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But I think even without the COVID the way the depreciation has hit here in the UK they would have struggled to find repeat customers.... I was looking at £200K+ to upgrade from my (bought new) 720S to a fairly lightly optioned 765LT and I would have really struggled justifying that sort of expenditure when I am extremely happy with the one I paid £250K for a couple of years ago :)
 

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But I think even without the COVID the way the depreciation has hit here in the UK they would have struggled to find repeat customers.... I was looking at £200K+ to upgrade from my (bought new) 720S to a fairly lightly optioned 765LT and I would have really struggled justifying that sort of expenditure when I am extremely happy with the one I paid £250K for a couple of years ago :)
the simple truth is that the 720s is way too good for most current owners to upgrade ... the LT only makes sense if you track or if you collect and want to have it as the last non hybrid McLaren in your Collection ... or if you simply don’t care the big price difference between new 765LT and slightly used 720s (but that is a nice used 991.2 gt3rs or even nearly 600LT Spider in some cases which I guess is a strong argument for not doing it) ... however it of course shows that McLaren must really do sth. About their used car prices Bc they start to significantly hurt new car sales ...
 

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Interesting video, Zombie, thanks for sharing.

Chris, you can debate the minutiae and veracity of his assertions, but at the end of the day, it is pointless; that is how he FEELS.

The guy has bought 5 McLarens. Do you want him as a customer, or not?
 

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Interesting video, Zombie, thanks for sharing.

Chris, you can debate the minutiae and veracity of his assertions, but at the end of the day, it is pointless; that is how he FEELS.

The guy has bought 5 McLarens. Do you want him as a customer, or not?
interesting point but remember one thing:

Ppl who get allocated all special cars would always complain about production numbers being too high Bc it negatively influences their investment ..... the question is whether a startup car company aiming at the mass luxury market can build a reliable business model by being a members only club... I would say NO !!! If we are talking Pagani or Kegg that might work but carries the high risk of being bankrupt once your product is no more innovative or fashionable ... there are a lot of car manufacturers who exactly experienced that especially in the sports and luxury car segment ...
 

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interesting point but remember one thing:

Ppl who get allocated all special cars would always complain about production numbers being too high Bc it negatively influences their investment ..... the question is whether a startup car company aiming at the mass luxury market can build a reliable business model by being a members only club... I would say NO !!! If we are talking Pagani or Kegg that might work but carries the high risk of being bankrupt once your product is no more innovative or fashionable ... there are a lot of car manufacturers who exactly experienced that especially in the sports and luxury car segment ...
The term "mass luxury market" is an oxymoron, to me.

Even at Ferrari's volume, it is minuscule compared to what I would call a mass market for vehicles. But, now I know precisely where our opinions differ.

I am fairly certain that 2 years ago, if they watched this video during a McLaren board room meeting, the conclusion would be "too bad we've lost him, but good thing there are many more like him, so not to worry."

Now, after the slow down and Covid-19, different story, obviously.

When things finally turn around and if McLaren manages to survive, does this guy buy 5 more McLarens or take his money back to Ferrari?

My point is, if the multiple car guys like him leave the brand, AND you have customers like Zombie that are not compelled to upgrade after 8 years, where is the volume you keep talking about going to come from?

Seems to me his argument was rather well made on that point. AFTER you've built brand loyalty, you can afford to rinse the brand a bit in the name of volume. Even then, it is risky and needs to be managed. There is no free lunch. Ferrari will pay, in some way, for increasing volume. Of course, they can afford some detriment to the brand because they have more brand equity than the Pope!
 

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The term "mass luxury market" is an oxymoron, to me.

Even at Ferrari's volume, it is minuscule compared to what I would call a mass market for vehicles. But, now I know precisely where our opinions differ.

I am fairly certain that 2 years ago, if they watched this video during a McLaren board room meeting, the conclusion would be "too bad we've lost him, but good thing there are many more like him, so not to worry."

Now, after the slow down and Covid-19, different story, obviously.

When things finally turn around and if McLaren manages to survive, does this guy buy 5 more McLarens or take his money back to Ferrari?

My point is, if the multiple car guys like him leave the brand, AND you have customers like Zombie that are not compelled to upgrade after 8 years, where is the volume you keep talking about going to come from?

