The future of the Woking auto company may not be as rosy (or orange …) as some people thought or expected.
After having exploded on the supercar and hypercar market in 2018 with 4,806 deliveries, the British automobile brand suffered a very slight decline in sales (-0.853%) in 2019 with “only” 4,765 units started.
If this 2019 figure is nothing dramatic or dangerous for the sustainability of the company, it is however a first signal which must impose prudence and lucidity on McLaren to move forward without risk while staying as close to the Track25 plan. We will remember that this implementation in 2018 should allow the brand to develop and present over the next five years some 18 new sports, some of which will be electrified.
2020 will be a “white” year
In an interview with Automotive News a few days ago, Mike Flewitt, CEO of McLaren Automotive, explained that the Coronavirus epidemic would probably, at the very least, cost the company, which had been growing since month of January. He goes on to say that in 2020, and in view of the general situation (epidemic + economic crisis) McLaren should produce very few coupes and spider. He then specifies that it will take all of 2021 to return to the level where the brand was at the end of 2019.
The CEO of the British brand is however a little worried because he believes that demand should decrease very significantly this year and again noticeably next year. Flewitt makes it clear that the health crisis will have a real impact on the market. He makes us understand that even the rich customers of McLaren could modify their automobile consumption by preferring life and their health to material goods like cars. (note: cars that they often have in number in their garages).
Finally, he makes it clear that if this economic and financial problem affects the company he runs, he believes that all brands are in the same boat.
Towards a mortgage or a sale of part of the historic cars to find funds?
Affected by the crisis which is setting up like many other companies across the Channel but also around the world, McLaren and more particularly its competition department could seek to raise funds, in particular thanks to its historic cars.
Also, in order to face the crisis linked to the pandemic, McLaren would consider raising some 275 million pounds (~ 310 million euros), essentially for its Competition division, through the mortgage of its headquarters and of a part of its historic F1 collection.
It is in any case one of the options foreseen after the British state refused a loan of 150 million pounds sterling (~ 167.5 million euros)
The collection, which includes more than a hundred Formula 1 cars, is estimated at around 250 million pounds and the premises of the stable at 200 million. In total, McLaren could therefore mortgage up to 450 million but the team will normally need less.
As far as we know, the team could take out a loan from Michael Latifi, one of the shareholders who counts for McLaren and the company, would pledge certain assets of the company.
The matter is in the preliminary stages and McLaren declined to comment on the matter..
A spokesman for the Woking company said simply that like all other British companies, McLaren was badly hit by the pandemic and that company officials were exploring different funding options.
These steps are being taken to help the brand and the team cope with this interruption in industrial, commercial and sports activity.
A file to follow.
Via Motorsport, F1only, FranceRacing.