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i bought 9

not buying my more.

what does that say Nady?
Yeah, I get that and understand that.

However, the retention and the building up of the customer base is building from what I'm seeing on the ground (765 spider will be my 12th Mac).

Oddly enough the ultimate series customers are the ones who are grumbling more then others (if I say something negative on the i/g stories about Mac's or the company, etc., then the ultimate series owners are the ones who chime in the most).
 

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Yeah, I get that and understand that.

However, the retention and the building up of the customer base is building from what I'm seeing on the ground (765 spider will be my 12th Mac).

Oddly enough the ultimate series customers are the ones who are grumbling more then others (if I say something negative on the i/g stories about Mac's or the company, etc., then the ultimate series owners are the ones who chime in the most).
Its A good stat.
however, of the original 20 or so European buyers on here, how may of them are still buying Mclarens now ?

partly i suspect your stat is the peddling of the limited edition allocation story. That doesn’t wash this side of the pond (Anymore)

but what is certain in Europe is that almost none of the original customers, those who bought at least two let’s say, buy Mclarens anymore. and a lot of those boys and girls bought a lot more than 2.

i sincerely hope it’s temporary. But it’s unfortunately the truth of the matter at this moment. The allocation thing is not new customers replacing old, it is McLaren needing new customers to replace the old.

the ridiculous thing is the company should be kicking ass. It would have been the easiest thing in the world to retain customers and bring in new. Losing all your old customers and trying to find new is a very very tough sales path.

and your point about ultimate customers is interesting. In Europe it exists but the Noise from sport And super series customers is louder, even if the weighting that they are given is less, for reasons that @invisiblewave alluded to.
 

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Based on social media postings, I think McLaren's image in the US is a lot different than the EU. I think it's gaining a big following here, but at the end of the day it seems they just don't make any money, so I'm not sure how long their current business model can go on. Quality and excellence aside, it's likely that there's just no money to be made being an independent low-volume exotic manufacturer.
 

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Based on social media postings, I think McLaren's image in the US is a lot different than the EU. I think it's gaining a big following here, but at the end of the day it seems they just don't make any money, so I'm not sure how long their current business model can go on. Quality and excellence aside, it's likely that there's just no money to be made being an independent low-volume exotic manufacturer.
this is very true… straight line speed from rest is not important in Europe overall, but drag racing is in the US so McLaren scores well on this statesdie, and this has proven successful marketing for them… the interest on this side of hte pond has been more about lap times and here the more modern cars have not faired so well when worked on in a cost of overall ownership perspective.. the upgrade cost from 720 to 765 was huge when taking into account 2nd hand values, for a barely perceptible change in lap time, indeed some sources report the 765 is slower .. same goes for 620 R and so forth…

there is general or even total fatigue in europe at the cost of ownership, the forever cycle on iterative new model, and the fact that the quest for sales has pushed the market completely beyond saturation with 3 or so year old 570 going for barely more than a cayman…

one of the major dealers in the major city in the UK managed to sell 3 765 before the allocations were moved to the US… europe got all the limited edition BS as well, but i guess has grown tired and is therefore in the ‘whatever’ mode…

i think you can also judge the interest in europe by the amount of people from europe who post here… back in the day, this forum was most likely 50/50 euro/us with a good smattering of those from all over the globe.. its now most exclusively US based…
 

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i think you can also judge the interest in europe by the amount of people from europe who post here… back in the day, this forum was most likely 50/50 euro/us with a good smattering of those from all over the globe.. its now most exclusively US based…
This I have noticed. Way more US members now.

Wild that a 570S is the price of a Cayman. Maybe I can rent one of those in Spain next week instead of a Golf lol
 

