OCTOBER 22, 2010

Fernandes under pressure to drop Lotus name?

Lotus Racing boss Tony Fernandes appears to be under pressure to drop the Lotus name if he wants to secure his supply of Renault engines.

Lotus Racing terminated its three-year engine supply deal with Cosworth three weeks ago and has already announced a drive train collaboration with Red Bull for 2011. The anticipated confirmation of the Renault engine deal, however, has not been forthcoming.

It appears that industry politics may have lodged a spoke in Fernandes' wheel. It seems that Renault does not wish to supply F1 engines to a company in dispute with a fellow manufacturer - in this case Proton. Fernandes recently had a licence to run as Lotus in F1 from Group Lotus-owning Proton, terminated, prompting his purchase of the rights to Team Lotus from David Hunt, as announced in Singapore. But, judging from the recent PR tennis, is seems that Group Lotus has different racing plans for the Lotus name.

After ending a partnership with VW in 2007, Proton held talks with both Renault and GM in early 2009 about possible future relationships. A Proton spokesman said at the time: "We are discussing how we can explore working together. An alliance is vital. We need to have scale."

Alliances make sense for Proton given that developing a new model can exhaust almost 50% of its cash reserves and it has lost significant ground to both Toyota and Honda in its home market.

To cut reliance on the Malaysian market, Proton is also focusing on the Middle East/China/India/South east Asia and in the next decade is targeting overseas sales accounting for 70% of the total as against 20% now. A political association with Renault to further those aims would not be out of the question, with a deal already in existence for the supply of the 1.2-litre engine from the Twingo/Clio for use in Proton's Savvy.

There are suggestions too, that Renault could even play hardball if Fernandes refuses to drop the name and embarks on a protracted legal wrangle over the rights to Lotus in F1. Should he lose and thereby need a name change, to Air Asia F1 let's say, he would require agreement from his fellow competitors, one of which is obviously Renault...

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