McLaren under investigation

Interesting. Any other data? Seems shocking how little revenue/profit they make.

 

So they’re losing money in F1, losing money on the road cars and under investigation. Should make you feel good about buying a new Macca

 

As opposed to Ferrari who makes more off of each car than any other brand? Personally I’d rather buy a product knowing I’m not paying some huge mark up off their cost.

 

Guess Ferrari should stop being so efficient, increase for no reason their running costs and be on the brink of going bankrupt just after you bought their car to appeal to you then?

 

You can't look at margins and compare them to pure dollars.

$500 premium on a device you use constantly, every day of your life? Not that big of a deal. $5K for red dye on your seatbelt? Bit different.

 

I don't think the investigation matters. It could be anything. If you go through quarterly reports for public companies, you see tons of them have various investigations on going at any given time. It's usually not a big deal.

 

$5K for collared eat belts? Gotta love the web! I just checked my sticker and it was $350 for orange belts. Maybe red is different, but I doubt it.

 

Actually it’s a Veblen good. Look it up. There is appeal in the markup.

My children and I were discussing buying a 488. What is the allure ?
If all cars performed at that level at a modest price would that be sufficient? Is it the absolute performance or the relative?

Or is the allure having ratified performance and exclusivity ? Which makes it more desire able.

For a Veblen good price drives much of the demand independently of the relative value of the increase in quality, performance, or rarity.




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I have no idea what the actual cost are, I was just making an arbitrary example of overpriced options. Even $350 for different colored belts is insane if you think about it.

 

$350 definitely doesn't seem like a value, but you aren't buying a Kia. If I remember correctly Porsche's belts are about the same price. Ferrari and Porsche are the champions of overpriced options. McLaren is just following their lead.... and in a capitalist society, the free market rules.

 

Am I a purchaser of their stock or their products?

 

I wonder if that is/was the alleged funny business that was going on with McLaren GT.

As for profits, Mike Flewitt is running the company as a growth company, returning equity back to investors. Its tax efficient and the company has gone from 0 to 1 billion pounds valuation in just 6 years.

As for F1, I think that is losing money for sure.

 

This is spot on. If anyone here has ever built a company you understand what it means to reinvest for growth but they will have to turn the corner soon to be viable long term.

 

Isn't it funny how Porsche & Lamborghini have been criticized for building SUV's? Now soon Ferrari but McLaren is sticking to building the highest performing sports cars on the market (for now). They aren't turning the models over as often as they once did - lesson learned. They will pick up production because they have to eventually turn a profit. You cant win...

I will argue that McLaren is stealing business from Lamborghini and Ferrari and there is room for growth. I wouldn't be surprised if they come out with a $125 to $150K car to rival the 911 series. There is certainly some market share they can pick up there.

 

1) the models are more like 5 years now.
2) I doubt they build anything different in the near future and that doesnt bother me. I dont have an issue buying other makes for other uses. I have an M5, RR, and a Urus on order. It all works out.

I dont think I am too different from other car people.

 

They plan to produce 18 different models by 2025 I think. So something different is coming.

 

Supercars in general are all kind of redundant if we are honest with ourselves. Does someone need a 720/P1 over a 570? No. But some can afford it and will pay. My opinion anyhow.

 

Exactly