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RE: Lamborghini's Stephan Winkelmann speaks out

Friday 9th February 2007

Lamborghini's Stephan Winkelmann speaks out

Andy Enright discusses the Sant'Agata firm's plans with the boss

Lamborghini CEO and President Stephan Winkelmann

"A Lamborghini SUV? Although the old LM is an icon, this sort of car would run counter to Lamborghini's reputation." Stephan Winkelmann, Lamborghini's president and CEO shifts gears effortlessly. "An SUV or a 2+2 like the Espada are possibilities," he muses "but right now we don't have a third model in the pipeline."

Lambo's SUV

Right then, just outside the Nurburgring, Hans Lehmann is waiting at the track's industry pool exit. He's been there some time but patience is part of a spy photographer's job spec. Suddenly a distinctive bark and his Canon snaps the evidence. Disguised beneath Porsche Cayenne body panels is what most think is the next Lamborghini SUV, based on the guts of an Audi Q5 with what sounds like the V10 of a Lamborghini beneath the bonnet. One can excuse Mr Winkelmann his gentle dissembling. He appears to be making a decent fist of things in Sant'Agata.

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Melding Audi's buttoned-down rectitude onto the Lamborghini corporate culture has been an enormous undertaking and only now is the partnership beginning to bear fruit. It doesn't take long on the factory floor to establish the seismic magnitude of Audi's involvement with Lamborghini, the almost cottage industry feel of the Murciélago production line in sharp contrast to the surgical cleanliness and efficiency of the Gallardo line.

The difference in numbers? Each Gallardo spends 59 minutes at one of 22 construction stations. A Murciélago, by contrast, requires three hours at each of its 14 stations. Of the 2,095 cars produced in 2006, it's perhaps unsurprising that 1,651 of these were Gallardos, 1,025 of which were Spyder models.

The new order

Everything is changing. The last employee to have worked on the Miura retired in September as did Lamborghini's last sheet metal worker. There's a younger workforce and the queues in the canteen indicate a bigger body of staff. In 1998 there were 300 working for Lamborghini, today 750 but the agnolotti is still worth waiting for.

If Stephan Winkelmann didn't exist, Audi would take it upon themselves to invent him. Of German parentage but raised for the first 20 years of his life in Rome, he ran German operations for Audi and was chairman of the board of Fiat Automobile before being hired to the big office at Lamborghini. He's fiercely protective of the brand yet refuses to be shaken when confronted with the widely received notion that the Murciélago is the last 'true' Lamborghini.

"No, I don't necessarily find that assertion insulting. As a company we need to innovate. What was right in the 1960s is not good enough for today. A big engine and a nice shape are no longer enough and we cannot do what we did forty years ago. Quality, safety and homologation issues see to that."

Capacity questions

"The biggest challenge facing Lamborghini right now is one of physical capacity. Here at Sant'Agata we have a maximum production capacity of 2,300 or 2,400 without serious investment. This is the issue when considering a third product line. We could possibly run a second shift but this brings problems of its own. Tooling. Leasing. Human resources…"

He waves a hand dismissively at what is clearly a thorny issue. If production at Sant'Agata is problematic could he see a scenario where Lamborghinis were built elsewhere? Possibly Germany?

"Sant'Agata Bolognese is a centre of excellence. Production, restoration, design, museum, ArtiMarca (Lamborghini's burgeoning merchandising operation) – the core business is always here. Assembly is always in symbiosis with suppliers and some do more and some do less. Total outsourcing wouldn't be desirable."

The Porsche model of outsourcing Boxster production to Valmet in Finland leaves Winkelmann unfazed as does Porsche's acquisition of a 20 per cent stake in the Volkswagen Group. "There is very little overlap in product line between Lamborghini and Porsche. We take a view that the more sporting know-how that enters the group the better."

Too close to Audi?