Seems to me his argument was rather well made on that point. AFTER you've built brand loyalty, you can afford to rinse the brand a bit in the name of volume. Even then, it is risky and needs to be managed. There is no free lunch. Ferrari will pay, in some way, for increasing volume. Of course, they can afford some detriment to the brand because they have more brand equity than the Pope!
what you say is all true but the problem is they Need market share and numbers to distribute development costs among many units. How do your want to solve that ? McLaren is tech and development heavy just like a tech start up .... it’s normal that start ups only generate profits after a long time ...

Or do think anyone here would be willing to pay 600k for a 720s even if the car fights in that weight class (SVJ/ ford NGT) ...
 

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The term "mass luxury market" is an oxymoron, to me.

Even at Ferrari's volume, it is minuscule compared to what I would call a mass market for vehicles. But, now I know precisely where our opinions differ.

I am fairly certain that 2 years ago, if they watched this video during a McLaren board room meeting, the conclusion would be "too bad we've lost him, but good thing there are many more like him, so not to worry."

Now, after the slow down and Covid-19, different story, obviously.

When things finally turn around and if McLaren manages to survive, does this guy buy 5 more McLarens or take his money back to Ferrari?

My point is, if the multiple car guys like him leave the brand, AND you have customers like Zombie that are not compelled to upgrade after 8 years, where is the volume you keep talking about going to come from?

Seems to me his argument was rather well made on that point. AFTER you've built brand loyalty, you can afford to rinse the brand a bit in the name of volume. Even then, it is risky and needs to be managed. There is no free lunch. Ferrari will pay, in some way, for increasing volume. Of course, they can afford some detriment to the brand because they have more brand equity than the Pope!
about mass luxury... that’s just what it is - it was never any other thing since the Romans imported linen from Egypt 2200 years ago ...

Bespoke luxury is different in so many ways and is certainly not the car market we see today apart form one off Ferraris, RRs and Bugattis ... for that you really need to go higher up the food chain than the average 200k to 3m super or hypercar (important collectibles and art, mega yachts, big business jets and mansions or big Penthouses are what that market is about)
 

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New exotic companies have no choice but to push volume. If Bentley can barely make any money selling $250K+ cars that are arguably low-tech even with the massive amount of shared R&D at VAG, how could anyone expect McLaren to survive with even lower volume?

The reality is that other than Ferrari, it's almost impossible to profit in the segment on your own. Lamborghini would fail on its own and has been sold several times. Bentley would fail. Aston Martin is about to fail. Hell, what's Ferrari's income look like after you back out all the merchandise sales?

It's not possible for McLaren to sell only a couple thousand cars per year. They need more scale and need to sale as many as they can.
 

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New exotic companies have no choice but to push volume. If Bentley can barely make any money selling $250K+ cars that are arguably low-tech even with the massive amount of shared R&D at VAG, how could anyone expect McLaren to survive with even lower volume?

The reality is that other than Ferrari, it's almost impossible to profit in the segment on your own. Lamborghini would fail on its own and has been sold several times. Bentley would fail. Aston Martin is about to fail. Hell, what's Ferrari's income look like after you back out all the merchandise sales?

It's not possible for McLaren to sell only a couple thousand cars per year. They need more scale and need to sale as many as they can.
i don’t know if it’s still the case but I remember reading that Ferrari is making more money on merchandise and F1 than on selling cars ...
 
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what you say is all true but the problem is they Need market share and numbers to distribute development costs among many units. How do your want to solve that ? McLaren is tech and development heavy just like a tech start up .... it’s normal that start ups only generate profits after a long time ...

Or do think anyone here would be willing to pay 600k for a 720s even if the car fights in that weight class (SVJ/ ford NGT) ...
This is super interesting. The 720 is competitive with the SVJ and beats the snot out of the aventador, so it was an option. Would have been interesting if they went that route...
 

