Used Car Business Development

What Now For Lotus?,,,,,,,,,,,,,, 

Well the new owners of Lotus have certainly got plans to shake up their retailing model, having (according to a recent article by Autocar Business) slimmed down their retail network and having confirmed their intentions to divert to an Agency Model for new and used car retailing. 

Now in principal I am in no doubt that this is the correct strategic business development decision to take moving forward. I have been advocating this for years in my articles, especially when it comes to developing used car retailing, via a strategy of locking future used car vehicle parks into returning to successful used car retailing networks. 

If delivered upon, this is a bold move by Lotus and one I applaud. It is important to remember that if you want to control access to your used car market, (with all the retailing benefits that will deliver) you must control access to the associated used car stock required; in fact all manufacturers should take note, but won’t of course! From what I can read in the statement, this is exactly what Lotus are endeavouring to achieve; so why do I have my doubts? 

Well the clues are there in the quotes from Lotus and their senior personnel, those contained within the article; evidence of an apparent disconnect between what Lotus think their customers want and what the customers actually do. Nowhere in the statement appeared to be an acknowledgement of how customers purchasing their product interact with information sources, the physical product itself and trusted sales professionals, during the purchasing process. 

Lotus quote the success of Nio(?) in their statement (a Chinese manufacturer of electric vehicles) and actually say in their statement that “The standard is ultimately, of course, the Apple Store.” Now I fear for Lotus if these organisations are their examples and business templates, because the analogies and comparisons are not appropriate/bordering on delusional. As much as we all have things to learn from each other, what we are learning must be relevant to our core business model and customers. I’m left wondering where the similarities are between the purchasers of electric cars manufactured in China and/or IPhones and those purchasing niche, specialist high performance sports cars? 

From their statement (and I might be wrong) Lotus appear to be banking their success all on technology (sigh – not again) to drive the sales process. Now I add the caveat that I wasn’t present at any of the strategy meetings but having presented complex business development and retailing strategies to manufacturers for years, I am not surprised and sense that Lotus will be the next manufacturer to fully embrace technology, in the belief that it can deliver them the retailing Nirvana desired. 

Unfortunately this will not happen; well not without the professionals required to leverage the advantages that technology can deliver, with the “Excellence in Execution” sales environment the product requires to remain successful. On the face of it this could be another example of thinking shaped during the pandemic (a trading environment we are unlikely to see again); one where manufacturers appear to have become convinced that technology is the new Super Weapon for successful retailing; well it isn’t. 

For sure technology has transformed some retailing markets, the FMCG market for example, but specialist high performance sports car are not an FMCG product; far from it. Lotus is a very niche, low volume, specialist high performance car and in this market, technology platforms are nothing more than an (albeit very important) information resource. That required by busy successful professionals to explore purchasing options within their chosen market, before then reaching out for further advice when they are ready. During this customer exploration process Lotus will need the very best sales professionals available; those capable of recognising, nurturing and developing electronic engagement to - first contact - to sales; via everything that transpires in between. All of which will be nuanced to every customer enquiry. 

Unfortunately no reference is made to the investment in the professionals required to achieve their aims and this leaves me worried for Lotus, along with their retail ambitions. Lotus should be in no doubt how their market works. Any customer they attract will be hard won; customers purchasing in this market (both new and used cars) tend to be a highly knowledgeable lot, who will look at all manufacturers within the market. 

This will be will where the challenges begin for Lotus because these customers are spoilt for choice and can choose from a veritable “Garden of Eden” of product. Lotus really are going “Toe to Toe” with some serious manufacturers in this market and the notion that sales in this market can be driven from technology based, direct to the manufacturer platforms, (as with Apple) is “For The Birds!” 

Then we come to the used car ambitions; now credit where credit is due, if aligned to the genuinely successful used car professionals required, Lotus are ahead of many of their competitors when it comes to delivering on their used car retailing ambitions moving forward. To add context I will quote the article directly; 

“There’s another angle, too. “It’s not just about selling new cars, it’s trade-ins too. They will control the second-hand car market for five years,” Nima Khandan Nia, owner of Lotus Silverstone, told Autocar. 

Newer cars traded in belong to Lotus, which means they can set the prices, theoretically giving them control of residual values. “Usually trade-ins will be another Lotus. Lotus will then distribute that car internally and control the price,” added Khandan Nia. “It’s a clever mechanism to control the brand for a good five or six years.” 

Now currently used car strategies like this are relatively unheard of and be in no doubt that this is the way ahead of the curve, when compared to other manufacturers operating in niche, specialist and high performance markets; however there are some caveats! Now I’m not here to give Lotus all the answers for free, but to deliver on this ambition Lotus are going to have to secured the genuinely successful and experienced used car strategic thinkers and talent required; those without which Lotus will not succeed! 

To add context, and for fairness, I decided to research LinkedIn to see if the professionals required appear to be in situ at Lotus; sadly it would appear not. The individual quoted above Nima Khandan Nia doesn’t have a profile that I can find and is not listed on the LinkedIn company page for the business he apparently owns; Lotus Silverstone. That is not to say, of course, that he chooses not to be on a platform for business professionals; this would be highly unusual though in this day-and-age! 

Looking at Lotus themselves and looking for personnel with the relevant experience and responsibility for the used car ambitions of Lotus; again there appears to be no one in seniority listed on the company page for Lotus themselves. I’m sure that if they existed and Lotus appreciated the importance of the expertise they could deliver, they would be very high profile and probably quoted in the article. 

This leads me to believe that Lotus (like all manufacturers) are bereft of employees with the genuine used car experience required to build the business environment necessary for successful used car retailing to be delivered. I hope I’m wrong but with no big statements surrounding the professionals required for their Agency Model ambitions to succeed, I have a fear that the most important element is missing; the right people! 

Relations between manufacturers and franchise partners has always been a delicate one, blending different skills and personalities in a single business aim. In all my years working with manufacturers, (constructing and delivering used car business development strategies), I have never met a successful used car professional working within a manufacturer’s organisation; nor many who have any success of retailing and building successful new or used car retailing businesses! If Lotus fall into this category then the business ramifications could be serious to existential. 

In finishing, those who follow my Used Car Business Development Blog, know that I am prone to an analogy; so what to say to the board of Lotus. Well firstly I hope I’m wrong because Lotus appear to be doing so much right, in terms of the strategic retailing decisions moving forward. 

But in truth they remind me of the football team I support and its owners; Tottenham Hotspur. The owners of which have invested so much in the club, the training facilities and a new state of the art stadium; but they have forgotten to invest in the most critical component; the team. The players to do it all justice and deliver the results required! 

Anyone of my connections involved in this project for Lotus can feel free to contact me should they have any questions surrounding this article; especially the used car business development strategies required for success.