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this is very true… straight line speed from rest is not important in Europe overall, but drag racing is in the US so McLaren scores well on this statesdie, and this has proven successful marketing for them… the interest on this side of hte pond has been more about lap times and here the more modern cars have not faired so well when worked on in a cost of overall ownership perspective.. the upgrade cost from 720 to 765 was huge when taking into account 2nd hand values, for a barely perceptible change in lap time, indeed some sources report the 765 is slower .. same goes for 620 R and so forth…

there is general or even total fatigue in europe at the cost of ownership, the forever cycle on iterative new model, and the fact that the quest for sales has pushed the market completely beyond saturation with 3 or so year old 570 going for barely more than a cayman…

one of the major dealers in the major city in the UK managed to sell 3 765 before the allocations were moved to the US… europe got all the limited edition BS as well, but i guess has grown tired and is therefore in the ‘whatever’ mode…

i think you can also judge the interest in europe by the amount of people from europe who post here… back in the day, this forum was most likely 50/50 euro/us with a good smattering of those from all over the globe.. its now most exclusively US based…
Interesting stuff, and a bit of a conundrum for a company that is (or was) strapped for cash. The depreciation issue could easily be addressed with a change in the warranty policies by making it cheaper and safer to buy for those who don't have the stomach to take on the risk of a $80k engine swap.

At the performance levels we're now at, model differentiation is a tad more difficult. Unless you go the SUV route.....🤬
 

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Interesting stuff, and a bit of a conundrum for a company that is (or was) strapped for cash. The depreciation issue could easily be addressed with a change in the warranty policies by making it cheaper and safer to buy for those who don't have the stomach to take on the risk of a $80k engine swap.

At the performance levels we're now at, model differentiation is a tad more difficult. Unless you go the SUV route.....🤬
Doubtful. McLaren depreciation is average now. They will never achieve Ferrari residuals and at best will reach Lamborghini (which is where they were at with 720S more or less). Warranty on the Artura is 5 years now I think, so that should be solved.
 

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Doubtful. McLaren depreciation is average now. They will never achieve Ferrari residuals and at best will reach Lamborghini (which is where they were at with 720S more or less). Warranty on the Artura is 5 years now I think, so that should be solved.
The question is whether the change is permanent or temporary. I don't think we know the answer to that yet.

As for the different perceptions of the brand, I think there are also some more subtle cultural differences at work.
 

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Doubtful. McLaren depreciation is average now. They will never achieve Ferrari residuals and at best will reach Lamborghini (which is where they were at with 720S more or less). Warranty on the Artura is 5 years now I think, so that should be solved.
IMO the 5y warranty on the Artura is a very attractive selling point

The easiest way for McLaren to make buckets of free money is selling an SUV. Sure, it will bother purists but that kind of revenue stream allows them to keep building kick ass cars.
 

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IMO the 5y warranty on the Artura is a very attractive selling point

The easiest way for McLaren to make buckets of free money is selling an SUV. Sure, it will bother purists but that kind of revenue stream allows them to keep building kick ass cars.
Depends how cheaply they can build one. Everyone else builds their $250K SUVs on already-developed cheap Audis and such.

Since they have nothing but 2-seat exotic CF tubs and such, I'm not sure they could afford to build an SUV.
 

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this is very true… straight line speed from rest is not important in Europe overall, but drag racing is in the US so McLaren scores well on this statesdie, and this has proven successful marketing for them… the interest on this side of hte pond has been more about lap times and here the more modern cars have not faired so well when worked on in a cost of overall ownership perspective.. the upgrade cost from 720 to 765 was huge when taking into account 2nd hand values, for a barely perceptible change in lap time, indeed some sources report the 765 is slower .. same goes for 620 R and so forth…

there is general or even total fatigue in europe at the cost of ownership, the forever cycle on iterative new model, and the fact that the quest for sales has pushed the market completely beyond saturation with 3 or so year old 570 going for barely more than a cayman…

one of the major dealers in the major city in the UK managed to sell 3 765 before the allocations were moved to the US… europe got all the limited edition BS as well, but i guess has grown tired and is therefore in the ‘whatever’ mode…

i think you can also judge the interest in europe by the amount of people from europe who post here… back in the day, this forum was most likely 50/50 euro/us with a good smattering of those from all over the globe.. its now most exclusively US based…
Excellent post, Mikey.

Do we have a consensus on why it has gone wrong - I mean causes, not symptoms?

