So Team Lotus have bought Caterham, but what is the story behind the acquisition of the name? At any rate, it is a story that is rich in tradition and sums up what British motor racing is all about.

In other European countries, the name of Caterham Cars Limited may be familiar only to aficionados, but for Her Majesty's subjects, it represents the epitome of traditional British motorsport. The UK-based constructor has produced just one single model for as far back as anyone can remember: the Lotus Seven designed by the company's legendary founder back in 1957. The rights to the sports car were bought by Caterham in 1973 when Lotus itself was being wound up, thereby ensuring the continuation of this British engineering classic. Traditionalists thank them to this day.

A perennial favourite in the British club racing scene, the car has been offered by the company in various incarnations over the years with an almost bewildering sequence of engines, yet the core of the design has always remained the same. This policy has helped to make the car a fixture in the national racing scene, because by virtue of its uniform design, the car was predestined for competition with others from the same stable. That's why there are numerous race series in which competitors line up exclusively in Lotus Sevens: around the world, there are still well over a thousand of them actively engaged in competition.

Until 1987, the headquarters of this illustrious company were to be found in the town of Caterham in southern England. In the late 1980s, the owners were tempted by better economic prospects to move production to a new factory in Dartford to the east of London. But as far as the car itself was concerned, Caterham remained true to their principles. Since production started in the 1950s, the light-weight sports car has been sold by Caterham, and with the demise of Lotus, they also became the exclusive constructors.

In 2005, after 40 years at the helm, the Nearn family sold their controlling interest in the company. The new management undertook probably the most drastic remodelling since Series 4 of the Lotus Seven to release the CSR. The CSR frame is longer and wider and has completely fresh styling. In addition, the CSR has independent suspension all round plus Formula One-style internal suspension at the front. The engine is supplied by Cosworth – a 2.3-litre Ford Duratec packing either 200 or 260 horsepower.

The car has been exported to many countries around the world. Fans laud the Seven for its massive efficiency and excellent weight-to-performance ratio. This has contributed significantly to building the legend, because for many years, the Seven has found itself in the company of other larger and more powerful cars in being excluded by the FIA and other governing bodies from various motor racing competitions that are otherwise open to all entries. The official reason: "Too fast!" So as far as Tony Fernandes is concerned, this sounds like a good investment.

"Caterham has a unique place at the heart of the motoring world," said the 46-year-old Malaysian tycoon, clearly delighted with his new purchase. "As well as being proudly and staunchly British, it has an enviable and uniquely unblemished reputation within the industry for performance, handling and engineering excellence. Caterham Cars has remained wholly faithful to Colin Chapman's philosophy of 'less is more', and the DNA of the original Seven can still be traced to the newest additions to Caterham's product offering. It is already a successful business with sales across Europe, Japan, Australia and the Middle East, and under the guidance of the existing management team, we now have all the ingredients and the launch pad to further evolve that spirit and take Caterham to new exciting horizons with innovative products and greater global brand exposure."

Even though there has so far been no official statement about a possible change to the name of the Formula One team stemming from the deal, expectations are high that, in establishing a distinct identity for the marque, Caterham could be a sensible alternative to Team Lotus. As regards the name dispute with Lotus Renault GP, a resolution is not even in sight. The purchase of Team Lotus Caterham has been described in the official press release, however, as "the perfect partnership" – so Fernandes won't have put his signature on the contract without having a very good reason for doing so.