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Group Lotus confirms buy-in to Renault F1 team
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Group Lotus confirms buy-in to Renault F1 team
Posted By: James Allen  |  08 Dec 2010   |  11:57 am GMT  |  179 comments

There will be a new partnership on the F1 grid next year as Group Lotus, owned by the Malaysian government via Proton, has bought a stake in the Enstone based F1 team, creating Lotus Renault GP.

This deal, which sees Lotus come in both as an equity partner alongside Genii Capital, the teams’ main shareholder, and as the main sponsor of the team, has been mooted for many months now and was finally signed off at the start of this week. In addition to a stake in the team, which is open ended, Lotus will be the title sponsor until at least 2017.

For the moment, Genii has bought out Renault’s 25% stake and will then sell a stake to Group Lotus, believed to be between 25% and 50%.


A photo with proposed livery has been issued and the car switches to the iconic black and gold of the JPS Lotus days from the 1970s. This was an idea that Tony Fernandes announced for Team Lotus for next year and he ran a fan competition to design the livery.

Although this move means the end of Renault having a stake in an F1 team, its name remains on several levels. First the chassis will still be called a Renault. Second, the car will have significant Renault branding, thirdly the engine operation in Viry Chatillon will operate as Renault Sport F1 and as such will be a profit centre for Renault, supplying the engines to Lotus Renault GP, Red Bull and the team currently entered as Team Lotus and owned by Tony Fernandes.

So without any of the liability of running its own team, Renault is still getting a lot out of this deal and there is a financial consideration for this, but nothing like what it used to spend. To the man in the street it will look like Renault is still heavily engaged in F1 and will benefit from any success the team accrues.

Viry will also collaborate with Enstone on gearbox and KERS development and will work on the preparation of the new generation of small capacity eco F1 engines for 2013, due to be announced by the FIA later this week.

This deal has its origins in discussions between Group Lotus and Genii Capital, which started in Autumn 2009, before Genii bought the Renault F1 team and were not involved with racing. It evolved an F1 dimension and this partially explains why Group Lotus was prepared to grant a licence to Fernandes to use the Lotus name in 2010 and then has been trying to reverse out of it in the second half of this year.

There is a wider business angle to the partnership. Lotus and Genii will collaborate on road cars, with Genii offering Lotus access to its the network of automotive technology companies it owns, which specialise in variable compression engine technology as well as vehicle systems and in-car VOIP and internet technology. Also central to the deal is that Genii with its extensive operations in Russia will give Proton a way into the Russian market, which will help Vitaly Petrov’s claims on a race seat next year.

The naming of the team as Lotus Renault GP, represents a fresh start. The team will not use “F1” in its team name for two reasons; it is not allowed to use the words “Team” and “Lotus” in the same name and FOM stipulates that any team with “F1” in its name has to also have the word “team”. Second the management wants no association Renault F1 team, after all the difficulties of the last two years over the Singapore crash scandal.

The new team will not claim any of Lotus’ F1 heritage, instead will trade on the history of the Enstone based team which as Toleman, Benetton and Renault has a proud history of its own in the sport.


This game of poker now leaves Tony Fernandes to make the next move. He has entered next year’s world championship as Team Lotus and has a contract for Renault engines. The entry states that the chassis will be Lotus Renaults. So there is a confusion which does not work for either party or for FOM or the FIA. The issue needs resolving as experienced F1 sponsors I’ve spoken to indicated that any prospective sponsors will be reluctant to engage with the team while there is uncertainty hanging over the brand.

There is still still a court case on this to be heard at some point in 2011, but this really needs resolving before the season starts.

The Group Lotus announcement contained statements of support for the deal from Malaysian government officials including a former prime minister. Tun Dr Mahathir Mohamad, Proton advisor and former Prime Minister of Malaysia, said: “This is an exciting development which delivers strategic benefits to both Group Lotus and Proton. I fully support the partnership.”

So it will be interesting to see what Fernandes does. His initial reaction on Twitter today was, “Dany bahr (sic) has done us a favour. Never felt better about our future and Team Lotus. Looks like the trying to hijak our black and gold idea.”