My take is that they didn't have enough start-up equity which, in the absence of a huge corporate owner, was always going to be a major weakness. I was so hoping they would tie up with Apple.
Then there was the boardroom battle, which is never good but in a company with a small leadership structure and lack of executive depth tends to be very destructive.
Even without the boardroom battle, the company leadership was probably stretched too thin. When the shareholders committed to going into the road car business, which IIRC was in late '08, the racing team was doing very well and management probably did not foresee that it would become a cash drain, and then a management drain. That took a few years, but the timing probably could not have been worse.
The shareholders clearly underestimated the length of the learning curve before a workforce could produce well-built cars in a reasonable number of hours per unit.
As I have said before, it always seemed dubious to start a road car company in Woking, Surrey, with its absence of both sufficient factory sites and sufficient numbers of experienced workers. Those problems could have been solved n other parts of the UK, but of course those parts would not have been conveniently located next to McLaren's architectural showcase on the lake, a few miles from Ron's house.
Then, instead of building their own dealer network, they assigned franchises to established dealers of other, sometimes competing, brands. From a marketing perspective that might have made sense, but from a service and resale perspective it did not.
The Honda works deal - seemed a good idea at the time!
Then they sacked Ron, leaving an organisation with two distinct parts, headed by very different personalities who had competing priorities and were not exactly best buddies. Without Ron (or another dominant figure) to keep order, frictions were inevitable.

On its own, each of the above should have been soluble. All together in one young organisation, they have been seriously problematic.
 

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I like to remember three key statements of a McLaren dealer: when the 540/570 came out he said "with these cars McLaren has to learn to make money now, don't be surprised if suddenly certain solutions are made very cheap... ", then he once said "I don't know where in the market to place all these new "models"..." and recently he said "in the meantime we have over 300 McLaren cars in the Swiss market, McLaren has to painfully learn what it means to suddenly have to take care of such a big customer base and especially what it means to take care of customers who bought a cheap used car as their first McLaren...". And when I think about these three points I have to say: these are the typical phases of every startup company, there's nothing special about them.

And yet: for products that have to meet the highest standards (and I think McLaren wants to compete with the best of the best), the European market is the absolute benchmark. Those who don't survive in Europe will sooner or later go under. I now ask myself, how will McLaren get out of this disaster? To be realistic, in the long run "outstanding acceleration values" will not be sufficient enough by a long way. I maintain that in the McLaren customer segment, product quality and customer support are the keys to sustainable success.

Of course, the Brexit and Covid come at the worst time for McLaren and were difficult to predict. But you also have to be able to manage such "impacts". As you aptly wrote New Britain, there were a lot of "embarrassing and unnecessary" mistakes made.

It remains exciting. I'm keeping my fingers crossed for McLaren.
 

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To assess what has happened, I think we have to look at the road car business's starting point, as that has been the real problem.
Back in the '90s, Ron was not interested in building a road car company. The F1 was fantastic but it was a (money-losing) one-off, which retained so little of Ron's interest that he subsequently offered to sell McLaren's F1 parts inventory and servicing business to a guy I know. When they built MTC (work started in the late '90s), there was no intention to have a road car business. Ron did have busines aspirations beyond racing, but they were more about technology generally rather than about retail automobile sales.
Through the '00s, the technology side of the business did not grow much, at least not in terms of financial returns. Maybe that was because, as car racers at heart, the company was more interested in creating new objects than in writing software and exploiting the whims of teenagers, but in any case racing remained by far the dominant part of their business.

That imbalance started to get tricky to maintain when there was a change of leadership at Daimler and the incompetent but McLaren-friendly Schrempp was replaced by the competent but McLaren-hostile Zetsche, who was very keen to have Daimler's big investment going into a racing team named 'Mercedes' and thought, probably rightly, the Ron had outwitted Schrempp and the Daimler board many times.

The straw that broke McLaren's back was the so-called 'Spygate Scandal', which was a scandal not because of anything McLaren did but rather because of what the despicable lowlife head of the FIA Herr Max Mosley did.
Being a huge and successful multi-national almost always means kissing politicians' dirty asses and making pragmatic if distasteful compromises. Daimler saw that as business-as-usual, whilst Ron viewed that as capitulating to a scumbag. The result cost McLaren 100 big ones and, more important, unfairly (in two senses - there had been no offence in the first place, and whatever had happened had had nothing to do with Daimler) tainted Daimler's image - not good when Daimler's reason for being in F1 was to enhance its image.

