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McLaren aiming to be a billion dollar business
Posted By: James Allen  |  23 Sep 2011   |  4:34 am GMT  |  25 comments

Ron Dennis was on confident form at the launch of McLaren Automotive Asia in Singapore today. Taking the stage with his local partner, entrepreneur Peter Lim, he said that his vision for McLaren is that within 10 years F1 will be only 10% of McLaren’s turnover and he will make it a company which measures its turnover in the billions of dollars.

Among confident predictions of how McLaren will press on into the Asian market, he also confirmed that the USA is going to be McLaren’s leading market at around 42% and that it is likely to start a racing programme in the USA to support its sales drive, “You will see some form of McLaren presence in some form of motorsport in America,” he said.

McLaren Automotive’s plan is for 42% of the cars to sell in the USA, 35% in Europe and the rest in Middle East and Asia. Although he didn’t speak at the event, Talal al Zain, the powerful CEO of Bahraini investment vehicle Mumtalakat, a key McLaren shareholder and partner in its push for growth, was sitting on the front row.

Dennis said that in five years time, McLaren will carefully examine the possibility of an IPO in the various markets. But he said that he will encourage shareholders not to seek an IPO, but rather to take money as dividends.

“My ambition for the group is that in 10 years F1 is bigger, but is only 10% of our business,” he said. “Growth is not just automotive but also Applied Technologies. Planning went in last week for two new factories. We intend to have turnover in the billions and we will achieve it,” he said confidently.

Asked how his plans might cope with the looming financial crisis Dennis said, “No company can say ‘I’m immune to what’s happening in the world’. But I am averse to debt. We have a model which is driven by an out of balance ratio of equity to debt. But any company which doesn’t react to the markets is foolish. Asia isn’t immune to a global slowdown, but it is pretty robust.”

McLaren’s analysis of the high end sports car market is that before the 2009 slowdown this sector was selling 140,000 cars a year and that when new cars come in the market grows. ‘It’s about creating more choice,” said Dennis. The slowdown took the market down to 80,000 cars a year and today it has climbed up to 100,000. McLaren aims to have a 4% market share of the high end sports car market, which Dennis described as “conservative”, while acknowledging that the market is dominated by Ferrari.

“Our ambitions are driven by the desire to be exclusive,” he said. “When we are fully mature we will be making 4,000 cars a year. There will be 3 models and variants of them, different segments of the price market.”

Dennis explained that it’s not good to have waiting lists in excess of 1 year because customer becomes frustrated. However if the waiting list is less than one year the value depreciates quickly. Value is held up by waiting lists. At the moment the waiting list is two years, which he described as “not good”.

Building a brand that people admire is one thing, building one that people love is quite another and its something very few companies achieve. It will be interesting to see how McLaren evolves in this area.

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Never been a Ron Dennis fan, but it went into comtempt when he had had Alonso’s physio by the ear dragging him down the pit lane in Hungary. All due resepect to his success, but he’s always been pompus and as dull as dishwater to me, the most exciting thing about Dennis’ F1 tenure was the occasional pic of his ex wife in the paddock…and even that ended…


£175k av. car sale x 4000 cars = £700m. That’s already well over a billion dollars.

that is not including aftersales, hospitality, their f1 business, applied technologies and their recent foray into the business world with their gsk partnership.

mclaren is already big business


You forget that the “forecourt” price doesn’t all go to McLaren, as much as 30% will go to the retailer.


McLaren ARE the retailer are they not? They’ve already set up direct dealerships in London and other places, to sell their own cars.

And the One Hyde Park dealership is open by appointment only. I know this because many times I’ve wandered past it and had my nose pressed up against the glass at the lovely MP4-12C and the F1 cars they’ve got on show…


Correct, but the business plan and forcasts for McLaren Automotive will have to include the profit they would expect on each unit sold, both in percentage terms and £’s for the Uk & $ for the Global Markets. Anyone lending a business money would want this information.


Yes, but think how many 12C’s are actually 175k? None probably; they’ll all be optioned up to 20% more. Also, the next Mac is the top line car, which is yet another 100k, so the billion dollar turnover is well in sight.


No to sky


You mean they aren’t already?


Ron first needs to make his business profitable I would argue as I think his car making has thus far been loss making!