Fernandes’ team has a strong following, having taken on some of the underdog status of Super Aguri, which became phenomenally popular. Fernandes has a popularist approach and tweets to his followers regularly, but here he appears to be taking on Renault, Proton and factions of the Malaysian government. He may own an airline and have some powerful shareholders, but it’s still a David vs Goliath struggle and today’s move is a power play by Proton.

As a side note, under UK law, a 25% shareholder in a company can block the sale of the company if it does not want to sell to the preferred buyer of the majority shareholder.

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1

This is a genuinely great post! Thanks a lot for that information and facts. I will travel home without delay and learn much more about this.

2

If this new lotus team wishes to build on it British hertiage, will they want a british driver.

This year I noticed Petrov had Lada branding, but I would expect that to disappear as triple automotive branding on 1 f1 car doesnt seem to fit.

I guess it works if they are in the same group i.e Mclaren Mercedes but now rivals, and Fiat and Ferrari, owner and ownee.

Possibly Paul Di Resta in the other seat? I hope so. Hes proved his worth

3

Completely off topic, James. There has been a change of plans and I will have to be out of the country. There is no way I can track where your book has reached from the info that Grand Prix Legends has or from the USPS postal service. Is there anyway that I will be able to redirect and receive the book? This was meant to be a present for my wife on our first wedding anniversary. 🙁

4

I don’t understand. Please email james@jamesallenonf1,com with an explanation of what you want and we’ll see what we can do.

5

Hi James,

I did send you an email. Wondering if you got a chance to go through it. I have a question : Will I be able to order another signed copy from you in case I didn’t get the one I ordered earlier? It would be appreciated a lot! Thanks.

6

I’ve passed it onto our ecommerce partner. seems quite hard if you didn’t arrange for mail forwarding. Yes you can order another book

7

how can group lotus afford to buy 25-50% of the renault / genii team?

that there’s seemingly no strategic link between renault and lotus, or proton and renault, shows the short-sightedness of behars plans – there’s absolutely no reason for group lotus to need to be involved with the renault team, certainly on a cost per reward basis. in terms of popularity, group lotus is taking a massive hit with this move, and to try to position themselves as competitors to porsche and ferrari simply by virtue of the fact that they are now in F1 (clearly as nothing more than a name on someone elses car, a marketing exercise) is retarded. it’s certainly not going to do anything to change the cars, at least not positively – we’ll have to wait see what damage this level of investment into F1 will do to group lotus funds but they won’t be getting any kind of return on it and the cars as a result will have to suffer unless proton just bank rolls it.

group lotus should clearly have settled with a partnership of team lotus. any renault links that could have strengthened lotus or proton cars would still be available. what does genii have to offer – VOIP in cars!? if there’s one thing i wouldn’t want in my lotus it’s crap like that.

8

Hi James,

One thing I don’t quite understand is why Group Lotus wouldn’t want to buy into Fernandes’ Team Lotus and go for a seemingly random team like Renault instead?

Great site as always,
Ohm.

9

1. Fernandes’ team is Fernandes’ team, 2. Renault is much higher up the grid with infrasructure capable of winning the title only 4 years ago. 3 The main reason is a business to business deal on road cars, between Genii and Lotus. F1 is the promotional vehicle. This is about business

10

3. the ego of danny behar

11

As commented above, I really hate Jonathan Legard’s commentry. I would listen to the 5 Live broadcast but I love the insite and comments by Brundle so I stay with the BBC and just shout at the screen whenever Legard gets it wrong. I sat get Mr Allen back – afterall, he was about the only one that spotted that Lewis H was going to win the drivers championship in 2008 during the last lap – more than the entire Ferrari team could do until the race had ended!!

Let’s get rid of Legard, if we can’t have James Allen then let’s have Karun Chandhok – he could probably even do it from the cockpit if he is allowed to drive next year and still do a better job…

12

There was a suggestion way back in this thread that Bernie Ecclestone would resolve the situation by banging their heads together.

