The Lotus name game

We live in a brand conscious age, where clever marketing drives consumer attitudes and spending patterns.  Formula 1 is no stranger to the use of advertising and marketing, with all teams selling advertising space on their cars.  Indeed, Bernie Ecclestone’s marketing machine has made him a billionaire while he massively increasing global interest in Formula 1  since the 1970s, when he took control of the commercial rights to the sport.  Are there, or should there be, some restrictions to what Formula 1 teams can do in terms of advertising?

The answer to this question is clearly yes, as we saw with the end of tobacco advertising on cars early in the new millennium, but what about team names?  Personally, if I see a Ferrari on an F1 track I like knowing that, if I had the money, I could go out and buy a Ferrari road car that bore some relationship to the F1 car I watched on TV.  It’s not just Ferrari, the same point could be made using McLaren or Mercedes and, to a lesser extent, Renault (given their involvement solely as an engine manufacturer).  Of course, there’s Lotus, too…or is there?

At the start of the 2010 season, after a gap of 15 years, the Lotus name made a welcome return to Formula 1 with Tony Fernandes’s Lotus Racing, one of three new teams to be granted a place on the grid at the start of that season.  Fernandes had agreed with Proton, who own Group Lotus, to use the Lotus name under license in F1.  Despite the use of the Lotus name, the 2010 F1 Lotus – the T127 – wasn’t really a Lotus, was it?  The car we watched racing around Formula 1 tracks bore no relationship to Lotus road cars whatsoever.

Things got messier in the 2011 season, with the breakdown of the relationship between Fernandes and Group Lotus.  The latter decided to terminate the licensing agreement with 1Malaysia Racing Team (Fernandes’s Team), and instead sponsor the Renault Team, which became Lotus-Renault.  This deal included an option for Group Lotus to acquire a stake in the Lotus-Renault Team.  Not to be outdone, Fernandes bought the historic and evocative Team Lotus name from the Hunt family and the 1Malaysia Racing Team raced under this banner in 2011.  We now had two Lotus teams on the grid, neither of which had a particularly close link to the Lotus road cars, although the possibility of such a relationship developing clearly existed with the potential part acquisition by Group Lotus of a 50% stake in Lotus-Renault.

Two Lotus teams in F1 could never last for very long, though, and, following a legal dispute, Fernandes eventually sold the Team Lotus name to Genii Capital, the owners of Lotus-Renault, and bought the sportscar manufacturer Caterham.  So in 2012, 1Malaysia Racing Team became the Caterham F1 Team and Lotus-Renault became simply Lotus.  That cleared everything up, right?  We had a Caterham F1 Team that was under the same ownership as its road car namesake and, even though Group Lotus were basically acting as a title sponsor for what was the Renault team (which continues to use Renault engines), a Lotus F1 Team with the potential for a similar relationship to develop in the future.

This situation was not to last long either, though.  Autosport reported on 6 April that the Lotus F1 team had “terminated its title sponsorship deal with sportscar manufacturer Group Lotus”, but that they would continue to use the Lotus name in Formula 1.  Autosport also reported that the option for Group Lotus to buy a 50% stake in the team had been annulled, removing the possibility that the Lotus road car would bear any sort of relationship to the Lotus F1 car.  So, the team will change its name again, right?  Wrong.  Autosport quoted Genii Capital owner Gerard Lopez as saying “We are happy to carry the Lotus name as we believe it is a good name for F1”.  Well, yes, he’s right there it is a good name for F1, but in my view Lotus is more than just a name – it brings with it a rich motorsport heritage and history, one that the current Lotus F1 Team does not share.  To my mind this is a type of false advertising.

You could draw a parallel here with the Infiniti sponsorship of the Red Bull team.  When this was originally announced, there was some speculation that this would lead to the Renault engines that power the Red Bull cars being branded Infiniti.  This didn’t happen, though, with Autosport quoting Infiniti’s senior vice president Andy Palmer as saying, in response to being asked whether Red Bull’s Renault engines would be rebadged “No. Infiniti is all about being genuine – so rebranding an engine would not have been genuine”.  So, there you have it, a huge difference in approach between this and the Lotus situation.

One can only assume that the Lotus F1 Team’s continued use of the Lotus name is under some sort of licensing agreement, similar to the one that 1Malaysia Racing had when it entered the sport in 2010.  Is this right, and should it be allowed?  In my view, it shouldn’t.  The uninformed man in the street would expect the Lotus on the F1 grid to be owned by the same Lotus company that he could buy a road car from; an F1 team shouldn’t be allowed to use a name just because it’s “a good name for F1”.

I’m off out to buy some prancing horse badges to stick on my Ford.  From now on I’ll be telling everyone I drive a Ferrari.  Who could disagree?  It’ll have the right badges…

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