Lotus Renault GP

So the announcement has been made that Group Lotus is officially in F1, in partnership with Genii Capital – the owner of the current Renault F1 team – beginning from the start of the 2011 season, and that it will be competing under the Lotus Renault GP name.

Group Lotus’ purchase of all the remaining shares held by Renault in the team makes the former the major equity partner, though Renault remains as the engine supplier, hence the retention of its name in the scheme of things.

The resulting formation of the team is no surprise, but the choice of livery colours might be – the combination of black and gold heralds back to those JPS-sponsored glory days, and is an inspired choice. Only, it’s identical to that chosen by Lotus Racing, which earlier announced that it would be competing in 2011 in black and gold.

To add to the confusion, Lotus Racing (or Team Lotus, if you will) is also being supplied with engines by Renault. So, it remains possible that we could see two teams competing under the Lotus name, both in the same colours, with the same engine supplier, the first of course dependent on how the court decides early next year.

When contacted, 1Malaysia Racing Team’s CEO Riad Asmat had this to say: “We will be called Team Lotus next year and we’re making great progress in the development of our car. We’re focused on what we need to do next year. On them, its truly their choice since they seem to have the means to do it – it’s a huge investment having seen things first-hand over here, but a niggling question remains in my mind though; do we really need another Malaysian-backed team?”

Lotus Racing

Whatever the final outcome may be, Proton’s decision to venture into F1 is purely as a business opportunity to take the Lotus brand to a higher plane, and that because of the historical significance, motorsports was selected as a key communication tool to enhance the brand’s image and awareness as well as helping to support sales of its road cars further afield, something it had planned from 2009 before the ongoing dispute came about.

That was the underlying message that was conveyed during an informal session between Proton’s management and the media earlier today, in which questions about the current situation naturally cropped up.

The point was made that Group Lotus had extremely limited involvement in the Lotus Racing team – there was no management involvement, no technology exchange/contribution or staff exchange. The overview is that the collaboration with Lotus Racing did not bring the desired results – performance wise, while Lotus Racing was unarguably the best of the new teams in the 2010 season, the percentage of overall exposure was considered to be negligible.

Additionally, the reasons for the parting of ways have also been because of breaches – many ongoing – in the licensing agreement with Group Lotus. These include use of the Lotus roundel without consent from Group Lotus, wrongful sub-licensing of the “Lotus Racing” name and trademarks to third parties and selling “Lotus Racing” F1 merchandise excluded by the agreement.

Further breaches are in using the word “Lotus” in conjunction with “Team” on LR’s website and in marketing materials, the use of the Lotus Roundel and the word “Lotus” on its own on its premises, promotional materials and clothing without GL’s consent and the use of “Lotus Racing” outside the sphere of Formula 1, in British Formula 3 and Formula Renault.

Renault F1

And yes, seeking to obtain the right to use the name Team Lotus with the intention of using the name in the 2011 F1 season in contravention of the ‘Lotus Racing’ licence agreement contractually is part of it too.

Enough reminders were given to LR, with a final reminder issued on August 31 demanding full remedy/ rectification of these breaches, failing which termination would ensue. Instead of compliance, 1Malaysia Racing Team confirmed the termination of the licensing agreement. In essence, Lotus Racing invariably agreed to an end to things.

While the effects brought about by the dispute will definitely linger, Group Lotus is looking to move forward with its own F1 plans. It will provide Lotus access to a global branding platform that can showcase the brand’s engineering talent and ultimately, transform Lotus. Then there’s the access to technological advances that can be potentially incorporated into new Lotus vehicles. It’s all part of a big plan to bring Lotus to higher levels. Lotus in its current form has been unprofitable – so it seems it’s time for a new plan, a gamble no doubt, but the Lotus board members seem to be convinced by Dany Bahar’s turnaround plan.

In addition to this, it seems the deal with Genii also offers Proton the ability to leverage on its existing business relationships in Russia and other parts of the world, as a means to expand Proton’s global reach. It’ll be interesting to watch that unfold.

So, while this one will run and run, at least some facts are on the table. The battle of the Lotuses has just properly begun, and this should definitely prove intriguing.