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Lotus reversed plans to end car production in the UK after the government was willing to provide support to the struggling British sports car brand.
In a statement on Saturday, Lotus, managed by Chinese automaker Geely, said it is “actively investigating strategic options” to improve its operations and efficiency of global competitiveness.
“Lotus vehicles are ongoing normal operation and there are no plans to close the factory,” it said.
The Financial Times reported Friday that the company plans to halt production at its Heter plant in Norfolk, putting 1,300 jobs at risk.
Knowing about the situation, the two said that British government officials contacted executives of Lotus and Geely shortly after the report was released. “Everyone was in panic,” one of the people said.
UK Business Secretary Jonathan Reynolds is expected to speak to Lotus on Sunday, one person nearby said.
A government spokesman said: “The government has not commented on private companies’ speculations or business practices.”
Geely declined to comment.
The closure of the Heter plant would have taken a new blow to British car production, following the closures by Honda and Ford over the past decade.
To increase the number of Prime Minister Kiel Kiel’s Prime Minister of Automobiles and other advanced manufacturing, he has pledged to reduce high energy costs as part of the labour government’s recently announced industrial strategy.
On Friday, Lotus said it had suspended production in the UK since mid-May, halting US tariffs after halting shipments to the US after managing supply chain issues related to inventory and US tariffs.
But people with debate knowledge said the company has struggled to pay its suppliers in recent weeks, struggling with declining demand for the vehicle and increasing inventory. This puts pressure on both Heter plant in the UK and Jiri-owned factories in Uhan, China, to manufacture Lotus vehicles.
“They face deeper problems than the US tariff issues,” said one person close to the company.
Lotus did not respond immediately to FT requests for comments.
Feng Qingfeng, US-registered Lotus Technology CEO, which holds control of UK operations, told senior executives earlier this week to create a proposal to withdraw manufacturing in the UK. He also told investors that Lotus wanted to localize production in the US.
Lotus has cut jobs in recent years, but many senior executives have left, including Europe’s chief dumbalmer and chief executive Mike Johnstone.
In the three months ending June, Lotus Technology reported an operating loss of $133.3 million, a 42% reduction in 1,274 vehicles compared to a loss of $233 million the previous year.
Founded in 1966, the Heter plant has an annual capacity of around 10,000 cars, and the Uhan plant can produce around 150,000 cars.
