Caterham gets a sporting chance at acceleration

Focus on Caterham Cars, which airline boss Tony Fernandes bought last month.

The purchase of Caterham Cars by Tony Fernandes could mark a major move from small producer of two-seater sports cars to a mass market manufacturer.

Profile: Asia's 'Richard Branson' aka Tony Fernandes a high-flyer

Last Updated: May 13, 2011

Industry Insights After conquering the skies over Asia with his budget airline, Tony Fernandes has set his sights on the automotive world. Bradley Hope meets a man with the need for speed.

The company began as a dealer of the Lotus 7 in the UK in the 1960s. In 1973, the founder of Caterham, Graham Nearn, bought the rights to build the cars after Lotus Cars ceased production.

Today, the company's only model is the Caterham 7, the latest version of the Series 3 Caterham 7 launched in 1968. The cars are made from sheet aluminiumover a tubular steel chassis.

They can be bought in kit form to be home built or ready-made, and are traditionally beloved by middle aged men trying to recapture their youth.

Now, under the ownership of Mr Fernandes, who founded the budget airline AirAsia, a range of new models could be on the cards. There is even talk of an electric model.

"I've given them some ideas," Mr Fernandes said. "But I'm not the type of person who says that I'm bringing out five new models. I'd rather let actions speak more than words."

He said the purchase of Caterham last month was as exciting for him as when he bought the rights to AirAsia in 2001.

"Many people like a sports car," he said.

"But they can't afford the Porsches and Ferraris.

"We think we can try to develop some two-seater affordable sports cars with some Formula 1 technology but are more affordable. "We all like a bit of speed," he said, adding he saw the UAE as a strong market for such cars.

There was also an opportunity to create a product for the "electric affordable" car niche.

Mr Fernandes, who is also the Lotus F1 team principal, owns a Tesla electric sports car, which he loves, but admits the make is very expensive. A 2010 Roadster retails at £86,950 (Dh521,635).

The purchase price of Caterham was in the range of £20 million, according to a source close to the transaction who wished to remain anonymous.

Mr Fernandes would not disclose how much he was planning to invest in the company, but said he was "extremely excited" about working with the company.

"I see Caterham as a diamond in the rough," he said.

"It's a fantastic brand and has a fantastic following, but a very small following. We're going to broaden that."