Past experience suggests that the current stramash is precisely what Mr Ecclestone wants. It uses an emotive brand and some big names to get headlines for F1 in the off-season when otherwise all would be quiet. He has to invest nothing in it apart from throwing in the occasional provocative comment to keep the pot boiling. The participants also get plenty of headlines for Proton/Air Asia/Renault.

This may not have been set up as a cynical exercise in media manipulation but it’s certainly turning into one.

13

“The new team will not claim any of Lotus’ F1 heritage”

Is that not a bit at odds with what Bahar said today, James?

From Autosport: “We’re well aware that there has been a lot of controversy around the usage of our brand in F1 and I’m delighted to be able to formally clarify our position once and for all: we are Lotus and we are back.”

Unless of course he’s referring merely to the sponsorship thing, though considering that they have the achievements of Team Lotus plastered all over their UK HQ that seems somewhat unlikely.

14

A black and gold livery seems at odds with that claim!

15

That’s not what I’ve been told from the Genii/Renault team side.

16

Indeed, the livery says it all.

17

Hey James,

Going on from the JPS branding association and it s current banning from the FIA. Conspiracy theorists might say Tony lured Group Lotus into the JPS branding only for them to have it banned by the FIA under the “no tobacco advertisement” and forcing them to change their livery and invoke embarrassment on Proton and Dany Bahar for such a knee-jerk reaction.

18

Hi James,

What do you think Fernandes’ next move will be? Will he press ahead with his plans to use the Team Lotus name? If so will he choose a different livery (i.e. green/yellow) or will he keep his plans to use the JPS black/gold livery just like Lotus Renault GP? Or do you think some sort of deal will be made between him and Dany Bahar tommorrow at the F1 commission where they agree a financial deal for Tony to give up the name?

Great blog as always James!

Cheers

19

Interesting that Gascoyne was talking up the green and yellow livery tonight. But the name thing is the real problem

20

Hi James,

Maybe someone already asked you. How do you explain considering all this messy situation, Renault accepted to provide engines to Fernandez? Is that because its financial situation was not so good and they were looking for money at any cost?

And who decided to provide the engines to Fernandez: Renault or Genii?

21

Renault corporate did the deal with Fernandes. I get the feeling the Genii/Lotus deal came on strong once Fernandes deal was already well underway. He was going to use Renault gearbox/back end but that would have come from Enstone and he suddenly backed out of that and did the deal with Red Bull.

22

To what extend will Renault contibute in construction of chasis next year?

In the forthcoming years they will provide the KERS and engine including 2013 regulations. However I wonder who will be responsible for designing the whole car in the coming years? Does it mean Lotus is to have influance on engineering issues?

23

Not at all. But it will still be called a Renault. They’ll do the engine, but chassis is done at Enstone.

24

Maybe Dany Bahar was inspired by F1 itself.

There are drivers in Red Bull-owned cars which look almost like the Red Bull cars but are not RBR cars. There are silver cars with a Mercedes engine in the back, but they’re supposed to not be “The Silver Arrows”, and Mercedes doesn’t own anything of it anymore. Then you have cars which are meant to be “The Silver Arrows” but don’t look like Silver Arrows at all, more like a grey version of a BMW Sauber, because of the ugly-green Petronas branding which many people still associate with Sauber, but it’s a Mercedes-Benz. There are BMW Sauber cars, but they have a Ferrari engine, and BMW doesn’t own any of it anymore, and are (somehow) thought to have left the sport. What else? A Renault which isn’t owned by Renault anymore but still has Renault engines. And so on.

I think we should spare a thought for the poor Mr. Ghosn, Renault CEO, who got a bit confused by all this brand malarkey. He thought it would be a good idea to a) agree to GenII selling the so-called Renault F1 team to GROUP Lotus so there’ll be a “Lotus-Renault” F1 team, and b) sign a contract with the existing Lotus Racing team about engine supply, so there’ll be another “Lotus-Renault” F1 team. He must have had some sort of a Groundhog Day-moment and thought “Wait – didn’t I do this already? Oh never mind, let’s get on with the daily chores and sign that piece of paper. If it was the right thing to do first time it can’t be that wrong now, can it?”