Zetsche and Spygate meant that, one way or the other, if Ron and Mansour were not going to sell out to Daimler, Daimler were going to walk.

I believe that, at the same time, Spygate focused Ron's mind on the tenuousness of having hundreds of millions of dollars and hundreds of jobs tied up in an undiversified business niche subject to the political dictates of a drooling lunatic (in this case one with Fascist blood in his veins) and to the commercial manipulations of someone who was, shall we say, known to the police and had already royally screwed the team owners on more than one occasion. With his general technology business not flourishing (probably because its emphasis was more about technology that it was about business), Ron sought a way of diversifying McLaren's revenue stream while he could still deal from a position of strength, and the road car business seemed an obvious choice.

The other spur to Ron's choice of going into road cars was his jealousy of Ferrari. Here were Ferrari, luxuriating in one of the world's most popular brands and a cash cow, despite the fact that they made crap road cars and achieved racing success by constantly cheating and getting away with it. What Ferrari had unjustifiably achieved really stuck in Ron's craw.

Ron thought that McLaren could emulate Ferrari. What he failed to appreciate was that Ferrari's incredible commercial success was largely a creature of unique historical circumstances that, for numerous reasons, were not going to be repeated decades later.

How many 'supercar' makers operating on an industrial scale have succeeded as independents? Lamborghini endured decades of failure before the brand name, and little else, was bought and developed by Volkswagen. Same for Bugatti. Porsche was going out of business until it too was bought by Volkswagen, an acquisition which might not have ever happened without the Piech family link between the two companies. Aston Martin has only been bankrupt seven times, and was on the verge of bankruptcy again before its recent rescue by a t-shirt salesman.

I'm not sure how possible it was in the 21st century to start from scratch an independent, international maker of supercars. Yes, with the help of massive government subsidies you could start a maker of fast-moving vacuum cleaners, but they aren't supercars and never will be. We all hope that McLaren will thrive, but it's a hard road and, if they succeed, they will be the exception.
 

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Very interesting New Britain! Regarding your conclusions: I guess McLaren has the potential to be the exception. If I look on what they where able to reach in such a short time they can succeed, it doesn’t need a complete restart. They have superior technology and an unique heritage (Bruce McLaren, Formula one and CANAM), important ingredients for such an emotional market segment (story-telling in sales and marketing). But it needs an outstanding, nearly zero-fault management. I see two key success factors: less models/variants and better customer service. This should be doable. Hope they get the time they need for a correction/optimization. Because the whole electrification/decarbonization madness gives a lot additional pressure on McLaren. I guess a few years ago no one in the car industry was thinking that this religion can affect the business so fast.
 

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Very interesting New Britain! Regarding your conclusions: I guess McLaren has the potential to be the exception. If I look on what they where able to reach in such a short time they can succeed, it doesn’t need a complete restart. They have superior technology and an unique heritage (Bruce McLaren, Formula one and CANAM), important ingredients for such an emotional market segment (story-telling in sales and marketing). But it needs an outstanding, nearly zero-fault management. I see two key success factors: less models/variants and better customer service. This should be doable. Hope they get the time they need for a correction/optimization. Because the whole electrification/decarbonization madness gives a lot additional pressure on McLaren. I guess a few years ago no one in the car industry was thinking that this religion can affect the business so fast.
You and I might be influenced in a car purchase by a connection to the great Bruce McLaren and the glory days of Can-Am, but unfortunately I think we're in a minority, especially when the target market is people who can afford to spend at least $200k for a new car.
Formula One - yes, that does show up on many people's radar screens and furthermore is current and thus seems more relevant. It's a very good thing that F1 now has an 'affordable' cost cap. But I wonder how important that is to supercar sales relative to other things. Lambo is not and, essentially, never has been a competitor in F1. Porsche was in F1 only briefly and that was before most of today's Porsche buyers were born. I'm not denying that racing success can make some difference, but I question how much of a difference.

A big part of McLaren's challenge is that they need to generate enough unit sales to pay for the development of all the uninteresting but essential parts under the skin. If they reduce the number of variants, they weaken their ability to amortise those fixed costs, which Lambo amortise under the VW umbrella and Ferrari do by selling 10,000 units a year.

