Lola on the brink as recession bites
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The appointment of administrators at Lola has brought the future of racing car manufacture in the UK into sharp focus.
The administrators claim they are hopeful that Lola Cars International and its sister company, Lola Composites, can be saved, but should no buyer or buyers be found, the end of Lola would mark the disappearance of the last of the traditional major racing car constructors in the UK. March, Ralt and Reynard all ceased trading during the past two decades.
The company’s move into administration was blamed by Lola, which is owned by Martin Birrane, on the economic downturn and the end of tax relief for research and development, which caused serious cashflow problems. The reality for the company is that it has had a series of lean years. Lola’s racing business has been conined to the sports car market since its last major run of single-seaters for the Jim Russell Racing School at Sears Point in 2008-09. Its bid to build the latest generation IndyCar failed to supplant Dallara as the chassis supplier.
It appeared to have a good winter in 2011-12 when it built 10 LMP chassis and sold nine, and also produced a number of update kits for existing LMP1 and P2 Lolas. The reality is that these sales might not have off-set the development costs of the new package it produced for this season.
Each of the constructors producing cars for last year’s new, cost-capped LMP2 category, which mandates a maximum price of €355,000 for a rolling chassis, privately admits to selling each vehicle at cost, or else at a loss. It then hopes to make its proit on the sale of spare parts over the life of the car.
The one-make singleseater formulae that now proliferate require a similar business model, although other constructors, namely Dallara and Tatuus in Italy, have made a success of building spec cars. Dallara builds the GP2, GP3 and Formula Renault 3.5 cars, while Tatuus has just won back the rights to assemble next year’s Formula Renault 2000 chassis.
It isn’t easy to explain why a company such as Dallara has been a success over the past 10 years while Lola hasn’t. Dallara sales and marketing director Nick Langley is well placed to make a judgment as he was business development boss at Lola until 1999.
“Perhaps there has been an attitude problem at Lola in the Birrane era,” he says. “A successful race car manufacturer needs a strong engineering leader like Gianpaolo Dallara or Adrian Reynard.”
Langley also believes Dallara has outstripped Lola in terms of its facilities.
“When I joined Dallara in ’99 I’d say that Lola was the equal of Dallara, but today I believe it lags behind in terms of wind-tunnels, driver simulation, finite element analysis and rapid prototyping.”
Dallara also operates in a different way to Lola. Although it has a large fabrication shop, it has no labour-intensive composites facility and instead relies on
sub-contractors.
It also has the valuable foundation stone of relationships with large manufacturers. It has an ongoing deal with Audi that has spanned all the German manufacturer’s Le Mans 24 Hours-winning prototypes.
Gary Watkins