The row over the use of the Lotus brand in F1 has been bubbling under the surface for a long time and today it went public. Proton, the owner of Group Lotus, which makes road cars said that the F1 team had no rights to use the name Lotus.
This followed an announcement at the weekend that Tony Fernandes’s Lotus F1 team had acquired the rights to the Team Lotus name from David Hunt, who has owned it since 1994. From next season Tony Fernandes’ outfit will be called Team Lotus. He has made this move in order to bring the original team name back, but also because the licence which he was granted by Group Lotus is not being renewed.
Today Proton came out and said that Fernandes’ company Tune Group has no right to use the Lotus name and tonight, the CEO of the F1 team, Riad Asmat, said that they would contest this in the High Court in London.
“As Tune Group has now bought Team Lotus Ventures it means we can now use the Team Lotus name for 2011 and beyond, ” he said. “We are all delighted we can go into 2011 with total confidence in what we own, and what we can take to the track.
“Given that this is contested by Group Lotus we think now is the time to clear this matter up so there can be no further arguments. We have therefore today issued proceedings in the English High Court for a declaration that Team Lotus Ventures has the rights to use the Team Lotus name and everything associated with that brand in relation to Formula 1.”
There are many other exciting developments in the Lotus F1 team’s pipeline, like a two year deal to use Renault engines and gearboxes, which will be announced shortly. They intend to retain both drivers and there are also some new arrivals in the technical department as the team seeks to challenge the midfield in 2011.
But the row over the rights to the brand must be cleared up first.
Fernandes would like the two sides to be unified and so putting it back to what it was – a car company whose brand is internationally promoted via F1 racing. This is the business model of Ferrari and its what Ron Dennis is busy building at McLaren.
Group Lotus is run by Danny Behar, formerly in charge of Red Bull and then head of brand at Ferrari. He has some ex-Ferrari F1 team associates in his management team at Lotus and it would seem that they has had the intention of building up to a possible F1 entry. But Fernandes got there first, his entry pushed through last September by Max Mosley and Bernie Ecclestone. There were two reasons why that happened; Mosley wanted a fourth customer for Cosworth to make the engine programme viable and Ecclestone liked the idea of the Lotus brand being back in F1 and has time for can-do entrepreneurs like Fernandes.
It seems that Behar is building up the racing side, entering GP2 in partnership with ART for next season. Confusingly Fernandes is also starting a GP2 team as a staircase to F1. Fernandes is investing in Malaysian grass roots motorsport to underline his commitment and send the right signals to the Malaysian government.
This situation is an unwelcome complication for Fernandes, but he seems to be pushing hard now to force the issue. He holds many strong cards, not least the fact that his team is already in F1, he has the Team Lotus assets, still has the support of Ecclestone and has plenty of money. His Air Asia business now carries 24 million passengers a year and has a market capitalisation of £1.2 billion.
“This year we operated under a licence from Group Lotus and next year we will operate under our own ownership,” said Fernandes. “We would like to co-operate but if Group Lotus doesn’t want to then there’s not much we can do about it. Maybe the ownership will come under one anyway in due time. It makes sense if they did. If I was sitting there and there was a Formula One team that’s going around the world with twenty races, promoting a brand, if I was the CEO, I would definitely want to get involved, especially if I’m not putting any money in it.”
This looks highly unlikely now. It’s a war between two experts at building a brand, who are locked in a political and now legal battle. The legal side will clear up some of the issues, but it looks like it may come down to high level intervention by the Malaysian government.
The key thing from Fernandes point of view is that he has an F1 team and if he’s forced to change the name he can.
I understand that Group Lotus, like ART owner Nicolas Todt has been evaluating Sauber and Toro Rosso.