A brand that was relatively unknown in the United States a decade ago doubled its sales over the course of one year after introducing cars at lower price points - and offering competitive leases to get cars on the road.
When Pietro Frigerio set up his McLaren dealership in 2011 in Newport Beach, Calif., the brand was not well known beyond open wheel racing fans. So he put it on the corner where Rustin Avenue meets the Pacific Coast Highway to act as a billboard of sorts to 40,000 passing cars each week in a bustling shopping area.
Six years later, awareness of the brand is increasing across North America, new models are sold out before they reach retailers, and Frigerio is starting to outgrow his location's service facilities.
With last year's introduction of the McLaren 570S, which starts around US$200.000, about where the top Porsche models leave off - US sales more than doubled. And, according to registration data analyzed by IHS Market, the biggest group of buyers are people who already own Porsches.
"What's the next step after I own in my life four 911s? Something a little more exclusive," Frigerio said, explaining his customers' thinking. "They want something more special, they need something a bit unique, but they need something which is easy to live with."
Of course, his customers are in Southern California, that magical land of wealth and perfect weather, where according to Frigerio, a Porsche 911 is kind of a "normal car."
At the top of the McLaren line is its Ultimate Series, cars built for the track. With seven digit prices and Le Mans inspired technology, these cars are all about going fast at any price. The McLaren P1 GTR, a $3 million supercar with a name that echoes the F1 GTR that won 1995 Le Mans 24 Hours race, is available only to owners of the $1.15 million P1.
In the middle is the SuperSeries , cars that may be street legal but are typically kept at a private track, where drivers needn't worry about potholes or police. McLaren's 720s is its newest model, replacing the raw and roaring, 666 horse power 675LT and the 650S. With prices ranging from about $280,000 to the low $400,000s, these cars are significantly more attainable, but without wasting much weight or space on creature comforts. (The 720S does include two small cupholders and small vanity mirrors).
At the entry level is the Sports Series, with prices typically in the low $200,000 range. The bodies of the 570S and 570GT in his line resemble the track cars, but the suspension is less rigid - comfortable on city streets and even capable of navigating over a grocery store speed bump.
While offering more "practical" cars, such as this year's 570 Spider convertible, put the brand within reach of a larger customer base, its expansion last year - when sales in North America more than doubled - was spurred by the offering of leases through Ally Financial Inc. Whereas a 650S would lease for maybe $3,500 a month, you can drive a 570S for more like $2,500 a month. That's not peanuts, but it's a pretty reasonable way to get into a brand that until recently was known only for world class race cars.
The closely held company's growth has made it an attractive target for investors - but it looks like they will have to wait a while.
Conversations with Apple Inc. last year didn't go anywhere, and McLaren Automotive Chief Executive Officer Mike Flewitt told the Sunday Times that the "better route" is probably an initial public offering in three to five years.
While McLaren may still be little known among American consumers, it has a long history in racing, dating back to the legendary New Zealand driver and engineer Bruce McLaren, whose life and untimely death is the subject of a documentary film being released this month. McLaren cars won three Indianapolis 500 races in the 1970s. Then, under longtime boss Ron Dennis, who joined the team in September 1980, McLaren won 17 Formula 1 World Championships and the Le Mans 24 Hours race.
Bruce McLaren was a legendary race car driver and engineer, who died on test run at age 32. Courtesy of Gunpowder & Sky.
"When we started to do this business adventure, McLaren was unknown," recalled the dealer, Frigerio, who also has a Lamborghini outlet in Newport Beach. "Me, as an Italian, I watch Formula 1 - my grandmother knows what McLaren was. Here on the West Coast, it's a bit different."
McLaren is also intimately involved in the Formula E electric car racing series, having supplied motors and other electronic components for competitors through its McLaren Applied Technologies unit, which has also done work ranging from electronic sensors and manufacturing consulting to obesity research.
In June, the racing team, the consulting unit, and the carmaking businesses were all combined into one entity, the McLaren group, and Dennis, 70, sold his stakes in the businesses. He had already been displaced last year as chief executive officer of the technology group, which was the umbrella for the racing businesses and basically everything but auto manufacturing and distribution.
Unifying all the businesses under the McLaren Group should improve coordination among the various enterprises, the company said. It also simplifies the structure should an IPO eventually be pursued.
Ownership control remains with its long term majority shareholders, the Bahrain Mumtalakat Holding Co., which is a sovereign wealth fun, and TAG Group SA, the holding company with aviation interests that previously owned the Swiss watchmaker TAG Heuer. Mohammed bin Essa Al Khalifa - adviser to the crown prince of Bahrain - serves as executive chairman and TAG CEO Man sour Ojjeh is executive committee principal. Other leaders remain in previous positions, the company said, including Flewitt as CEO of the automaking business.
As fas as the racing team goes, it has been a bumpy year, amid disappointments with engine supplier Honda Motor Co. a new Honda engine is boosting hopes from admittedly low levels: When the reorganization was announced, Ojjeh lamented that the team "is not currently achieving the on track success in Formula 1 that we know it is capable of."
But racetrack setbacks haven't derailed the company's consumer vehicle momentum.
"As a retailer and from a consumer point of view, we've seen nothing" disrupting operations, said Frigerio. "The company has been slowly, but surely, constantly more solid and growing in volumes and quality and services."
McLaren North America President Tony Joseph is building out the dealer network, which now totals 18 in the US and two in Canada, with plans to add stores in Montreal and Denver this year. He said he aims to limit the outlets to about 30, as opposed to about 40 for other exotic brands.
