Discussion
jsf said:
The redundancy numbers and split tells you all you need to know about where the problem lies.
F1 team is perfectly viable, mass producing the road cars currently isn't.
Question is.. Can they command the sort of hypercar money that they need to if they reduce volume, and in doing so staff, but still maintain a world class facility and deliver cutting edge performance?F1 team is perfectly viable, mass producing the road cars currently isn't.
After the 2008 crash a few others tried to go down the £1m hypercar route. The problem was that the likes of Bugatti started to also make £1m hypercars, but at a loss. If that's all McLaren will base their business upon, they can't make a loss.
I'm not saying McLaren are in any way competing for the Bugatti crowd... But clearly if they are to make more money with less output, the cars are going to need to be very special and incredibly expensive.
And also has to somehow compete with the likes of Project One hypercar and Valkyrie, both of which will be loss makers. Both of which will be around £2-3m when they roll out.
It's a tough position for them, and I sympathise.
jsf said:
Unless you have full access to the accounts, you have no idea what model of business is going to be viable, and that will be based on best guess projections of a future none of us can remotely predict right now.
Most of the posts in this thread are pointless guff and will remain so.
Thanks for your contribution then Most of the posts in this thread are pointless guff and will remain so.
Yea it's all just speculation. But there are a handful of undeniable facts. Life is tough for small volume specialist car manufacturers, increasingly so. That's the main one.
jsf said:
Unless you have full access to the accounts, you have no idea what model of business is going to be viable, and that will be based on best guess projections of a future none of us can remotely predict right now.
Most of the posts in this thread are pointless guff and will remain so.
The full accounts, financial statements and annual reports are available to all to view online, for the group and component parts.Most of the posts in this thread are pointless guff and will remain so.
The F1 team lost £80m in 2018 despite selling some heritage assets.
TheDeuce said:
It's only getting more difficult for guys such as McLaren (road cars). Not only has legislation tightened up at an ever increasing rate, they also now have to battle current and incoming emissions penalties for making 'non green'' cars.
Put it all together and it explains why 15 years ago £100k would buy a decent supercar, and now it's more like £200k++. That's not just inflation... It's passing on the truly enormous cost of making a product that 99% of the people and politicians don't want.
It's also a situation not helped by the fact that car making giants such as VW and Mercedes insist on making halo supercars/hypercars at a loss.. Whereas McLaren need to turn a profit on each and every unit they ship.
I would have thought that the ability to buy a supercar is pretty well-linked to the value of investments like property.Put it all together and it explains why 15 years ago £100k would buy a decent supercar, and now it's more like £200k++. That's not just inflation... It's passing on the truly enormous cost of making a product that 99% of the people and politicians don't want.
It's also a situation not helped by the fact that car making giants such as VW and Mercedes insist on making halo supercars/hypercars at a loss.. Whereas McLaren need to turn a profit on each and every unit they ship.
£100k to £200k in 15 years is 4.7% pa. London property has risen at least that fast. Over that same time, inflation overall in the UK has averaged 3% pa. Even ignoring property, £100k plus 15 years' inflation would be £155k. The biggest problem might be that average incomes *fell* from 2008 to 2018... eventually the economy was going to run out of steam!
Another potential issue with the car business; if it becomes known it's in financial difficulties, the kind of people who can afford to buy McLarens will tend to know about it. It creates a big cross in the negative column if there's a realistic possibility your purchase will not be manufacture supported before warranty expiration.
skwdenyer said:
TheDeuce said:
It's only getting more difficult for guys such as McLaren (road cars). Not only has legislation tightened up at an ever increasing rate, they also now have to battle current and incoming emissions penalties for making 'non green'' cars.
Put it all together and it explains why 15 years ago £100k would buy a decent supercar, and now it's more like £200k++. That's not just inflation... It's passing on the truly enormous cost of making a product that 99% of the people and politicians don't want.
It's also a situation not helped by the fact that car making giants such as VW and Mercedes insist on making halo supercars/hypercars at a loss.. Whereas McLaren need to turn a profit on each and every unit they ship.
I would have thought that the ability to buy a supercar is pretty well-linked to the value of investments like property.Put it all together and it explains why 15 years ago £100k would buy a decent supercar, and now it's more like £200k++. That's not just inflation... It's passing on the truly enormous cost of making a product that 99% of the people and politicians don't want.