He is similarly sanguine about the danger of the Audi R8 cannibalising Gallardo sales. "The R8 occupies a different market position to the Gallardo; it's both a different size and a different price. Audi consulted us on how to approach the market and build a car like this and, although the cars have little in the way of common parts, we had some Audi employees based here building Lamborghinis for a while. I think they found it informative," he chuckles.

What of the accusation that Lamborghini's reliance on four-wheel drive as one of the firm's core competences allies them a little too closely to Audis in the eyes of consumers? Winkelmann is adamant that key differences exist. "It's an interesting point but we established a base building four-wheel supersports models back in the early nineties, long before any Audi involvement" he explains. "What's more, we use viscous coupling technology here which is different to the traditional Audi quattro model. Four wheel drive is, and will remain, one of Lamborghini's USPs alongside design, performance and power."

Managing demand

No doubt Audi's top brass will be eyeing Lamborghini's market data. The US is the key market with 40 per cent of production heading across the Atlantic. Next up is Germany, followed by the UK, Italy and Japan. Switzerland is on the up and Russia, China and India all have potential although there are some infrastructure issues. With three dealers in China, one in Russia and one in India with another opening soon, Lamborghini is broadening its horizons.

A healthy sense of perspective is useful though. A single US dealer, Lamborghini Houston sold more cars in 2006 than Russia, China and India combined and, if California were a separate nation, it would be the company's biggest market. As much as anything the biggest problem is managing the demand.

"What's easy to overlook is that for decades we have been building 250 cars a year. Now we are a different company but in order to protect the brand we still need the same philosophy of producing always less than demand. Once you oversupply, that leads to a vicious circle of discounting at dealers and then the brand is done. Over."

Is retro retro?

As indeed is Lamborghini's brief flirtation with retro design themes. Although there was strong demand for the company to produce a limited run of the Miura design study, penned by Walter de'Silva, Winkelmann dismisses the exercise as merely a celebration of the firm's 40th anniversary, a one-off tribute.

"We're not planning on riding the retro wave, despite vocal demand from the US. Lamborghini needs to be recognised as a trendsetting company and retro design is, to me, indicative of running out of ideas. Despite this, I have to say I was surprised and happy at the plaudits."

The immediate future is one of consolidating their position, with more derivatives and special editions such as the Murcielago Versace and Gallardo Nera models that have recently been produced plus the expansion of the Ad Personam individualisation program.

"Although we've had more orders in 2006 than any year before, we're aware that the production life cycle of a Lamborghini is often double that of a 'normal' car and we need to keep things fresh." In the medium term the possibility of a lightweight Gallardo with a little more power is one that no senior suit will discount.

Improving the breed

With improved financial stability is there a possibility that this might see Lamborghini re-enter the motorsports arena? "Ferruccio Lamborghini reckoned there was no need for competition. For most of our customers the opportunity to take their car on track is more important to them than factory-backed motorsport ventures. Sooner or later we will run a Gallardo racing series for gentlemen." Don't hold your breath for a Lamborghini F1 team, in other words.

Lamborghini has lurched from one disaster to another down the years and this is the first time that many can remember an element of corporate security. Winkelmann's eyes light up when he indicates the company's return to profitability. "2006 has been the third year in a row we've earned money but the first year we've earned good money. We just need to take a long term view and not become fixated on short term return on investment. The key indicators are good. Warranty claims are down, rework in the factory has been massively reduced and supplier quality has improved enormously."

Interview over, Winkelmann shakes hands, wishes me the best and exits via the factory floor. The horn sounds for the end of the shift and Sant'Agata experiences its daily logjam of Fiats. The lines fall silent, the lights in the museum blink off one by one as curator Cristina Guizzardi gives one last check over her charges. One car remains out front, a black Gallardo, and one light remains burning. It's the light in Winkelmann's office. He's silhouetted, gesticulating with one hand, cell phone in the other. Maybe he has Lehmann's number on speed dial...

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paulie-mafia

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