Wednesday, August 30, 2017


THE SCENE: The Fiat Chrysler Automobiles Boardroom.
THE PLAYERS: Head cowboy Sergio Marchionne, and assorted serfs in suits with grand titles, like VP of Money; VP of Selling; VP of Spin; VP of ‘Folks’.

AGENDA ITEM ONE: Great Wall’s rumoured offer to take Jeep of our hands

CHAIRMAN’S REACTION: Shock, horror! Would we sell Jeep to some two-bit Chinese company? Definitely not!

CHAIRMAN’S INSTRUCTION TO VP of SPIN: Write a press release saying we haven't heard from Great Wall, and we  reject the idea anyway!

Well, Sergio, that certainly was the right response, because it doesn’t matter how much FCA would make by selling Jeep. Because without Jeep you got nuthin’. Zero, nada, no hope!

Also, despite the fact Great Wall Motors has been successful with its SUVs and pickups, by global standards it’s still a minnow.
It simply doesn’t have the financial might to buy a property like Jeep, at least not without humungous borrowings. Great Wall's market capitalization might be only USD$16 billion; and the rumoured value of Jeep is USD$26 billion. That’s quite a gap, if it were taken up with debt.

Great Wall Motors got out of the blocks pretty smartly, its SUVs and pickups made great initial inroads into many global markets, and both Chairman We Jianjun (left) and President Wang Fengyin (right) were very impressed with their early results.

Trouble is, the rest of the market has grown hugely in terms of availability of a much wider range of SUVs, and Great Wall is now battling to stay relevant.

There are other things to consider: In the current climate in Trump-led America, it is highly unlikely President Trump would allow an American icon like Jeep to be acquired by a Chinese company!

It is also unlikely that GWM ever made a formal approach to FCA, because regulatory requirements for public companies in the USA demand that the company (FCA) disclose any approach, to its shareholders.

In addition there’s the technical and, culture shock, of integrating the two corporations; the differences in technologies; and the lack of technological skills of a Great Wall parent!; and product planning. All issues challenging a viable future of the entity.

Nope. It won’t happen.

As I have written before, the American analysts who are hyping up the value to FCA of selling off Jeep and Ram seem to be completely ignorant of the fact that what’s left – Chrysler, Dodge, Fiat, and the premium Maserati and Alfa Romeo brands are worth, precisely, nothing!

Certainly nowhere near enough to pay down FCA's net debt level, which remains around USD$6 billion. And, forget about all the pr releases that say Jeep is selling in big numbers. They may be, but an internal source at FCA (USA) tells me that their marketing costs and dealer bonus payments per vehicle to move the products are huge, which really just offsets whatever small profit there was.

Sergio may have invested USD$5 billion to create Alfa Romeo as a premium brand; but FCA will NEVER get a return on that investment. Not only because the profit margins are small, but industry sources in the USA tell me the new Alfa Romeo Giulia is absolutely plagued with massive electrical problems. 
Only 2,482 Giulias have been sold in the USA in 2017, and most of those were the potent Quadrifoglio model. The base cars are getting no traction in America, and I hear from friends who are very well-plugged into this level of the global automotive industry, that Maserati and Alfa Romeo are actively being hawked around.

Apparently, a couple of Chinese companies have shown some interest in Maserati - so interested parties should drop Sergio a line.

However, even if Maserati and Alfa Romeo were sold, that highlights the value of the remainder - not much.

(stock photo - reactions genuine)

Also, keep in mind Sergio Marchionne has told the FCA Board that his ‘new plan’ for the future of FCA must be finalized before he retires as Chairman by end of 2018. Good luck with that then.

FCA as automotive road kill? It’s looking more likely as each month passes.

Tuesday, August 29, 2017


Take the basic A3 package; add a 2.5L five-cylinder all-aluminium engine, and what you end up with is an $85 grand sports sedan that could frighten competitors with supposedly bigger kahunas.

Or, at least bigger pricetags.

And yes, the RS3’s bark is as big as its bite.

This is one impressive performance package, with threads of the Audi TT RS’s DNA running through its genetic breeding.

The RS 3 concoction - Rapid & Sweet

There are some visual cues too, like the slightly muscular fender flares; side skirts and a sliver of carbon fibre for the trunklid spoiler. And, of course, those massive megaphones which the RS3 uses to bark its way into the conversation.