It's also a situation not helped by the fact that car making giants such as VW and Mercedes insist on making halo supercars/hypercars at a loss.. Whereas McLaren need to turn a profit on each and every unit they ship.
£100k to £200k in 15 years is 4.7% pa. London property has risen at least that fast. Over that same time, inflation overall in the UK has averaged 3% pa. Even ignoring property, £100k plus 15 years' inflation would be £155k. The biggest problem might be that average incomes *fell* from 2008 to 2018... eventually the economy was going to run out of steam!
Uncertainty and decline in monthly income will have a great effect on taking on new finance.
Exactly. Affordability numbs sales of such cars. Heightened financial uncertainty makes it harder for McLaren to continue to manage their debt efficiently and affordably. Whatever the details, that's the overall situation they're up against.
However, I expect that McLaren will get through this one way or another. Their core product is good, and is attached to a race team with a level of history and relevance that is very valuable. For the next few years however, they're just one of a thousand examples we will all hear about, where a company that was just about coping and trying to improve is suddenly delivered a hammer blow due to CV and the economic fallout.
However, I expect that McLaren will get through this one way or another. Their core product is good, and is attached to a race team with a level of history and relevance that is very valuable. For the next few years however, they're just one of a thousand examples we will all hear about, where a company that was just about coping and trying to improve is suddenly delivered a hammer blow due to CV and the economic fallout.
Dermot O'Logical said:
In the current situation, McLaren may not be regarded as a viable credit risk for suppliers, who may decide that they won't supply parts/materials/whatever unless payment is made up front.
In which case, they're screwed.
They are, and the solution to not being able to borrow money is to sell off part of the business to raise it. That's happening, and is confirmation that their debt is no longer viable.In which case, they're screwed.
Dermot O'Logical said:
I can imagine Claire Williams right now, thinking "Well, at least we're not McLaren"...
I think the situation Williams is overall far more worrying than McLaren.Williams are at the point of having to sell a majority stake of the team, which will remove control from the family. And then whoever buys it has to improve it, and then top up the budget for the next few years until decent results are sustained for long enough for wealthy sponsors to return. Williams have done themselves a lot of damage, and lost a lot of stored up value by doggedly going down the path they have.
McLaren are in a tricky spot right now, but they're ultimately good at what they do both on the track and at making road cars. Once refinanced and a decent plan put in place, they should be able to trade through this period and look forward to hopefully happier days ahead. They may not manage that, it's not a certainty... but the potential is there.
TheDeuce said:
Dermot O'Logical said:
I can imagine Claire Williams right now, thinking "Well, at least we're not McLaren"...
I think the situation Williams is overall far more worrying than McLaren.Williams are at the point of having to sell a majority stake of the team, which will remove control from the family. And then whoever buys it has to improve it, and then top up the budget for the next few years until decent results are sustained for long enough for wealthy sponsors to return. Williams have done themselves a lot of damage, and lost a lot of stored up value by doggedly going down the path they have.
McLaren are in a tricky spot right now, but they're ultimately good at what they do both on the track and at making road cars. Once refinanced and a decent plan put in place, they should be able to trade through this period and look forward to hopefully happier days ahead. They may not manage that, it's not a certainty... but the potential is there.
The only way forward, based on what we believe is the current situation, is for somebody/another company/group of investors to buy out Mumtalakat, TAG/Mansour Ojjeh and (presumably) bank lenders, and then, as you have described with reference to Williams, fund the operations for the forseeable future until additional investment and/or sponsors are prepared to put money into the Group.
Please form an orderly queue.
The Williams situation looks better to me.
It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
C Lee Farquar said:
The Williams situation looks better to me.
It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
Perhaps Mercedes will buy both teams.It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
C Lee Farquar said:
The Williams situation looks better to me.
It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
Ron has nothing to do with Mclaren anymore full stop so how is him having no shares in anyway comparable to Frank Williams? It takes them a month to lose what McLaren lose in a day. Williams are funded to the end of the year, Mclaren to next month. Williams have consistently raced within their means whilst Mclaren have racked up significant debt.
And Frank still owns a controlling share, Ron has no shares.
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