F1: Dr Mahathir Wades Into Lotus Racing v Proton

♠ Posted by Emmanuel in , at 10/02/2010 05:52:00 PM
And now for another weekend feature. Former Malaysian Prime Minister Mahathir Mohamad should be no stranger to IPE Zone followers. One of the most outspoken Asian leaders of recent decades, he has long championed regional solidarity--and I must give him props for that. He's also the brains behind several Malaysian vanity projects to show it has arrived on the world stage. Among others, these include the Petronas Towers--for a long time the world's tallest building--and the Sepang F1 racetrack designed by Hermann Tilke that has hosted the Malaysian GP since 1999. (I went to the inaugural race won by Ferrari's Eddie Irvine after Michael Schumacher let him through, but that's another story.)

It should be obvious that Mahathir is something of a car buff. However, not all his auto-related projects have been as successful as hosting the grand prix. Take Proton (please). This would-be national champion has been haemorrhaging lots of government funds due to its continuing inability to, well, complete with Japanese and Korean makes. I've written about Proton before, and with Chinese makes like Chery reaching Malaysia as well, the competition isn't getting any easier in the exceedingly competitive auto market.

Thus, some may be surprised that Proton has owned the rights to the venerable British sports car maker Lotus since 1996. As car buffs and racing fans know, Lotus is a storied marque in Formula One, having won seven constructor's championships between 1963 and 1978. In recent years, Lotus had encountered much leaner times--especially those under GM ownership. However a renaissance of sorts occurred a year ago when it was announced that the Lotus name would return to the world's premier racing series in 2010. With implicit state backing and having top-class, race-winning drivers Jarno Trulli and Heikki Kovalainen signed on, expectations were high for this Malaysian-led comeback.

However, things have not quite turned out that way. Lotus still has zero points this season. It recently terminated its engine deal with Cosworth over these decidedly unpromising results. And now we get news that there is an quarrel between principals of the F1 team and the supposed name holders Proton. It's a quarrel over who holds the rights to the name. Like in the good ol' days, Dr. Mahathir has waded into the fray. Perhaps the prospect of ruining Malaysian racing involvement as well as the comeback of Lotus didn't sit well with the former PM:
Lotus Racing [the F1 team] has agreed to conduct the rest of its dispute with Group Lotus [owned by Proton] over the rights to the ‘Team Lotus’ name behind close doors after the former Malaysian prime minister stepped in to diffuse the row. An increasingly bitter public slanging match between Lotus Racing and Proton broke out earlier this week after the Malaysian carmaker – which owns Group Lotus and licensed the ‘Lotus’ name to Tony Fernandes's F1 squad before opting to terminate the deal for 2011 – made it clear it would block Fernandes’s bid to rebrand his outfit as 'Team Lotus' next season.

Lotus F1 issued a lengthy rebuttal in which it argued that it now owned the rights to the ‘Team Lotus’ brand and would prove that was the case in the High Court. With the argument threatening to degenerate further, Lotus Racing on Thursday revealed its deputy team boss Dato’ Kamarudin Meranun had met with Proton adviser Mahathir – Malaysia’s prime minister from 1981-2003 and who oversaw the creation of the state-backed manufacturer – to air its grievances and work out a way forward for the dispute.

Lotus Racing remains adamant that it is “acting within its own rights” in planning to run as ‘Team Lotus’ in F1 but, having taken advice from the ex-prime minister, it has agreed to refrain from any more public comment on the issue until the matter is resolved. “Lotus Racing believes it is acting within its own rights, and as a result of this meeting, the team will now refrain from making any further comments on the matter,” Lotus’s statement read.

“This action is upon advice from Tun Dr Mahathir, and it is out of our respect for him that we will act upon his wishes as he has supported us since our inception, and his backing has been invaluable in our growth...We are very grateful for having had the opportunity to put forth our case and have complete trust that a fair review will be made, and a decision on the matter will be announced in due course.”

The dispute between the two sides has had potentially damaging consequences for the Malaysian government, given both receive some level of state support and backing. Mahathir played a key role in promoting motorsport in Malaysia and securing the country’s first grand prix, and also opened Lotus Racing’s new Norfolk factory in February.
In essence, the government bankrolls both Lotus Racing and Proton. However, the latter's principals have supposedly decided to not renew rights for the former to use the Lotus name for the 2011 season. Tony Fernandes of the F1 squad is claiming that it has purchased the rights to use the name nonetheless. Meanwhile, Lotus(-Proton) is introducing a whole raft of new models, making some believe that it wants to get into motorsports itself. So there--Mahathir has been called in to mediate this conflict in the meantime.

It's interesting how this "former" PM still weighs in heavily on such matters. I guess he's like Lee Kuan Yew--Dr M cannot help coming on strong if he thinks it's necessary.