| | | Effective PR

Et tu, Lotus

Editorial Staff

When the UK started charging purchase tax on cars, Colin Chapman found a loophole: if he sold his Lotus cars in kit form, buyers did not have to pay the tax. Caterham Cars started their business as an early - perhaps the first - dealer for Lotus Cars, building kits of the Lotus Seven for customers who didn't trust themselves to build the car from a kit.

The company ran in family hands for years, eventually being sold to investors who have developed the product line to produce some formidable road-race vehicles. Now it's been bought out again - this time by Team Lotus, the F1 outfit run by Tony Fernandes of Air Asia.

When Colin Chapman decided that building "the nearest thing to motorcycling on four wheels" was to be replaced by more conventional cars - starting with the Lotus Elise (the original), then the Elan, the Europa and so on - eventually leading to the model that eventually became the supercar that was the Lotus Esprit, the plans for the original Lotus Seven were sold to Caterham, a small outfit that, basically, ran out of a small workshop. But the Lotus name did not go with the deal.

In the meantime, Lotus has moved on, Group Lotus passing through a succession of hands including an ill-fated dalliance with General Motors who entirely failed to appreciate what it had and tried its hand at making British sports cars out of the international parts bin. Lotus, to its credit, fought back - perhaps the only GM subsidiary to do so, and even bought transmission and engines from outside the GM group. GM gave up and sold the Norfolk pain in the backside. It eventually ended up in the hands of Malaysia's Proton who, at the time, didn't care much about Lotus Cars but fully understood the benefits of buying-in Lotus know how. But Proton allowed Lotus to continue to develop sports cars and invested in a new, high profile (and largely from big-name European sports car manufacturers) management who have announced plans to abandon all the current (fantastic) range and develop Lotus into a rival to Porsche and Ferrari. Which kind of brings the story around in a circle: the cars that are the mainstay of the range will be dumped in favour of a risky move up market, just like the Lotus Seven was.

The Lotus Seven has spawned dozens of imitators. It's not a hard car to copy: a few bits of bent aluminium, a space frame and a big engine. If you ask really, really nicely you can have a windscreeen and a piece of flimsy weather covering masquerading as a roof.

And some companies, notably Tiger, have produced some spectacularly fast versions.

Caterham, these days with a proper factory, makes a version that even Top Gear's daredevil driver Richard Hammond found, to say the least, stimulating. Indeed, Top Gear - with its access to every fast car in the world, named the Caterham R500 its 2008 Car of the Year. And it cost only around GBP26,000 - pennies compared to its competition.

One-make race series have confirmed the Caterham 7 as a balls-out real sports car. But one thing remained a puzzle: why, with such a simple car, did Caterham not create an overseas manufacturing facility, to take account of lower production costs and tax breaks in, for example, ASEAN?

Enter Tony Fernandes, boss of Air Asia, Tune Hotels and a raft of other businesses - and Formula One's Team Lotus - the one with the genuine Lotus F1 name.

Now Team Lotus - which also races in GP2 - has bought Caterham Cars. It is not an odd addition. Fernandes has, as co-owner of the team, the owner of NAZA cars - a screwdriver plant that makes, amongst other things, Malaysian-made Peugeot and Kia models. It has full access to both the Malaysian market - where the motorcycle and first-step cars are king - as well as across ASEAN due to trade agreements. Little of the Caterham 7's body, running gear and chassis cannot be sourced or fabricated from locally available parts and materials - therefore bypassing Malaysia's penal tax regime on cars imported from outside ASEAN, even in CKD form.

Despite pent-up demand, Malaysia does not have even a single sports car producer.

Fernades said, when he created Team Lotus, that the intention was to build a facility at the Sepang International Circuit, home of the Malaysian Grand Prix - a race whose future was cast into doubt by government comments after the recent race. The capability to build cars with NAZA and the links with racing make perfect sense. Fernandes has not said that he intends to create a Caterham facility in Malaysia but it would be within his usual way of thinking to do just that. The start-up costs would be (in motor industry terms) small. And a space-frame built in Malaysia would cost a fraction of the same built in the UK, even with identical materials and standards - and far ahead of the garage operations that form most of the competition for the Caterham in the UK.

The current 7 is the spiritual successor to the original Lotus ideal as created by Chapman. And Team Lotus takes the same position in relation to the original Lotus F1 team.

It's not a surprise that Fernandes has bought Caterham: it would have been a surprise if he hadn't.