25

Schmorbraten or Soeren…

26

James, what happens when (if) Renault pulls out of F1 completely. With engine specs changing in 2013, will they want to make a new engine to supply, or make a chassis for a team they dont have a stake in? Group Lotus wouldnt be allowed to race as Lotus or anything including the name Lotus, would they? Im surised they dont race under the Proton flag, a Malaysian company ofcourse and i imagine would help them and their country no end.

Oh, and the Black & Gold livery, silly for Group Lotus/Lotus Renault to do. They looks fools for copying an idea that Team Lotus are doing, and appears desprate, and thats not thinking of the fact that the JPS cars was not part of Lotus Cars (non-F1) heritage. As i say, looks very silly on their part.

27

Renault is out of F1 as a team owner, but is committed to doing the new engines, in fact they are one of the new formula’s biggest supporters.

28

Renault-Lotus should hire Bruno Senna as a driver with the Senna helmet colors! just to complete the picture from an old 80s’ magazine.

29

A lot of comments on here by people who have not bothered to read the history or listen to the facts.

Tony announced his intent to use the JPS black/gold colours weeks ago, there has been a competition on the Lotus Racing website to design the livery, so it is not a surprise that Baha should try and steal his thunder.

Baha’s ego may well be the end of Group Lotus, they have been bankrupt or on the edge of it several times in my working life. His cavalier use of it’s resources and shedding of irreplaceable engineering and design knowledge from Lotus Cars and ~Lotus Engineering leaves it weaker and in a very vulnerable state.

When he could have had Tony advertising Lotus Cars virtually for free, and had the parent company Proton as the Renault sponsor. Proton desperately need an international image and a boost to flagging sales. (Their home position gets worse when import restrictions on competing cars are removed soon) The only question in my mind is with Baha in charge how long will Lotus cars last?

I am aware in the back of my mind that James has said way back months go that Tony will have to change the team name, he has inside info, but I have read up as much as I can and as far as I can see Tony has a watertight case, David Hunt may be suing Group Lotus separately in any case.

Should Malaysian government pressure from an (ex, remember, not current) prime minister be sufficient then we will all know who to blame.

30

maybe he announced it weeks ago because he heard that the Renault-Lotus team were going to use that.

It was a complete u-turn from the ‘original Lotus green/yellow that Chapman loved’

Anyone else notice the similarities between Air-Asia and Virgin logo’s and business model?

TF is a great business man, but not very original in ideas!

31

I think we spoke about it a while back. I’m with you in thinking he has a good case.

I did twitter Tony saying he should go out and buy proton. Now that sir would be funny.

The barracuda eating the goldfish, only to be swallowed by a shark.

32

“I did twitter Tony saying he should go out and buy proton. Now that sir would be funny.”

This may not be as far from practicality as it sounds. Proton seem to be in serious trouble and considering a merger with the other Malaysian motor manufacturer. Should the merger not go ahead there will come a time when the company’s NAV (nett asset value) is around the same as it’s debts, at which point it can be bought for nothing. The import restrictions currently helping Proton with a protected market will be removed, then we shall see.

Whilst being a Tony supporter I think that Bahar has missed a huge opportunity here to promote Proton, whilst getting the Lotus promotion for free from Tony.

It now seems likely that Team Lotus will carry on with the Green/yellow livery.

33

Wow. Is this a case of ego? Or is there a huge difference commercially (for instance, ease of attracting sponsors) of using a well known name such as Team Lotus? Why would Tony Fernandes be so adamant about using the “Lotus” name. Isn’t it free advertisement for Proton’s road cars. Why not call it something else “Air Asia Racing”?

34

So will we have two teams with “Lotus” in their names next year? I know that the new Lotus had problems with it, but I didn’t follow it closely enough – was that case somehow solved by the court or not yet? So will there be Lotus Renault GP and Lotus Racing or just Lotus Renault GP while the other one gets a different name?

