Monday 9th February 2009

McLaren Plans to Defy Recession Trends

Ron goes public on McLaren production plans

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Ron Dennis has spilled the beans about plans to turn McLaren into a volume competitor for Ferrari in the luxury sports car market, reports theFinancial Times.

With international investors running scared of the automotive sector in the light of its current plight, we can’t help wondering whether Big Ron’s comments to the FT were designed to help shake out the extra funding required for his planned expansion. The McLaren strategy apparently demands a £250m injection in new production facilities to enable the group to meet its target of building 1,000 sports cars in 2011 and 4,000 by 2012.

According to the FT, McLaren (whose existing shareholders include Daimler, a Bahraini group and TAG) has instructed Credit Suisse to draw up a funding strategy that includes bringing in new outside investors. Ron said that recession has 'definitely thrown a glitch' into plans to double McLaren’s £650m valuation to £1.25bn in 2012.

According to the interview, the McLaren Group is 'focused on a variety of UK solutions' for its planned expansion, even though the capital requirements for new UK production facilities will be greater than using a production partner like Magna in Austria, as has been suggested recently in the automotive media.

'My intention is within the next six months to create 400 new jobs and save 200 jobs. Where everybody is looking to trim their costs, I want to grow,' said Ron.

[andyps]

Maybe the FIA could chip in $100m.

Great to see that McLaren are still being positive about their plans, albeit with a little caution. I wish them well.

[Frimley111R]

Great idea, lousy timing.

[Goochie]

Could this be part of an F1 exit strategy ?

[AL...Ease]

Can't see them getting backing from the Dragons' Den.

[belleair302]

If Mansour Ojjeh (TAG GROUP) had made this announcement I would feel happier. Ron talking about financial plans scares me....he may need the investment to pay out for his divorce.

[edb49]

It's not a bad idea to be honest. Recession will be over in a few years, and Ferrari needs some proper competition.

[mgv8]

Sounds like realy good news to me (if it can happen).

[roland82]

If they can build something fast, fun and desirable at a price to rival 911's and 430's then they should be fine. But as well all know thats easier than it sounds. Taking Aston and Jaguar as examples [not fully Brittish I know] it seems like car companies over here cant keep prices down.

[cvegas]

Great idea, and hopefully great timing. Markets should pick up again by 2010/11.
It is companies like Jaguar, McLaren, BMW, etc. who invest for the future who will come out stronger after this recession.

[dkennedyvxt]

Goochie said:

Could this be part of an F1 exit strategy ?

I would be VERY surprised.......

Good luck to them....Ron gets a lot of stick but his passion for F1 / Cars in general is admirable.

[Horse_Apple]

roland82 said:

If they can build something fast, fun and desirable at a price to rival 911's and 430's then they should be fine. But as well all know thats easier than it sounds. Taking Aston and Jaguar as examples [not fully Brittish I know] it seems like car companies over here cant keep prices down.

If a 430 is around £150k and the first McL is likely to appear in a couple of years then I would expect a tag of £150-£200?

In regards to this being part of an F1 exit plan, it looks more like a plan to leverage further returns out of the F1 program.

I have to say that it would be nice to see this come to fruition.

[jazzdevil]

Goochie said:

Could this be part of an F1 exit strategy ?

...what about a way to dodge the 'no customer engine' clause the FIA wants in F1?

Surely at the moment they've essentially only got a choice of selling out to be a Merc factory squad or they could set-up and start their own engine building?!

[hollowpockets]

Sounds like one of these wild claims TVR make every now and again...

[dpbird90]

Good luck to them. About time somebody embarrased Ferrari good and proper on the road as well.
Let's just hope McLaren's roadcars are as good looking as their racers, Ferrari's have become too ugly and we need something thats beautiful as well as "holy fking st" fast

[dandarez]

edb49 said:

...Recession will be over in a few years...

I reckon we will see 'green shoots' quicker than you think...

this shower of sh*te in power is not going to relinquish their reign easily, they'll make sure the feel good factor is returned big time for the General Election.
It'll be 'recession - what recession?'

[Gold]

hollowpockets said:

Sounds like one of these wild claims TVR make every now and again...

How many F1 championships have TVR won?

[[AJ]]

This was in the news some months ago, remember these pics:





I remember them stating the new McLaren was going to be 911 money (I'm guessing Turbo rather than C2 figures). I for one would be very interested if they were able to pull that off.

Edited by [AJ] on Monday 9th February 17:20

[tinman0]

Mclaren have to be Ferrari's (and Porsche's) worst nightmare in when it comes to brand. Wish them the best!

[BoRED S2upid]

Just can't see them worrying the likes of Porsche and Ferrari. Those guys have decades more brand loyalty and prestige, it would take a while for them to catch up. IMO they lost ground when the Mclaren F1 stopped production, that was an awesome machine they should have kept some momentum after that success.

[[AJ]]

BoRED S2upid said:

Just can't see them worrying the likes of Porsche and Ferrari. Those guys have decades more brand loyalty and prestige, it would take a while for them to catch up. IMO they lost ground when the Mclaren F1 stopped production, that was an awesome machine they should have kept some momentum after that success.

I'm not too sure about that. The F1 has become a legend in it's own right and the brand certainly does have prestige. I'm a big Porsche fan, but as long as the new McLaren is well built and can perform as expected, I think it will do well, especially here in the UK. Ferrari aren't selling anything at the moment, Porsche are annoying their loyal customers with daft new warranty clauses and only drip feeding improvements to the model ranges, so they do need a good shake up). A £100k McLaren could do just that.