But, it’s no ‘stick-on badge’ exercise either. The RS moniker is only applied to Audis which come with the sort of performance integrity you’d expect of a company which has won the 24 Hours of Le Mans so many times, it gets to keep a permanent trophy in the display case at Ingolstadt.

Having blasted off in the RS3 hatch (Driving & Life, December 2015) and decided it's a racer in street clothes, could there be more to the sedan I didn’t already know?

You bet! Not only is the engine lighter, but it also gets plasma-coated cylinders, changes to valve timing, and the turbocharger, so consequently it pumps out an extra 24kW.

Then of course there's Quattro AWD, for very grippy handling.

Transmission is a 7-speed Twin Clutch, but it features a faster-acting electro-hydraulic multi-plate clutch for snappier gear changes.

On that note – don’t forget to mention the exhaust note, JC. 

Oh yes, there are steering wheel paddles, but your first introduction to the RS3’s seductive appeal should be on a long straight road in the middle of nowhere; floor the throttle; leave the transmission in auto; wind down both front windows and wait for the ‘bark’ as the DSG box shifts up. It’s a magnificent sound, which could become addictive.

Like I said this is a seriously good performance sedan, and it's priced very competitively. 

Independent road-testing tells us it’s faster than both the Mercedes-Benz AMG CLA 45 sedan, and the BMW M2 coupe – and they cost a lot more too!

The RS3 is loaded with all the tech you expect (too much to list, but take it from me, it’s loaded); and you get Apple CarPlay, and for even more money getting sucked out of your bank account, there’s the Bang and Olufsen audio system.

I really enjoyed this car. It seems to be a better-balanced handler than the RS3 hatch, although there’s no difference in the wheelbase and track – however I think it’s the way the mass of the three boxes are spread across the 4.3m long sedan. My only regret is that Audi should have painted the car a 'colour' instead of leaving it in 'Primer Gray'.
COLOR POSTRSCRIPT: On checking the spec sheet, the color is listed as 'Nardo Gray' - that is Nardo, after the high speed test track in Italy. Methinks that was Nardo on a dull, gray, rainy day in December.

Audi pines to be perceived as the equal of its two major German competitors, but somehow it always seems to trundle along in third place on the sales charts.

However, believe me, there are no real shortcomings in a direct comparison between Audi, BMW and Mercedes-Benz. The difference is that BMW has fostered a very strong brand image for decades, and just recently Mercedes-Benz has discovered how to ‘buy’ market share, by very competitive 'trading'.

This leaves Audi as the poor old number three, when there’s no reason it should be. The RS3 sedan has got the goods; and the ‘go’ and as for image, remember Audi's perpetual Le Mans trophy in the display case.

Sunday, August 27, 2017


There are plenty of stories in the car industry of designs which died on the vine, and never saw the light of day – much less a production line.

Part of the Lotus Cars history involves a car, which never proceeded beyond a single running prototype. It was given the codename the M90, later renamed X100.

The car, intended as a low price, entry model into the Lotus family, was referred to internally as the ‘new’ Elan.
The iconic Lotus Elan 1962-1971

However, Lotus founder and principal, Colin Chapman (left), was very cool on the whole concept.

At the time of the early discussions, Lotus was earning significantly improved profit margins from its Elite, Eclat and Esprit models, and it was Chapman’s opinion that despite a reasonably robust business case put forward by MD Mike Kimberley and Marketing Director, Roger Putnam, he was not convinced the investment would reap a high enough return on investment.

Lotus’s ongoing financial position could perhaps more accurately be called a ‘predicament’, because despite Chapman’s engineering brilliance, Lotus was always sailing close to the wind, and a major slowdown in any of its markets always had a severe knock-on effect to its profitability.

All of the company’s early success, and its image, had really been formed by Chapman’s original marketing proposition – that customers bought their cars in kit form, and handled the build themselves.

Elite and Esprit had allowed Lotus to move significantly away from this image, and was something both Chapman and Kimberley wanted to accelerate.

If customers had expected an entry-level Lotus to be sold in kit form, that was not an option as kit cars had been killed off by recent Government tax changes. Colin Chapman made a rather caustic observation, at the time, quoted by Mike to me recently. Chapman had said: “Making higher volumes of less expensive entry-level Lotus cars meant that we would be ‘Busy fools'."