Funnily enough – there was no Lotus for sometime in F1 and now we suddenly have quite an abundance of it :).

35

I read an article months ago from Walker about this and he is 100% right,nobody who saw the real Lotus team will ever link these jokes to it(when he wrote it there was just one new Lotus team).He also said why not to take the Force India example because the name hits every single spot,I can not believe this is happening, only one man can solve it and we all know who he is, thankfully we all know that motorsports runs in his blood.

36

i don’t know what to think… A car company should have rights to use its brand if they want to get into F1. It’s a law case and i am not good at it. Can i enter to F1 as Team Honda F1 for example not asking Honda if i can use the name, because my surname is Honda? Team Lotus was someway associated with Lotus cars manufacturer in the past, it had Lotus logo as same as Lotus Cars. Does Fernades own suddenly rights to Lotus logo too?I am confused..maybe it’s like Joe Saw ard wrote “[..]He may reason that he has nothing to lose: either Proton will pay his price and give him the money to launch a new brand in F1; or he could be playing a longer game in which he will wait for the collapse of Group Lotus, the disappearance of Bahar – and probably Zainal as well – and then swoop in and save the day, using the F1 team to relaunch Lotus under his control, probably buying the whole Proton group from the government, which would be a repeat of what he did with AirAsia[..]”

37

Lotus Renault have gone Back To The Future.

Simple.

38
michael grievson

I’m confused by this whole thing. I think I’ll hibernate until it’s all over :o)

39

Interesting… Nobody is mentioning the drivers situation. Kubica is probably free to go. But where ? The second driver. Is Petrov still front-runner ? I guess, he is not. What is your wisdom James ?

40

Kubica is confirmed and will stay – unless Ferrari dump Massa and offer Lotus Renault a big cheque, which seems unlikely at the moment. Kubica’s contract is with Renault corporate, which is now no longer involved in the team, so there must have been some new paperwork there. Group Lotus boss Danny Bahar has said today that his preferred choice to partner Kubica is Petrov

41

This is seriously becoming a joke. This needs to be sorted out ASAP. I really don’t want to answer any more questions of my fellow not-so-enthusiastic-confused fan of F1. It ruins the race weekend.

Both parties have to decide as you James also point out about sponsorships. Is this helping the Lotus brand?

42

Okay, so the 2nd “Lotus Renault” fully acknowledges that both the chassis and engine will still be recognized as “Renault” designed. Plus, they will not associate themselves with Colin Chapman’s original Team Lotus…. Er, someone enlighten me then please: where does the “Lotus” name fit in in all of that again; given they will neither claim the car to be a “Lotus” nor will they associate themselves with the original outfit???

Although I have grown to admire and support Tony Fernandes’s efforts on reviving “Team Lotus”, even I’m still having a really tough time acknowledging them as a direct descendant of Colin Chapman’s famous team. I mean, they just popped out of nowhere too and there has been no trace of continuity from the original Lotus in them (in terms of personnel or figure) aside from the name, of course.

43

The Lotus name really only fits in as an expensive branding-exercise, nothing more. Rather a lot like Marussia’s involvement, come to think of it. Lotus Cars themselves are busily exploiting Team Lotus’ history though, so perhaps they’ll start doing that later. When the legal smoke has cleared. The Endstone team will like it this way though. They have a perfectly respectable history of their own.

I’m not generally in favour of brand-necromancy but Fernandes has at least sought out the Chapmans and the PEOPLE behind the old Team. They all support him and he bought the rights from the last real team-owner. And they’re in Norfolk. And he has Chapman’s cap! It’s a bit more than just a name, really. Not much more but it’s enough for me.

44

i totally agree, it’s like Michael Jackson owning the rights to the Beatles songs, it didn’t make him a Beatle.

as far as i’m concerned Lotus F1 should remain an awesome peice of racing history. neither the brand nor CCs hallowed name should be dragged through the mud like this.

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