McLaren Automotive has achieved in seven years what few UK luxury brands have managed over far longer periods: consistent profitability. Spun off from the McLaren Formula One race team to challenge Ferrari and Aston Martin, the company has built an affluent customer base for its growing range of two-seat, carbon-fiber supercars. Now it plans to invest 1 billion pounds (about 1.3 billion euros) over the next six years into r&d for 15 new products. During that same period, it plans to boost annual sales to as many as 5,000 supercars from less than 2,000 last year. Automotive News Europe Correspondent Nick Gibbs recently spoke to McLaren CEO Mike Flewitt about the challenges ahead.
How many cars will you sell globally this year?
We'll do around 3,000 this year [up from 1,654 in 2015]. We'll do about 4,500 to 5,000 by 2022. Five thousand is about capacity. We don't see it significantly increase from that.
You've got 1 billion pounds to spend on r&d up until 2022, right?
I've got to earn it.
Does that mean none of the money will come from investors?
It's all revenue driven. The strategy is to keep the business profitable, but with relatively small profits: 5 million pounds in the first year, 15 million in the second year and single figures again last year. What we have been doing is investing 25 percent of revenue back into new product. That's what we’re going to do over the next few years to create 15 new products. Shareholders don't put money in. They haven't since 2013. But they don't get any money out either. The value for them is the growth in the business.
That is a big investment for a company your size.
Oh, yes. We need to invest a lot of money to be able to produce cars that are competitive against some pretty high-powered competition.