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This is super interesting. The 720 is competitive with the SVJ and beats the snot out of the aventador, so it was an option. Would have been interesting if they went that route...
well how should they ? they don't sell 720s without discount for 2/3 of an SVJ even its the better car - this is just about brand image and what I wanted to tell 6th element. You cannot just say you are Ferrari or Hermes or Lamborghini or Patek and behave like them ... Lambo can take that money for the SVJ (Questionable how much discount they give on a regular Aventador S - but about 20-25% were mentioned several times) bc they make the most extreme brutal looking V12 since the 1970is ... McLaren only started building sports cars (beside the F1) in 2012 ... nothing could ever change that in the next 2-5 years and therefore the idea to capitalize on the brand as suggested in the video does not work for them ...
 

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This is super interesting. The 720 beats the snot out of the SVJ, so it was an option. Would have been interesting if they went that route...
well how should they ? they don't sell 720s without discount for 2/3 of an SVJ even its the better car - this is just about brand image and what I wanted to tell 6th element. You cannot just say you are Ferrari or Hermes or Lamborghini or Patek and behave like them ... Lambo can take that money for the SVJ (Questionable how much discount they give on a regular Aventador S - but about 20-25% were mentioned several times) bc they make the most extreme brutal looking V12 since the 1970is ... McLaren only started building sports cars (beside the F1) in 2012 ... nothing could ever change that in the next 2-5 years and therefore the idea to capitalize on the brand as suggested in the video does not work for them ...
I think they would have still sold a lot. Say sell the base 720 for 450, normal versions going for say 520k. The question is how steep is that supply/demand curve for the 720. Could they more than make up the difference. Lets say they sell3k a year at around 300k currently, if they sold 2000 at 500k they probably are just as well off, maybe better. could they have sold that many at that price... Dunno. Seems within the world of plausible.
 

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I think they would have still sold a lot. Say sell the base 720 for 450, normal versions going for say 520k. The question is how steep is that supply/demand curve for the 720. Could they more than make up the difference. Lets say they sell3k a year at around 300k currently, if they sold 2000 at 500k they probably are just as well off, maybe better. could they have sold that many at that price... Dunno. Seems within the world of plausible.
no they could not - easy to see in the market Bc Ferrari would otherwise have made that with the F8 (which is a bit of the 720s of Ferrari and that even sells below the prices of a 720s new - prices are about 15-20% below the 720s here in Germany)
 

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Dealer slashed 8% off a 600LT coupe I was looking at 2 weeks ago. The salesman was telling me it was priced aggressively after I asked him to see if he can reduce anything. Now it's $20k off, lmao. I feel like offering $40k off list.

They also have a 2018 720S with 8k KMs for like $298 CAD. I feel like offering $260k CAD. The only thing I'm worried about is if prices will drop at the end of summer... I don't mind waiting a few months and driving the car until it snows.
 

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Dealer slashed 8% off a 600LT coupe I was looking at 2 weeks ago. The salesman was telling me it was priced aggressively after I asked him to see if he can reduce anything. Now it's $20k off, lmao. I feel like offering $40k off list.

They also have a 2018 720S with 8k KMs for like $298 CAD. I feel like offering $260k CAD. The only thing I'm worried about is if prices will drop at the end of summer... I don't mind waiting a few months and driving the car until it snows.
well ... they could still go a bit lower (-10 to 15%) but seeing McLaren extremely cutting the supply right now I would not bet on it for too long ... certainly not seeing why the cars should even be much lower in 6 months than they are now if economy slowly starts to recover but new cars are still rare ... (as stated in the other thread McLaren won’t build a lot of 720s in the next 6-9 months and there is nothing in sight at the same price lvl that would really make a 720s look bad ... only F8 and maybe the 25th version of the Aventador come to mind ... plus also maybe the new 3rs next year and AMG GTR BS ...) but all these should not be much better - more like maybe having other strengths like track capability but not a better package all together ...
 

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real data should be coming in from those who have purchased a car in the last month or so.. what are you guys seeing off msrp?
So far what I've seen from the only official McLaren dealer in my province:

2019 600 LT:

Was - $299,888 CAD
Now - $276,888 CAD

2018 720S Performance:

Was - $308,000 CAD
Now - $289,000 CAD

2018 720S:

Was - $308,000 CAD
Now - $298,000 CAD

2020 600 LT Spider:

Was - $343,000 CAD
Then - $335,000 CAD
Sold - $321,500 CAD
 

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Also, I think buying habits have changed a lot in this market. I used to think of the "it" car. Which dream car will be the one I can "grow old with." Be that retired guy babying his supercar. But somehow, we changed into this chart the depreciation curve group, looking at prices to get into a "deal" and "get the experience" and get out for as little capital outlay as possible. We get into the whole, target a low range, distressed asset, practice arbitrage, and even utilize crazy finance deals because of cheap money just to minimize investment in this 12 - 18 month experience.