Jamie Butters
Bloombers/ New York
When Pietro Frigerio set up his McLaren dealership in 2011 in Newport Beach, Calif., the brand was not well known beyond open wheel racing fans. So he put it on the corner where Rustin Avenue meets the Pacific Coast Highway to act as a billboard of sorts to 40,000 passing cars each week in a bustling shopping area.
Six years later, awareness of the brand is increasing across North America, new models are sold out before they reach retailers, and Frigerio is starting to outgrow his location's service facilities.
With last year's introduction of the McLaren 570S, which starts around US$200.000, about where the top Porsche models leave off - US sales more than doubled. And, according to registration data analyzed by IHS Market, the biggest group of buyers are people who already own Porsches.
"What's the next step after I own in my life four 911s? Something a little more exclusive," Frigerio said, explaining his customers' thinking. "They want something more special, they need something a bit unique, but they need something which is easy to live with."
Of course, his customers are in Southern California, that magical land of wealth and perfect weather, where according to Frigerio, a Porsche 911 is kind of a "normal car."
At the top of the McLaren line is its Ultimate Series, cars built for the track. With seven digit prices and Le Mans inspired technology, these cars are all about going fast at any price. The McLaren P1 GTR, a $3 million supercar with a name that echoes the F1 GTR that won 1995 Le Mans 24 Hours race, is available only to owners of the $1.15 million P1.
In the middle is the SuperSeries , cars that may be street legal but are typically kept at a private track, where drivers needn't worry about potholes or police. McLaren's 720s is its newest model, replacing the raw and roaring, 666 horse power 675LT and the 650S. With prices ranging from about $280,000 to the low $400,000s, these cars are significantly more attainable, but without wasting much weight or space on creature comforts. (The 720S does include two small cupholders and small vanity mirrors).
At the entry level is the Sports Series, with prices typically in the low $200,000 range. The bodies of the 570S and 570GT in his line resemble the track cars, but the suspension is less rigid - comfortable on city streets and even capable of navigating over a grocery store speed bump.
While offering more "practical" cars, such as this year's 570 Spider convertible, put the brand within reach of a larger customer base, its expansion last year - when sales in North America more than doubled - was spurred by the offering of leases through Ally Financial Inc. Whereas a 650S would lease for maybe $3,500 a month, you can drive a 570S for more like $2,500 a month. That's not peanuts, but it's a pretty reasonable way to get into a brand that until recently was known only for world class race cars.
The closely held company's growth has made it an attractive target for investors - but it looks like they will have to wait a while.
Conversations with Apple Inc. last year didn't go anywhere, and McLaren Automotive Chief Executive Officer Mike Flewitt told the Sunday Times that the "better route" is probably an initial public offering in three to five years.
While McLaren may still be little known among American consumers, it has a long history in racing, dating back to the legendary New Zealand driver and engineer Bruce McLaren, whose life and untimely death is the subject of a documentary film being released this month. McLaren cars won three Indianapolis 500 races in the 1970s. Then, under longtime boss Ron Dennis, who joined the team in September 1980, McLaren won 17 Formula 1 World Championships and the Le Mans 24 Hours race.
Bruce McLaren was a legendary race car driver and engineer, who died on test run at age 32. Courtesy of Gunpowder & Sky.
"When we started to do this business adventure, McLaren was unknown," recalled the dealer, Frigerio, who also has a Lamborghini outlet in Newport Beach. "Me, as an Italian, I watch Formula 1 - my grandmother knows what McLaren was. Here on the West Coast, it's a bit different."
McLaren is also intimately involved in the Formula E electric car racing series, having supplied motors and other electronic components for competitors through its McLaren Applied Technologies unit, which has also done work ranging from electronic sensors and manufacturing consulting to obesity research.
In June, the racing team, the consulting unit, and the carmaking businesses were all combined into one entity, the McLaren group, and Dennis, 70, sold his stakes in the businesses. He had already been displaced last year as chief executive officer of the technology group, which was the umbrella for the racing businesses and basically everything but auto manufacturing and distribution.
Unifying all the businesses under the McLaren Group should improve coordination among the various enterprises, the company said. It also simplifies the structure should an IPO eventually be pursued.
Ownership control remains with its long term majority shareholders, the Bahrain Mumtalakat Holding Co., which is a sovereign wealth fun, and TAG Group SA, the holding company with aviation interests that previously owned the Swiss watchmaker TAG Heuer. Mohammed bin Essa Al Khalifa - adviser to the crown prince of Bahrain - serves as executive chairman and TAG CEO Man sour Ojjeh is executive committee principal. Other leaders remain in previous positions, the company said, including Flewitt as CEO of the automaking business.
As fas as the racing team goes, it has been a bumpy year, amid disappointments with engine supplier Honda Motor Co. a new Honda engine is boosting hopes from admittedly low levels: When the reorganization was announced, Ojjeh lamented that the team "is not currently achieving the on track success in Formula 1 that we know it is capable of."
But racetrack setbacks haven't derailed the company's consumer vehicle momentum.
"As a retailer and from a consumer point of view, we've seen nothing" disrupting operations, said Frigerio. "The company has been slowly, but surely, constantly more solid and growing in volumes and quality and services."
McLaren North America President Tony Joseph is building out the dealer network, which now totals 18 in the US and two in Canada, with plans to add stores in Montreal and Denver this year. He said he aims to limit the outlets to about 30, as opposed to about 40 for other exotic brands.
Jamie Butters
Bloombers/ New York
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