Well, the world’s largest Lamborghini dealership has closed this year as well as the largest Chevy dealer.

Orange County Lamborghini apparently closed its doors, though the site remains: LAMBORGHINI ORANGE COUNTY

According to Leftlane New the company’s management struggled, despite the dealership being quite successful with some exclusive clientele for which most luxury goods makers would kill. It’s unclear which part of the family business is failing, however, as Vik is the property owner, but the dealership owners are actually Nora, Sossi, and Astrid, his sisters. One possibility is that cash flow is weak following the 2007 purchase of an Audi-VW dealership in Santa Ana. Either way, the business lesson to be learned is that cash flow is not safe in the down economy.

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Unless you have been living in a cave the last two years, you know that Porsche’s strong financial position has allowed them to make a gradual play for VW’s shares. In fact it is just the latest in what has been a long-time partnership between the two + Audi. You may recall that many years ago Audi+Porsche dealerships often shared the same building.

But what we really didn’t know until recently was how Porsche might use VW in their product portfolio. Remember that the VW Touareg , Audi Q7, and Porsche Cayenne share the same platform. The benefit being significantly cheaper development costs. Bear in mind that Porsche has had a benefit in this partnership of releasing their Cayenne before VW and Audi have released their products. Ironically, it is the smashing success of the Cayenne product line that has given Porsche the ability to launch a takeover of VW.

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Are Ferrari and most other supercar makers immune to economic recession? That was the question that everyone wanted an answer to because the “just how bad is it?” gets answered when we financial figures.

Ferrari released this press statement verbatim on October 27:

“Maranello, October 27th, 2008 - The Board of Directors of Ferrari SpA met today under the chairmanship of Luca di Montezemolo, to examine the third quarter results. Ferrari recorded 450 million in revenues (up 22.3 percent year-over-year), and a trading profit of 79 million (17.6 percent of revenues), up 41.1 percent from the 56 million figure (15.2 percent of revenues) for Q3 2007.
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How pleased Lamborghini must be that it’s latest supercar, the Murciélago LP640 has just co-starred with Cristian Bale in the latest Batman flick, the Dark Knight. Who knows if Lambo paid dearly for the product placement, but a 155+ million dollar opening weekend is sure to get them a ton of free advertising.

Auto companies are masters at product placement.

A few examples:

• Ferrari - Ferris Bueller’s Day Off. Matthew Broderick steals his friend’s father’s 250 GT California.
• Porsche - Tom Cruise drives a 928 into Lake Michigan (oops!)
• Dodge Challenger - Vanishing Point’s star car gets driven into 2 bulldozers at high speed. Big crash!

Tons of other examples exist, I am sure someone will point out the cars from Bullitt and Miami Vice, too…

Look for the ultra-exclusive Lamborghini Reventón to appear in a yet-to-be-determined film sometime soon!

This week’s Link of the Week is pretty cool. Because of their rarity, non-millionaire fans of supercars can often find it difficult to get behind the wheel of the world’s flashiest and fastest cars. Even millionaires find it difficult to choose with a record number of supercars available for public consumption.

If you’ve ever wanted to spend the day “testing” a variety of supercars at supercar speeds, there’s a new option for you. 

It’s called Supercar Life.

The LA Times has written about the program here: http://www.latimes.com/classified/automotive/highway1/la-fi-garage26apr26,0,4314202.story

 

Supercar profits used to be a pipe dream. It was only a year ago that we told you the story of how companies like Aston Martin and Ferrari were making money hand over fist. Today it was Lamborghini’s turn as they announced financial results for 2007. 2007 was indeed quite a year.

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Enjoying paying US$3+ for that gallon of gas? Didn’t think so. But don’t worry the Middle Easterners are more than happy to sell your their pricey car juice. And they’ll use it to buy themselves a Ferrari! Super!

Article Here

Aston Martins, Ferraris, and Lamborghinis are selling like hot cakes in the land of sand, so get yours before the list gets too long…

Photo courtesy Ferrari.

In our most recent posting we pointed out that Aston Martin was integral to Ford’s Premier Auto Group, not just because it represented Ford’s presence in the supercar market, but because it was also profitable.

Profitability is something that once eluded supercar makers such as Aston, Ferrari, and Lamborghini, even Porsche at times. We noted that Aston Martin is, according to Ford, now a profitable unit. As Ford does not publish profitability for each of the PAG’s units, we will have to take their word for it, but we do know they sold over 5000 cars in 2006.