Initially, I found this fun, but now it seems like a bit of over indulgence. Maybe modern exotics are not meant to kept for over 10 years like old Ferraris. I have a feeling if I bought a 458 ten years ago as my keep it forever supercar into retirement, I think I would be happy, but I didn't have $280K then LOL.
Performance and quality are now relatively cheap commodities. This is true from the 720s all the way down to Subaru STi type of vehicles, and everything in between.

On the Canadian pricing front - I'm not certain that Pfaff can keep going with McLaren. They are low volume to begin with. Now they won't get much product, they won't have any new models, and they can't sell 2 year old punched cars for even aggressive discounts...which they don't bother advertizing.

Maybe they will start to sell McLarens out of one of their other dealerships in Canada.
 

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Chris you can’t say they are a startup on one hand and aren’t expected to show profit and then also say they need to push volume to spread cost etc, on the other. Which one is it?

Instead of touting Track 25 every chance they get, they should have used investor money to fund a lower volume plan that built the reputation of the brand properly.

But they didn’t, did they? They DID race to “profitability” on paper as fast as possible, while dumping excess inventory all over the U.S., using discounts and artificially high lease residuals, just so they could book the revenue at the Woking gates.

You guys are killing me with this “need volume to survive”. That never should have been the plan in the first place. Seriously, which buyer of your luxury product wants to hear you brag about pumping out 25 variants of the same basic car???

In any case, hindsight is 20/20. Like I said, Covid-19 has forced the reset to happen earlier, anyway. Let’s hope they get a second crack at it.


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Chris you can’t say they are a startup on one hand and aren’t expected to show profit and then also say they need to push volume to spread cost etc, on the other. Which one is it?

Instead of touting Track 25 every chance they get, they should have used investor money to fund a lower volume plan that built the reputation of the brand properly.

But they didn’t, did they? They DID race to “profitability” on paper as fast as possible, while dumping excess inventory all over the U.S., using discounts and artificially high lease residuals, just so they could book the revenue at the Woking gates.

You guys are killing me with this “need volume to survive”. That never should have been the plan in the first place. Seriously, which buyer of your luxury product wants to hear you brag about pumping out 25 variants of the same basic car???

In any case, hindsight is 20/20. Like I said, Covid-19 has forced the reset to happen earlier, anyway. Let’s hope they get a second crack at it.


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so you suggest they should build fewer technological inferior cars, sell them with similar losses or more losses per unit to fewer ppl at higher prices and run around and tell everybody ( as a new company, most long term sportscar owners have no trust in) „we are exclusive, if we don’t invite you to buy our product, you aren‘t supposed to get it new...“ ... ? that way you don’t need to take the long Way and create a car company with that investor money ... you can just stack all up and burn it ... creates less mess for everyone ...

In all seriousness startups do exactly that: create a better product and try to have a big market share and not go bust in the process before becoming an established player which can sell its products at cost and later make good returns: how long did that take for TESLA, Apple, Google, FB or Amazon ??? but you expect a car company which needs to make a better alternative for an exciting product to companies being profitable in the business for 50plus years or being the small daughter of a giant car manufacturer that can harvest all kinds of tech from the parent for free in less than 8 years ???

Only thing I hear from you all the time is complaining how stupid McLarens growth strategy is: Can you suggest a better one WITHOUT telling them to copy Ferrari, which you obviously pretend to not understand as you constantly ignore (even its in full sight and clear to everyone) that Ferrari only works the way it does Bc it’s inherited extreme amounts of goodwill and brand value which comes form 70 years of extremely successful racing history and being Italian (which supports a certain image and lifestyle) ... ? As long as you cannot suggest a true alternative growth plan, without making another Pagani or Kegg (which does not work for McLaren) all you do is unsupportive complaining ...
 
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