Top: Oliver Winterbottom and Mike Kimberley
Bottom: M90 review - Colin Spooner, Roger Putnam, Mike Kimberley, Colin Chapman, Oliver Winterbottom
In 1978 Kimberley and Putnam managed to get Chapman to agree to the build of a prototype, but it took the return to Lotus of designer Oliver Winterbottom in 1981 for the first model to be developed.

Winterbottom’s first drawing was a coupe, which was not well received initially, as the Lotus Board thought it looked too much like a Porsche 928.

However, a clay model was built and several studio review meetings were held with Chapman, who according to Kimberley, remained lukewarm.

Chapman’s death in 1982 meant the program effectively stalled, and it wasn’t until 1984 that the one and only M90 convertible was created.

It was intended to be a full, running prototype, using the very latest all new Toyota all-aluminum twin cam engine, plus all the latest TMC running gear.

So, as the project received more internal stimulus, Winterbottom redesigned the prototype to use the Toyota 4A-GE 1.6L all-alloy twin-cam engine, which had benefited from the technology agreement between Lotus and Toyota, initiated by Mike Kimberley.

My own connection with this car was distant, and very loose, but real nonetheless.

As PR Director for Jaguar Rover Australia, I worked directly for the company’s Deputy Managing Director, Jack Heaven.

Jack was an astute businessman, and one of his responsibilities at the time, was to identify vehicles from around the automotive world, which JRA could build up from CKD kits, in order to utilize spare assembly capacity at the company’s sole remaining assembly facility in suburban Sydney.

Jack Heaven
One day in 1984, after a product planning meeting, Jack Heaven told me that during his most recent trip to the UK to try and find candidates for CKD assembly, he had heard about a new low-priced, entry-level Lotus sports car, which Autocar had reported would be the ‘new Elan’.

Jack Heaven decided this would be an ideal car for assembly, given Lotus’s experience in designing its early cars as ‘kits’, and he assumed that given this engineering approach, it would be no problem to import kits from Lotus and build them as a viable, and profitable, contract assembly job.

We worked on a proposal, which Jack sent immediately to Mike Kimberley, confident that with all the ‘I’s dotted and ‘T’s crossed, the reply would be favourable.

However, when the reply from Lotus finally arrived the project stopped right there. According to Jack Heaven, Kimberley’s response included ridiculously high kit pricing, unrealistic quality control measures, and equally unrealistic volume expectations. Nice idea, but no dice!

Mike Kimberley tells me now that he was very cool on the whole idea from the beginning, because Lotus was trying to distance itself from its former ‘kit car’ image, and in reality it would have little or no control over the quality of the finished cars, which could well damage the Lotus name.

Although no copies of the response now exist, Mike Kimberley told me recently that all the demands he made in the reply were intended to completely stop JRA’s plans to introduce the M90 as a CKD project.

And, here was me, making plans for my new company car to be a Lotus convertible.

The only M90 prototype was ‘mothballed’ in a shed at the Lotus factory at Hethel, due mainly to a misunderstanding between the Chairman of Toyota, and the Chairman of General Motors.

Apparently, at the time (1986) GM was about to acquire all of Lotus (including Toyota's 22%); but GM Chair Roger Smith did not formally disclose this to Mr. Toyoda (his partner in NUMI) as the deal progressed to finality.

Mr. Toyoda was so upset that his 'friend' Roger Smith had not revealed his plans, that although Toyota sold its stake to GM, Toyota only maintained supply of components to Lotus which had actually been contracted. This meant that all the components to bring M90 to market, would never be supplied. 

In 1988 it was sold with a batch of other stillborn Lotus prototypes by Coys at an onsite auction. The M90 was acquired by an American who shipped the car to Texas, and the last heard of the prototype was that the new owner was searching for enough parts to make it a runner.

Oliver Winterbottom
Oliver Winterbottom published a book called “A Life in Car Design”, which includes all the intimate details of the M90 project from start to finish.

That is, with the exception of my own plans for a new Lotus as my company car.

Saturday, August 26, 2017


A proper ‘car guy’, maybe you have never heard of, but Mike Kimberley was a car nut from the day he was born, in a small house across the road from the Jaguar works, in Brown’s Lane, Allesley.

Given the geography, it’s not surprising he became a Jaguar apprentice in 1953.