Think they turn over something like £300m so he will need to sell more than 4000 cars per year to get above £1bn

Don’t get me wrong they have achieved a lot but compared to Ferrari, Lambo, Porsche etc. (who all have major car manufacturers in the background) they are small fry. Sure time will tell but I would not bet my money on it, especially since this market will go through a rough time over the next 5 to 10 years.


Just when F1 is benefiting from being returned to the racers from the manufacturers, a racer decides to move in the opposite direction! Ah, well.

On James’ final point, admiration can be virtually instant but the love takes much longer; normally with sports cars long enough for there to be tradition behind it. It will be interesting to see if McLaren’s racing tradition transfers across.

What do you reckon the chances of J P Montoya, Esq being one of the American customers?


Here comes a McLaren ALMS car! Not to promote another series, but were all motorheads. ALMS really delivers a nice contrasting feel to strict and costly F1 at track experience and anyone in North America should visit a race on an F1 off weekend.


Was Margaret Whitmarsh there? Oh sorry Martin Whitmarsh, it’s just that some Journos’ are comparing his ‘The extra Sky revenue is worth the loss of some free-to-air viewers’, to Thatcher’s ‘Unemployment is a price worth paying’ quote.


.are they?


Dennis is a great ambassador for Britain and British values. Why has he not got his knighthood yet?


I think Max Mosely deserves one. Just hope he lives to see Mclaren to become massive.


Bright stuff and great vision from the ever humble Ron Dennis.

You need to take your hat off to the guy who achieved extra-ordinary stuff with McLaren and I think that he represents a much bigger threat to Ferrari now that he left F1 than when he was running his team.

P.S : btw, great photo with your new friend Joe Saward


Good luck Ron, I hope it comes off.

The time to invest is when the market is down, so you are ready when it picks up. This is just what UK plc needs and hopefully more of the private sector will try to emulate McLaren.


Shoot!!! It appears Ron Dennis has the Arsene Wenger bug too for it’s all about the turn over & forget about titles & the fans!

Oh well, maybe they have a point for businesses exist solely to make profit.

This also appears good news for all Mclaren drivers & test drivers for after their F1 careers, they will head over to the US to drive for the Mclaren Nascar.

Aah wish I had a piece of that Mclaren pie, I swear, I would never loot again!


MLSE (Maple Leafs Sports Entertainment) is the bane of any and all Maple Leafs fan. They’ve also turned two other franchises (The MLS’s Toronto FC and the NBA’s Toronto Raptors) into perennial losers. Someone at my work this week was hawkin’ pre-season gold Leafs tickets for $100 each, and said the printed price was $350 each!! For pre-season!!! It’s ridiculous.

McLaren hasn’t won a constructors title since 1998 (yeah, know about 2007 and all) … and in the modern era with only a few really bad years they’ve always been amongst the top 3 teams. But 2nd and 3rd don’t cut it. Even the Leafs managed to win the odd Stanley Cup back when there were only six teams competing for it!


We have such a business in Canada – the NHL team called Toronto Maple Leafs. Haven’t won a title in 5 decades, haven’t qualified for playoffs in 5 years, an yet they enjoy huge corporate support, sold out arenas at F1 level ticket prices, and have spun off the brand into various revenue streams. #1 franchise value and no titles to speak of for anyone to remember whis alive today. A little like Ferrari before Schumi came in.

My point? The business model for non championship rich team is certainly there and proven to be quite successful revenue wise. I just don’t think McLaren is that type of team. At least I would hope not. They haven’t done anything to make us believe that.


Any mention if there is F1 engine building programme?


No, but one of their guys explained to me that they design the road car engine in house and it is built for them by Ricardo in the UK. The engine will appear in other cars.


Is this not a flaw in McLaren’s strategy? Ferrari dominates the market space and it design-builds the chassis and engine. If McLaren want to expand this market, surely it to will need to start building its own engine.

The other thing Ferrari are masters at is after-sales service, customers buying track time at Marenello, etc.


Going public would be the worst thing for them, or for any similar type of niche company involved in motorsports and high end sports cars.

The pressure from shareholders & analysts (*shudder*) to achieve specific growth targets could force them to stray from their original vision and ruin the McLaren brand in the long term at the expense of short term profit.

The pressure for targeted growth may inhibit them from undertaking risky research programs or product development decisions. There’s also the risk of a competitor (FIAT?) quietly buying a bunch of their shares and exercising control.

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