The battle over the use of the name Lotus in F1 is in a holding pattern at the moment as the two sides wait for the judge, who heard the case last month at the High Court in London, to deliver his judgement.
This will probably come in the next couple of weeks.
But in the last few days, stories have emerged of what Team Lotus boss Tony Fernandes’ next move is likely to be. On Wednesday 27th April he is holding a press conference at Duxford aerodrome, near Cambridge to announce a new business venture and both Reuters and Autosport have reported that this is to announce that he has acquired the Caterham brand, makers of Lotus 7 shaped sports cars. The event is at an aerodrome because the F1 team Lotus will do some straight line aero testing that day.
But what might he be trying to do with Caterham?
Fernandes’ original idea when starting the F1 team and licencing the Lotus name was to rebuild the Lotus brand identity via Formula 1 and then make an offer to the Malaysian government to take over Group Lotus from the state owned Proton company. He would then have been making affordable sports cars, which he promoted via his F1 team. This plan was thwarted by the arrival of Bahar as CEO at Group Lotus, who cancelled the licence to use the Lotus name in F1 and launched his own ambitious plans for a range of Lotus cars.
Fernandes could have waited to see whether Bahar’s plans fail, which might give him a chance to follow through on his original plan, but that could take years and anyway Bahar might succeed, so Fernandes needed another route to market for his road car ambitions.
I spoke to him several times before Christmas about his vision for F1 and listening back to the recording today, a picture begins to emerge of how Caterham fits into the strategy, particularly if he wins the High Court case and is allowed to keep the Team Lotus name in F1.
Fernandes believes that Lotus’ heartland is the affordable sports car sector of the market, the £20,000 to £40,000 bracket; “guys that cannot afford Porsches or Ferraris, but want a sports car”. He believes that this is going to be a massive market in his part of the world, which is Asia. Almost a third of the F1 Grands Prix are now in Asia and he is positioning his team as the Asian F1 team.
Here he differs from the likes of McLaren, which is firmly targeted at the higher end of the market and Ferrari, which has been using F1 to sell sports cars since the 1950s.
“Over the last year we have seen the strength and the weakness of the Lotus brand and what we can do in Asia in terms of monetising a brand, ” he said.
“We can offer a very powerful billboard on the car, (which) could be used to promote things that we own or want to develop.”
So ultimately this could lead to him slightly rebranding the F1 outfit as Team Lotus Caterham (if he wins the court case) and then manufacturing a range of sports cars called Caterham. By doing it this way he has all the brand association from the F1 team, without needing to call the road cars Lotus.
If he loses the case he has a sports car brand with a strong heritage in the right sector and the right associations to build the F1 team around.
Also with F1 moving towards a more road relevant 1.6 litre turbocharged hybrid engine in 2013, the opportunity is there to put a production version of the engine into an affordable sports car and really trade on the F1 connection.
Fernandes feels that Lotus boss Danny Bahar is making a strategic error in directing Group Lotus into the higher end of the market, away from its traditional customer base and into areas where Ferrari and Porsche are so strong.
The Caterham brand has been in that lower end of the market for many years, since the rights to build the design known as the Lotus 7 were acquired by the Nearn family from Colin Chapman in 1973. They sold it on to a former Lotus executive from Malaysia six years ago.
Caterhams have a thriving racing pedigree too, with many championships in existence around the world. They are very easy to drive hard and great fun.
Fernandes’ Air Asia carries around 14 million passengers a year via its hubs in Kuala Lumpur, Bangkok and Jakarta and can market his cars directly to them as well to a wider audience via the F1 platform.
His brand ethos with his airline, Air Asia is “now everyone can fly” and it looks like he’s trying to take the same message into mass market sports cars.