Take a look at Lamborghini, which according to the company, pretax profits rose to €18.1 million in 2006. That’s a 4.5-fold increase from 2005 when profits were only €4.4 million. CEO Stephan Winkelmann has said, “We have a complete model range, which is the youngest we’ve ever had. We are now a real car manufacturer.” While the “real-ness” of Lamborghini’s product line may be debatable, they do have 10-cylinder and 12-cylinder models, the Gallardo and Murciélago, respectively. Both models feature a coupe and roadster version.

Part of this increase has been due to higher demand and production. In 2000, Lamborghini produced just 1 car per day, but in 2006 they had ramped up to 13 per day. This figure is still more than a bit shy of Porsche, but respectable for considering competitor Pagani has said it will make only about 20 cars for the year.

Doing very simple math, without consideration for one time write offs/sales, we can note the following per car sales for 2006:

Manufacturer	Profit (pretax)	Production (# of cars produced)	Per car profit
Lamborghini	€ 18,000,000	2095	€ 8,591.89
Ferrari	€ 183,000,000	5671	€ 32,269.44
Aston Martin	N/A	5000	N/A
Porsche	€ 1,390,000,000	86426	€ 16,083.12

Porsche is the most profitable auto manufacturer in Europe, but per car averages put Ferrari impressively on top. Aston Martin and Pagani do not post numbers officially, but Aston reports a profit, however small that may be. Bottom-line, money CAN be made in supercars!

Sources:

Bloomberg http://quote.bloomberg.com/apps/news?pid=10000080&sid=aLQlMBk2X4yM
Lamborghini
Ferrari
http://www.automotoportal.com/article/ferrari-annual-report-2006-impressive-growth-in-revenues-and-profits
http://www.autoblog.com/2006/07/04/aston-martin-makes-a-profit
Aston Martin
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article681820.ece
Porsche
http://www.iht.com/articles/2006/11/15/bloomberg/bxporsche.php

At Beyond the KM, we find that automotive news is a love-hate sort of relationship. We loved the new Porsche Turbo, but we hate the new Kia Rondo (and every Kia for that matter). We love new safety devices like Mercedes S-Class radar-guided cruise control, but hate when it fails.

Thus the relationship continues this week when Ford announced that it was resurrecting the Taurus name. As we stated months prior, we LOVED when they ditched the Taurus, and we HATE that they are bringing back the nameplate.

It is not to say that Taurus is the worst name for a car, certainly, the Sable (also being resurrected) is worse, and Lamborghini does name many of their cars after bull fighting legends (think Murciélago and Miura). The problem we have always had is that the Taurus name, while having seen heavy investment over the years, still stands for mediocrity. Would a food maker name a new flavor of cheese “the moldy, stinky jack” ??? We don’t think so.

In essence Ford is trying to resurrect a car that is not selling well hoping that the mediocrity of its predecessor will not drive buyers further away. The move by Ford proves mediocrity in the marketing organization and will likely show that no matter how fanciful the name, if you are producing junk, people won’t buy it. American carmakers still don’t seem to take cue from the Europeans and Japanese that quality is more important than nameplate. Chevy NOVA anyone?

Yes, it’s that time of the year, the picks for the best cars as of Winter 2007.

Which European cars are by matter of fact, “the best”? Find out below:

Best Supercar over $500,000: Bugatti Veyron 16.4

Best Supercar under $500,000: Lamborghini Gallardo Spyder

Best Ultra Luxury Convertible: Rolls-Royce Phantom Drophead Coupé

Best Ultra Luxury Sedan: Rolls-Royce Phantom

Best Ultra Luxury Coupé: Bentley GT

Best Hot Hatchback: VW GTI

Best Hot Sedan: Audi S8

Best sound: (tie) Ferrari 599 GTB/Ferrari F430

Best sports car under $100,000: Porsche 911 Carrera S

Best sports car over $100,000: Aston Martin DB9 Volante

Best new sports car: Aston Martin V8 Vantage

Best Small Car: Mini Cooper S (John Cooper Works Edition)

Best Old Car Experience: Caterham Lotus 7 SV

Most economical and fun sports car: Lotus Elise

Mid-sized Sedan: BMW M5

Best Car for Old People Who Don’t Give a Damn: Mercedes-Benz S65 AMG

Best SUV: Mercedes-Benz G55 AMG

Best minivan/mpv (yes, I’m ACTUALLY including this category): Mercedes-Benz R63 AMG