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McLaren boosted by road cars sales, but Formula 1 team still lacks sponsors

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McLaren boosted by road cars sales, but Formula 1 team still lacks sponsors
Jan 8, 2016, 4:11 PM

McLaren has received a boost as 2016 gets into gear, with the news that sales of the company’s road cars have increased for a fifth successive ye...

McLaren has received a boost as 2016 gets into gear, with the news that sales of the company’s road cars have increased for a fifth successive year and that success will allow for an increase of its engineering staff by 40 per cent.

The beleaguered British F1 team, which branched out to become a volume road car manufacturer back in 2010, sold 1,653 cars in 2015, with sales of its three-tier Sports Series line being particularly high, according to a report in Bloomberg.

The F1 team's road car division, McLaren Automotive is seeking an output target of 20 cars per day, an increase on the 14 it currently produces. To do this, the company is planning to create an extra 250 jobs, most of which will be in production, as McLaren aims to take on established super car manufacturers like Ferrari. The Maranello concern, which will celebrate its 70th anniversary in 2017, produces over 7,000 cars a year and new chairman Sergio Marchionne has targeted an increase to 9,000 cars a year in the future.

McLaren factory 1

McLaren Automotive CEO, Mike Flewitt, said in a statement: “2015 was a year of rapid expansion for McLaren Automotive. When the company was set up in 2010, we set ourselves an ambition to launch one new car every year. In 2015, we launched five!

"This accelerated development has led to yet another record year, with unprecedented levels of demand for all of our cars, especially the new Sports Series, for which we are currently holding more than six months worth of orders.

"The need to add a second shift in the McLaren Production Centre is another great example of the progress that McLaren Automotive has made in its short history. I look forward to receiving the 250 new production team members into the company shortly."

McLaren factory 2

The news of strong sales of its road cars will be welcome to McLaren, as the F1 team is going through its toughest ever spell; it is enduring its longest winless streak and has lost a number of long-term sponsors in recent years. Vodafone has not been replaced as a £50m a year title sponsor since it withdrew at the end of 2013, Hugo Boss left for Mercedes and long time partner TAG Heuer recently switched to Red Bull, where it will brand the engine.

Speaking in a media session at the Abu Dhabi Grand Prix, McLaren boss Ron Dennis explained that the deal with TAG Heuer had come to an end after a disagreement with the Swiss watchmaker’s CEO, but added that the deal was not as lucrative as it had been in the past.

Christian Horner Ron Dennis

He said: "This is a brand that we've been associated with for a very long time, but we actually had equity and involvement, I myself controlled the sales and marketing of that company in the early days and I was a shareholder in the company.

“It went through a variety of iterations, changes of ownership, and while the thread of history got pulled tighter and tighter, the current chief executive and I fundamentally disagreed about some things.

"I didn't share his view on his radical approach to sponsorship, which I felt was inappropriate for our brand, let alone his. There was a particular moment in Monte Carlo that I didn't particularly feel was positive. Plus that thread was taut, and the numbers declined over a period of time."

XPB.cc Fernando Alonso

Shortly before the end of last season, McLaren did unveil a new sponsor, the sparkling wine brand Chandon that is owned by the LVMH conglomerate, which also owns TAG Heuer, and Dennis insisted that deal was worth more.

He said: "One thing you may not have realised is that the LVMH group had within it another brand, which is the Hennessy Moet brand. I never give away numbers but I can tell you that our relationship under that brand is multiples more valuable than the financial situation with TAG Heuer."

Dennis also reiterated his stance that he would not start selling advertising space on his team’s cars at a lower rate just to bring in a higher number of partners.

Motor Racing - Formula One World Championship - British Grand Prix - Qualifying Day - Silverstone, England

He said: "I'm very robust on the rate card. I have an overview, as the chief executive of the group, where our revenue streams are and it's my job to predict where we are going to go.

"You don't need to be an Einstein to know that the environment for F1 and for sport overall is challenging, I don't think you've seen a new sponsor at Ferrari for two years for example. The worst thing you can do is get into a situation where you drop your rate card and everything spirals out of control.

"I have to steer and navigate with the commercial team and take a balanced view. I'm quite optimistic about the discussions that we're having, but I think it's just better to wait and see how we start next season.

“Do I lose sleep over it? No I don't. We are strong, very strong financially. The equity value of our organisation is now well over £1 billion and all of our businesses are profitable."

XPB.cc Fernando Alonso

What do you make of McLaren’s sports car business? Will this news help the fortunes of the F1 team? Leave your thoughts in the comment section below.
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