Lotus may close its UK plant and move production to the US

Lotus UK has been instructed by its Chinese owners to prepare for the cessation of production in Hethel. According to Autocar, the management has decided to move car assembly to the US.

Here's What We Know

Lotus is known as a British manufacturer of sports and racing cars. Lotus Cars Limited was founded in 1952 and has a rich history in motorsport, including participation in Formula 1. The company is currently part of China's Geely Corporation.

Lotus declined to comment officially but confirmed that production of the Emira sports car, the factory's flagship model, has been suspended since mid-May as the company deals with the impact of tariff increases in its key US market. Localising production could be the solution, Lotus CEO Feng Qingfeng told a conference on June 25.

Feng said the company had held "in-depth discussions with its strategic partners" about manufacturing in the US, without mentioning their names. Lotus is most likely to move some production, including the Emira, to Volvo Cars' underutilised plant in South Carolina. Volvo is also owned by Geely.

Lotus is looking to cut costs amid persistent losses. In April, the company laid off 270 workers in Hethel and, according to Autocar, its headquarters in Clerkenwell, which opened just a few months ago at huge expense, will be closed. The brand's flagship shop has been handed over to dealership group HR Owen, which is also apparently part of cost-cutting measures.

Geely bought Lotus in 2017 from Malaysian company DRB-Hitcom, but has yet to recoup its £2bn investment. Lotus reported a net loss of $183 million in the first quarter, and the company's debts rose to $3.3 billion. The main reason is a decline in demand for cars at the top end of the electric car market.

A former senior Lotus executive called the plans to shut down the British company a "disgrace".

Source: Autocar