I hope you are right about the future. This is just a very difficult market niche for a stand-alone company.
 

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@New Britain @Iron5,

in my view, Mclaren has always struggled to find the right size for its market… it didnt’ help that the 12c was a little bit underfinished when released, partly through no fault of their own.., but the cost of ownership was already struggling…

the alacrity with which 570 and 720 were bought back and replaced with new, with the owners paying the difference, was absolutely shocking…a very poor indication of how some were getting remunerated it would seem, when a substandard car, and there were/are huge numbers, was just an opportunity to get more (whole)sales…

alignment has been wrong since the very start… in some ways you can’t blame people for following a strategy which is best for them on a personal basis, but not on a corporate long term basis, so the fault doesn’t just squarely lie with the exec.,.

I have to believe that there is a right size for the company from every perspective,… r and d, resale etc etc… we all know its easiest to retain customers rather than find new… i don’t understand a strategy that doesn’t value the customers that it has sufficiently.. it makes life too hard..

any extra volume sold has just crushed margin, so the net benefit of those extra units can have been marginal at the very best, and in reality negative, as most refuse to pay list for the stitching to be exactly their shade when 8 months or so later, yu’ll be able to get the same car with a different stitch and perhaps one or two other items not perfect for 30% off… deflation as any economist will tell you, is bad for business as individuals will put off buying decisions as why buy when it will be cheaper tomorrow.. you don’t want to be paying huge money for a car with any thought of some other individual buying practically the same car for less.. you should be selling exclusivity, not discounting, within a business model that accounts for the type of individual you are most likely dealing with..

anotehr funny example was the luggage on the speedtail.,… if you remember They wanted 50k gbp for a set finished in leather to match the car…. I suggested the money would have been better invested in an entire herd of cows, and perhaps something more worthwhile with what was left over.. yes there are people who will buy these items and other spurious, ludicrous items, because perhaps some reason they have never understood the value of money and i accept that there is good margin in providing for this low hanging fruit, but as a percentage of customers overall, they must be a very small proportion..

almost all people who buy cars at this point have an idea of value.. and most people understand that a good deal is one where both sides are happy… you can’t continue to piss your customers off and think that you’ll be successful… keep them happy with reasonable costs of ownership and ambition and strategy which will inevitably align more closely with theirs and everything become much much easier… the market wont let you do something that isn’t possible. McLaren have tried exactly that..

i particularly love the anecdote that McLaren owed Brembo huge sums in arrears for the brakes… Brembo refused to deliver any further brake sets…. Having arranged some financing an offer was made to settle the debt, 50% of the outstanding to allow deliveries to recommence… deliveries recommenced, but each car set now only contained 3 calipers…

when you treat people like idiots, you may just find others will turn around and do the same, with interest..

this current management group have just made it too hard, partly through their own personal greed.

I strongly hope Paul Walsh will have worked it out.. i can imagine Latifi must be fuming…
 

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I don't know, guys. I think we have seen in numerous manufacturers that annual production numbers in the 1,000-3,000 range just don't work. To get those numbers you need a dealer network for both sales and servicing, customers are unwilling to accept the idiosyncrasies and shortcomings of an artisanal builder such as K'egg or Pagani, and yet you cannot achieve the prices necessary to cover your fixed costs (or at least so far no one has succeeded at it). Lambo and Bentley would not exist today without VW, Rolls not without BMW, Lotus not without its umpteenth owner. Ferrari have coasted along with no advertising, getting subsidies from Fiat when necessary, getting special 'consideration' from the FIA, and spending almost nothing on R&D unless you consider occasionally changing the alloys in their 1930s-era unibody chassis design to be R&D.

It's just a very tough spot in the market. Expand volume and you lose pricing power; lower volume and you raise unit cost. Those axioms apply in theory to every point in the market, but this particular market, with most major competitors being owned by huge car-makers that provide crucial economies of scale whilst regulators are constantly tightening the screws and ramping up costs, is one where the medium-size producer has always found itself in a dead zone between the artisans and the behemoths.

Maybe it will work, we all hope it will work, but ISTM that for it to work on anything above a few hundred units/year, McLaren will have to create their own Teflon-coated bullshit that so far only Ferrari have had.
 
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