exemplifying fast cars, high performance and competition? Perhaps good sense will ultimately prevail and if they are able to work together maybe they’ll even have Ferrari worried.

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