Rag­ing Suc­cess for Lam­borgh­ini

Af­ter dif­fi­cult years fol­low­ing the fi­nan­cial melt­down of the late 2000s, the com­pany’s resur­gence and growth has been noth­ing short of spec­tac­u­lar

Portfolio - - IN THIS ISSUE - BY ROBERT ST­ED­MAN

In early June this year, Lam­borgh­ini un­veiled a new show­room in Sin­ga­pore. The space un­der­scores the suc­cess the lux­ury car­maker is hav­ing in Asia and the rest of the world. Af­ter dif­fi­cult years fol­low­ing the fi­nan­cial melt­down of the late 2000s, the com­pany’s resur­gence and growth has been noth­ing short of spec­tac­u­lar

Twas in me­chan­ics. he story of lux­ury car­maker Lam­borgh­ini has its ori­gins mixed in with an­other Ital­ian car leg­end, Fer­rari. Mr. Fer­ruc­cio Lam­borgh­ini was born in 1916 into a fam­ily of wine grow­ers. But Lam­borgh­ini saw no fu­ture in tend­ing the fam­ily’s vines and smash­ing grapes. His in­ter­est In his 20s Lam­borgh­ini served in the Air Force dur­ing World War II. Af­ter the war, he came upon a great idea. There was a lot of sur­plus equip­ment left over from the war. In fact, the Al­lies sold it off for nearly noth­ing just be­cause it wasn’t vi­able to ship it back. Lam­borgh­ini then took that in­ex­pen­sive sur­plus equip­ment and re-pur­posed it into agri­cul­ture gear such as trac­tors. It was very suc­cess­ful move. He be­came very wealthy from his trac­tor busi­ness. And just like to­day, if you come into wealth you tend to like high-ticket items. Lam­borgh­ini was no ex­cep­tion. He started col­lect­ing lux­ury sports cars, which in­cluded a Fer­rari. It was re­ported that Lam­borgh­ini drove a dif­fer­ent car for each day of the week. He had an ob­ses­sion with cars, so much so that he be­gan to race some of those that he bought. How­ever, as a keen me­chanic he was dis­ap­pointed with some of his pur­chases. When it came to rac­ing his Fer­rari, he thought that it was rough and loud on the road. The main prob­lem was with the Fer­rari’s clutch, which needed to be re­paired much too of­ten. In the 1960s, Mr. Enzo Fer­rari’s sports cars were con­sid­ered the finest in the busi­ness. As a me­chanic, Lam­borgh­ini de­cided to tell Fer­rari about the is­sues he found with his cars. He had thought that his com­ments would be re­ceived as con­struc­tive and ap­pre­ci­ated. Noth­ing could be far­ther from the truth. As the story goes, Fer­rari was sup­posed to have said that he didn’t ap­pre­ci­ate a trac­tor me­chanic telling him what was wrong with his high per­for­mance au­to­mo­biles. The stage was set. The re­buff led Lam­borgh­ini to con­clude that with all his skill, knowl­edge and pur­pose he could make a bet­ter car – a car he de­sired – and an au­to­mo­bile leg­end was born.

Cre­at­ing A Stan­dard

Lam­borgh­ini, founded Au­to­mo­bili Fer­ruc­cio Lam­borgh­ini S.p.A. in 1963 to com­pete with es­tab­lished brands of lux­ury sports cars, like Fer­rari. In 1966, the com­pany gained wide praise for its Miura sports coupé, which had rear wheel drive and its en­gine mounted in the mid­dle for bal­ance. Lam­borgh­ini’s con­fig­u­ra­tion be­came the stan­dard for high-per­for­mance cars of the day. Pre­vi­ously, en­gines were mounted ei­ther in the front or rear of sports cars. Lam­borgh­ini grew rapidly dur­ing its first decade, but sales plunged in the wake of the 1973 world­wide fi­nan­cial down­turn and the oil cri­sis. The firm’s own­er­ship changed three times af­ter that year; it strug­gled with bank­ruptcy in 1978. The huge Amer­i­can Chrysler Cor­po­ra­tion took con­trol of Lam­borgh­ini in 1987, and sold it to Malaysian in­vest­ment group My­com Set­dco and In­done­sian group V’Power Cor­po­ra­tion in 1994. In 1998, My­com Set­dco and V’Power sold Lam­borgh­ini to the Volk­swa­gen Group where it was placed un­der the con­trol of the group’s Audi divi­sion.