Working his way up the ranks, he was the senior Jaguar engineer leading the development of the nascent Le Mans racecar, the XJ13, in 1965.

He joined Lotus in 1969 – and began work on the project he remembers most fondly, the Lotus Europa Twin Cam.
In 1970, Colin Chapman himself asked him to lead the project.

The Europa went into production in 13 months. As the first production cars rolled off the line, Chapman called him into his office and handed him an envelope, and said 'Well done'.

Kimberley recounts: "Inside the envelope was 500 shares, Lotus was a public company then. I guess I never looked back from that point. I became Chief Engineer in 1974, and then Engineering Director in 1975, so I achieved my ambition from my teenage years.”

"I guess I came up the hard way, and did almost everything there is from welding to machining, to panel beating, to trimming, to designing, building and designing engines and gearboxes."

In 1976 Mike Kimberley was booted further up the ladder to Operations Director. Mike topped out as Managing Director of Lotus Cars in 1977.

Later in 1977 Colin Chapman and Mike Kimberley decided that the £6 million investments in new technology, production improvements and new models over the previous five years was sufficient to warrant the restructuring and re-introduction of Lotus Engineering – a consultancy similar to Porsche AG’s very successful consultancy division.

Lotus Engineering went on to create a gilt-edged reputation for not only utilising its expertise on Lotus models, but over the years has also developed specific models for a range of companies including Dodge, Ford, General Motors, Isuzu, Vauxhall, Aston Martin and Hyundai. One project however, stands out to me. The Lotus Cortina.

Kimberley and Chapman were a well-matched 'dynamic duo'.
Mike Kimberley's astute business sense, combined with his disciplined engineering approach, was a perfect foil for the mercurial Chapman, best described as a maverick, but brilliantly innovative.

Chapman's restless sense of curiosity drove him to solutions that in many cases were totally unique, and way out of left field - and he inspired hundreds of young, up and coming British automotive engineers in both race teams and car companies.

Kimberley’s first job at Lotus Engineering was the Lotus-Sunbeam project, taking the humble Talbot Sunbeam hatch, and creating the fire-breathing basis for a very successful rally car, using the Lotus-developed 2.2L dry sump twin-cam engine. In 1978 Mike set up the 'life-saving' technology agreement between Lotus and Toyota.

In 1981 the Talbot Lotus Sunbeam won the Manufacturers' title in the Rally Championship.

Colin Chapman died from a heart attack in 1982, and Mike Kimberley was appointed Group Chief Executive, working with Toyota, which enabled Lotus to survive the next 6 months and then ensuring a small recapitalisation  and stabilisation of the company in July ’83.
However, in 1986 General Motors took a controlling interest in Lotus Group.

In 1991 GM Chairman Jack Smith asked Kimberley to take on the job as Executive VP for GM Overseas Corporation. In 1982, GM had virtually withdrawn from Asia, but wanted to re-establish its operations in the region. Kimberely moved to Asia, with a small team of nine hand-picked executives, and was the architect of GM’s successful re-integration.

Then, in 1994, Tommy Suharto offered him the top job at Lamborghini, and he moved to Italy. However, after just two years, splitting his time between Jakarta and Sant'agata, a tropical disease caused his early retirement and he returned to England.

While working in India in 2005, for Tata Motors, he was asked by the new owner of Lotus, Proton Group of Malaysia, to return to Lotus, this time as acting CEO. After identifying over 120 process problems which needed attention, and new revenue-earning opportunities, including rebuilding the activities of Lotus Engineering he was appointed fulltime CEO, and went on to turn an £11 million loss, into a £2 million operating profit.

However, in 2009, a broken back caused by a fall on an icy carpark, demanded once again that he retire. Proton Group paid huge tributes for his service to Group Lotus, focusing on his dedicated and tireless efforts to bring the new Lotus Evora to market, as the first all-new, standard-setting car, in 13 years.

Mike Kimberley is very, very highly regarded among car engineers, car company CEOs, and the automotive media as ‘the engineers’ engineer’.

His grasp of both technical and financial issues is a complete package. He may take on the appearance of a British banker in his pinstriped suit, but this is a man who knows both cars, and more importantly, the business of cars.

What a great guy to sit down with for afternoon tea, and talk about ‘cars and car stuff’.