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McLaren: Stepping out of Formula 1's shadow

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Unlike most start-up car brands, McLaren is blessed with more than 50 years of racing success attached to its name. However, this brand recognition comes at a price.

   

  NEED TO KNOW

        
♦  2018 sales target raised to 4,000  
£120,000 P13 aimed at volume  
‘We need more dealerships’  
   

While McLaren Automotive has been building cars for only two years, its high net-worth customers come with sky-high expectations, benchmarking the brand against competitors such as Ferrari.

The resultant pressure is driving McLaren to increase its global sales target from 1,500 units this year to 4,000 in 2018. Ferrari sold 675 units across its 12 UK dealerships last year and limits global sales to 7,000  a year to maintain exclusivity.

McLaren currently has a two-car range – the £180,000 MP4-12C and the P1 hypercar, which has already sold out its allocation of 375 and carries an average price tag of £1m after customisation.

In 2015, it will add the P13, with  which McLaren aims to unlock larger volumes and in turn create enough scale to establish used car volumes and a viable aftersales operation for dealers.

The P13 will compete with models such as the Porsche 911 Turbo and Ferrari 458 and is expected to be priced at £120,000.

Greg Levine, McLaren global director of sales and marketing and ex-Audi UK operations director, established the UK dealer network two years ago and has since added 41 dealers across 24 countries.

He believes the UK dealerships – Jardine Motors in London, Rybrook in Birmingham and Sytner in Manchester – set the example for how McLaren wants to run its retail operations across the world.

“Having had the opportunity to see retailers around the world, the most sophisticated market to sell cars is still the UK,” Levine said.

“The US is more sophisticated with how they operate the leasing market and financial services, but in terms of aftersales and best business practice, the UK dealers here are absolutely up there with the best and they know how to turn a profit.”

While all of the UK dealers are profitable, with business fundamentally driven by new car sales of the MP4-12C and P1, Levine says some of the biggest challenges have come from having to start from scratch with back-end systems that most sales operations take for granted.

Levine told AM: “After the fanfare of the launch, the reality of the task really set in. The biggest challenges have been the ones people don’t usually talk about, like the parts infrastructure, the diagnostic tools, all the invoicing and warranty systems.

“When you have to write all the back office systems from scratch, it’s a lot trickier and more time-consuming than you might think to get that right.”

Because the franchise is in its infancy, UK dealers don’t have used and aftersales volumes to balance the business yet, but this will come in time. McLaren Finance will also need to be matured in preparation for the P13.

Levine describes the franchise as starting to normalise, with the launch of its Qualified approved used car scheme earlier this year helping to keep used cars in the franchised network rather than losing stock to independent supercar specialists.

“I’m looking forward to the benefits of scale, because as soon as you have that level of throughput, life becomes more fun,” said Levine.

McLaren is already looking to add more UK locations to prepare for the demand expected for the P13.

“It was fine for us to launch with three dealerships in the UK, but we need to expand over the next two years. It’s quite clear looking at our competitors that we need more dealerships. If you buy a car in Scotland, it’s a long way to come down to Manchester to get it serviced.

“We want dealers that are going to drive the relationship with the customer. When we try to manage that relationship it becomes confused, so we really rely on our dealers in that area.”

Expansion is expected to include another London site and possible locations in Bristol and Scotland. Levine acknowledges that McLaren isn’t where it needs to be when it comes to having an established community of fans for its road cars and it’s an area he believes is essential to the brand’s future success.

“It’s about creating a community that live and breathe McLaren. Harley-Davidson is a great example of how you create a society that is completely behind the brand. To create that, you need time; you need a car parc and a level of presence.

“We need to drive it more. By the time P13 is launched, we really want to have an engaged audience.”

 

Prospects and fans

That audience can be categorised into prospects and fans – the people who can afford to buy a McLaren and the fans who aspire to own one. It is these fans who help drive perception and brand awareness.

One way McLaren engages with young fans is via a partnership with game developer Turn 10, which approached the brand to feature the P1 as the lead car for its Xbox One driving game Forza 5. The deal will see the P1 used in all promotional material for the game and at the new console’s launch in November.

A related competition, where a fan can win a drive up the hill at Goodwood has seen McLaren hit 150,000 Facebook likes in less than a year.

Levine said: “We want to engage with young fans through partnerships like Forza.

“My dream is to get to the point where you ask a kid what car they want when they grow up and they instantly say McLaren.”

 

Teething problems

The first batch of MP4-12Cs produced in Woking did suffer some electrical and scissor door faults after delivery to customers.

McLaren offered a free power upgrade of 23bhp to 623bhp for all customers as a result and brand boss Ron Dennis wrote letters to the people affected to apologise.

Levine is confident future products will live up to competitors as teething problems are ironed out at the factory.



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