Sec­ond to None

The com­pany has had a rough and bumpy ride, but to­day, Lam­borgh­ini still sets the stan­dard for the ul­ti­mate in su­per­car builds. The cars’ per­for­mance is ar­guably sec­ond to none, and they have be­come bea­cons for the ul­tra rich to dis­play their wealth. Lam­borgh­ini CEO, Mr. Ste­fano Domeni­cali, was re­cently asked how the group main­tains its Ital­ian iden­tity within the Ger­man Volk­swa­gen and Audi group. “Very sim­ple. One thing is the money, that is con­nected to our in­vestors and share­hold­ers, that is strong, and this is very im­por­tant for us. An­other thing is that our car as­sem­bly plant is in Sant’Agata Bolog­nese. It is a true Ital­ian com­pany with a her­itage that will stay also for the fu­ture in our coun­try.”

Ger­man own­ers aside, the Ital­ian car­maker saw an­other record­break­ing year in 2017 in terms of sales. Mr. Domeni­cali was asked what he sees as the di­rec­tion for the com­pany for the next three years, he ex­plained that, “We are ex­pect­ing to be over the 5,000 units this year while we dou­ble our di­men­sions (num­ber of cars) in 2019. So it is re­ally a great mo­ment for our brand, a great mo­ment of growth, not only in terms of num­bers—last year we have over­taken one bil­lion Eu­ros as turnover—but also for the per­cep­tion.”

Big Fig­ures from A Small Com­pany

It’s amaz­ing how a small Ital­ian car com­pany with a work­force of about 1,600 em­ploy­ees man­ages to make a turnover of one bil­lion Eu­ros and get awarded em­ployer of the year for five years run­ning: Few com­pa­nies could boast such grat­i­fy­ing fig­ures. As to who is buy­ing the lux­ury cars, Au­to­mo­bile Lam­borgh­ini Chief Com­mer­cial Of­fi­cer, Mr. Fed­erico Fos­chini re­vealed at the launch in Sin­ga­pore that the com­pany’s best mar­kets are the United States, which ac­counts for one third of the sales. Next is Ja­pan and Asia, while the UK is third. Fig­ures pub­lished by Lam­borgh­ini also re­veal that the com­pany’s has tre­bled its car sale in just a short seven years. In 2010, the com­pany sold about 1,300 cars, while in 2017 that num­ber in­creased to a stag­ger­ing 3,800 ve­hi­cles. In 2018 the com­pany hopes to sell an as­tound­ing 5,000 mo­tor­cars.

To Touch and Feel

The new show­room in Sin­ga­pore al­lows Lam­borgh­ini’s clien­tele to lit­er­ally ‘touch and feel’ the world of Lam­borgh­ini: a client lounge that in­cludes a car con­fig­u­ra­tion sys­tem to guide ar­eas that pro­vide sam­ples of ex­te­rior and in­te­rior fin­ishes, al­low­ing cus­tomers to phys­i­cally touch and play with com­bi­na­tions of col­ors and ma­te­ri­als, such as soft leathers or the ap­pear­ance of car­bon fiber. Ac­cord­ing to Mr. Fos­chini, “Sin­ga­pore is a very im­por­tant mar­ket for us.” As to whether Lam­borgh­ini will start charg­ing ahead into of­fer­ing elec­tric cars, Mr. Domeni­cali in­sists, “The next prac­ti­cal step will be, of course, the hy­bridiza­tion. Hy­bridiza­tion will be in any case con­nected to our tra­di­tional very strong en­gines that are V12 and V10.” It seems that the car­maker will in­deed of­fer an elec­tric ve­hi­cle at one point, but pro­duce hy­brids first. A few months ago, af­ter ini­tially say­ing they would never build an elec­tric car, ri­val Fer­rari an­nounced plans to do just that. So it looks like Lam­borgh­ini is in good com­pany. When asked what the fu­ture of the su­per­car maker will be, Mr. Fos­chini replied, “We are in­no­va­tors, fu­ture shapers and pi­o­neers. In a word, rule break­ers. The fu­ture does in­deed look very bright for Lam­borgh­ini.”

MR.STE­FANO DOMENI­CALI, CEO, LAM­BORGH­INI

FOUNDERMRFERRUCCIO LAM­BORGH­INI

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