Minister steps in to stop closure of Lotus factory as carmaker says ‘no plans to close the factory’

The factory has been in operation for more than 70 years, and its closure would put 1,300 jobs at risk, in a fresh blow to the UK's motor industry.

But Heely, the owners of Lotus, have now tempered those fears after an intervention from the government.

Reports on Friday suggested the British sports carmaker would halt production after struggling to pay its suppliers in recent weeks.

Production at Lotus’ Hethel plant in Norfolk pause for the last month, as the company cited US trade tariffs imposed by president Trump as a reason for their declining business.

But government officials are understood to have contacted the carmaker after the reports emerged, as Business secretary Jonathan Reynolds is set to meet its bosses for emergency talks on Sunday.

Though government sources emphasised that the future of the Norfolk factory is up to Lotus to decide, the company now seems willing to keep manufacturing in the UK.

Lotus initially declined to comment on reports of the potential factory closure, but insisted on Saturday morning that it had “no plans to close the factory”.

“We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market,” a spokesman said.

“The UK is the heart of the Lotus brand — home to our sports car manufacturing, global design centre, motorsport operations, and Lotus Engineering. It is also our largest commercial market in Europe.

“We have invested significantly in R&D and operations in the UK, over the past six years. Lotus remains committed to the UK, and its customers, employees, dealers, suppliers, as well as its proud British heritage.”

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Chinese company Geely took a 51% stake in Lotus in 2017, with the move being seen as a lifeline for the company after years of losses at the time.

Lotus, which was founded in London in 1966, ceasing production would mark another blow to the UK’s car industry.

Car production hit its lowest levels since 1949 in May after Donald Trump launched a trade war against all vehicles made outside of the US.

In the year to date, production is down by almost 13% on 2024, to 348,226, the lowest since 1953.

The SMMT said the reduction was mainly due to ongoing model changeovers, restructuring and the impact of US tariffs.

A total of 47,723 cars rolled off factory lines last month, while commercial vehicle output was down by more than 50% to 2,087 units.

Car production for export fell by 27.8%, with shipments to the EU and US, the UK’s two largest markets, down by 22.5% and 55.4% respectively.

The SMMT said rapid action on energy costs and an increased ability to access key overseas markets, as well as additional measures to energise domestic demand, could put the UK on course to reclaim its place in the top 15 automotive manufacturing nations, for the first time since 2018.

Mike Hawes, SMMT chief executive, said: “While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future.

“Confirmed trade deals with crucial markets, especially the US and a more positive relationship with the EU, as well as Government strategies on industry and trade that recognise the critical role the sector plays in driving economic growth, should help recovery.

“With rapid implementation, particularly on the energy costs constraining our competitiveness, the UK can deliver the jobs, growth and decarbonisation that is desperately needed.”