Huge British car firm warns of ‘more cost cuts’ days after axing hundreds of jobs over ‘volatile market’
A HUGE British car firm has warned it is being forced to make more cuts, after scrapping hundreds of jobs.
Lotus has blamed the “volatility” caused by Donald Trump‘s trade tariffs for the cuts.
The luxury sports car company announced the cuts despite the fact it has almost doubled sales over the last year.
The motorcar firm recorded 12,134 sales in the 2024 financial year, a 74% increase on the 6970 sales made the previous year.
However, Lotus made just £21.7m in gross profit, a significant decrease on the £76.3 million it made the previous year.
Chief financial officer Daxue Wang blamed the decrease in profits on the impact of worldwide tariffs and “global trade uncertainties.”
He added that Lotus, which will become one company when the sports car division merges with the Chinese electric car division, will be forced to undergo “strategic cost optimisation to improve profitability.”
“As we progress with the acquisition of Lotus UK, we are committed to driving cost streamlining and operational enhancements across all markets to continuously deliver long-term value,” Mr Wang said.
The beginning of these cost-cutting measures was announced last month, when the manufacturer announced that it would be cutting 270 jobs.
The brand promised it was “committed to the UK” despite the cuts, but this has done little to ease fears.
A spokesperson said: “The proposed restructuring is vital to enhance our competitiveness in today’s market.
“Lotus Cars has announced a proposed business restructure to ensure sustainable operations, amid volatile and evolving market conditions including the US tariffs and shifting consumer demand for sports cars.
“The company plans to increase synergies across the wider Lotus brand and with its largest shareholder and technology partner, Geely Holding Group.
“It will look at greater resource sharing and collaboration in technology, engineering, and operations.”
Days after the job cuts were announced, Lotus’ current owner Geely International, triggered a 2023 agreement to force Lotus Technology Inc to buy back 51 per cent of Lotus Advanced Technologies.
Currently Geely owns 51 per cent of Lotus, with the other 49 percent owned by Malaysian group Etika Automotive.
Qingfeng Feng, Senior Vice President of Geely Holding Group and CEO of Group Lotus, said: “This acquisition marks a critical milestone in our strategic journey to fully integrate all businesses under the Lotus brand.
“It will strengthen brand equity and enhance our operational flexibility and internal synergies.
“We are confident that the transaction will create substantial long-term value for our shareholders.”
Donald Trump‘s introduction of 25 percent tariffs on car imports to the US has heaped huge pressure on car brands.
The UK sends one sixth of all of the cars it builds each year to the US.
These include luxe models from car brands such as Aston Martin, Rolls Royce and Land Rover.
Sales to the US amount to about 100,000 a year, with a worth of around £8 billion.
Trump has claimed that the import tax for cars, which came into play on April 2, would lead to “tremendous growth” for the industry.
However, experts say it will likely lead to a temporary shutdown of significant production in the US and strain relations with other countries