INTERVIEW: The hunt for McLaren dealers

HEAR that trembling? It’s faint, but it’s the sound of fear wafting out of boardrooms at Maranello and Stuttgart.

One can only imagine the Ferrari and Porsche bigwigs are flailing arms/planning efficiently in the way only Italians and Germans can when they know something big is brewing.

And worries don’t get much bigger than an all-new road car from the might of McLaren – especially one which Ron Dennis wants to be selling 4,000 of across the world by 2015.

And it’s not just one car either – McLaren plans a whole range which has Ferrari’s 458 and Porsche’s 911 firmly within its sights. Scary stuff for them, but seriously exciting for the rest of us.

Ron Dennis gave up mentoring Lewis Hamilton and the day-to-day running of his F1 team at the beginning of the current season simply because he wanted to lead the McLaren Automotive project from the top. As only Ron Dennis and his attention to detail can.

NEW FACTORY

A new factory, creating 800 jobs, is planned to be built alongside the current McLaren Technology Centre in Woking, Surrey. It is here where the spiritual successor to the iconic F1 will be built, a car that, according to Dennis, will be ‘the greenest most economical’ supercar on sale.

But an all-new car means an all-new dealer network is needed to go with it. With a brand as ferociously protective over its image as McLaren, the partners the manufacturer chooses to retail its car will have a lot to live up to.

To find out more about the plans for the brand’s worldwide network, Car Dealer Magazine secured an exclusive interview with the head of network development at McLaren, David Lumley-Wood.

The 37-year-old is currently travelling the world searching for dealer partners, but found the time to sit down and answer a few of our questions. Here is the interview in full…

How is the hunt for McLaren dealers going?

In short – our plans are shaping up really well. We have had a really positive and enthusiastic response to those with whom we have been speaking – they are absolutely endorsing our product, marketing and brand plans, and the fact that we are trying to come to market in a different way.

From the outset we have been very clear that we should develop our strategy in conjunction with dealers, actively incorporating their input, and their contribution has been invaluable. Rather than preparing a ‘master plan from HQ’ and then set out to hunt for dealers to fit our pattern, I have been spending a lot of time visiting the best dealers in the segment all over the world, and really looking at a model that will work for both parties.

What sort of dealerships are you looking for? Will they have to be built from scratch?

I do not believe that laying down a set format for all dealerships around the world is logical, effective or even desirable. As a small volume manufacturer we can work with each dealer individually to find a proposal that is cost
effective, meets both the brand and the dealer’s needs, is suitable for the local market, and is financially strong.

Would you be happy for McLarens to be sold alongside other marques?

Yes – provided it works for all concerned. Clearly, like any high value brand we would like to see that brand protected and clearly communicated, but all the potential dealers we have been speaking to have strongly endorsed that approach too. The rules of customer service and common sense should guide us here, rather than ego or dogmatic manufacturer standards

What sort of dealer requirements will there be in terms of manufacturer stipulations? Will you be imposing strict rules and regulations?

Clearly there will be some guidelines and requirements – McLaren is one of the most exclusive and valuable names in the industry thanks to our Formula 1 World Championships, victories at Le Mans, Can Am and in Indy Racing, as well as our remarkable history in road cars such as the McLaren F1 and the SLR.

That does mean that we have a clear picture of the McLaren brand values and attributes.  Anyone who has visited the McLaren Technology Centre in Woking will see that we do place a value on the quality and feel of the environment. The challenge is to translate that into brand requirements that are appropriate, commercially viable, and that work in a dealer environment.

Will you consider luxury car specialists seeking their first franchise?

If they can demonstrate that they would be the most appropriate partner and can meet our requirements, then yes.

Are you quoting return on sales figures to dealers?

No – we complete an individual business plan for each location to ensure that the return on the investment is good, and the cashflow and funding are solid. Return on sales is a really poor measure anyway – I hope one day to see the end of the focus on this KPI as an industry measure.

What sort of dealer numbers are you looking for?

We expect to launch initially with 30 to 40 dealers globally, expanding on that as the parc and product range grow.

What geographical areas are you targeting?

The cars will be globally homologated, and we will launch into all the key markets around the world.

What sort of staff will you be looking for?

I think if we select the right dealers with the credentials, professionalism and experience in their local market, and who really understand the McLaren brand, they will be best placed to determine their own staff. I would like to see all key staff at dealerships visit our facilities here at the McLaren Technology Centre to really get to understand our history and approach. I would also like to see dealers bringing customers to MTC for the same reason.

What funding will they need in place?

That will vary depending on the local market, the location, and the size of the opportunity. I am sure that all dealers will want to develop a proper business model to assess the return on the investment and the adequacy of their individual funding solution.  One size does not fit all.

Can you put a figure on the amount of investment needed?

As I say, that will vary based on a whole range of factors.  Our objective is to agree an investment with the dealer that shows a good return… if it does not make financial sense, we do not want
to do it.

What is the target market for the new car?

The target market will be buyers who will appreciate something unique in the traditional performance car arena. The car combines attributes which you normally think of as opposing – practicality and beauty, comfort and shattering performance, power and environmental credentials. Everyone here at McLaren is hugely excited about the fact that it will fundamentally shift the boundaries of the segment when it is launched – much as the original F1 did in its segment.

What sort of numbers will the average dealership be selling?

That is going to vary on the location. We are breaking away from the idea that there is a fixed average sales volume per location which drives coverage, and instead trying to shape individual dealer locations to suit the local market. We do have the concept of ‘Flagship’ locations which basically just means a slightly different dealership footprint set up for key higher volume locations.

What is the hope for total sales per year?

We will produce one thousand cars in the first year, 2011. The range will expand quickly in the years to come, up to between 4 and 5,000 – very much lower than the competitive segment. The plan is to offer a more exclusive product, with much higher performance in all aspects – power, efficiency, dynamics – and a much better customer experience than our competitors.

Will you (personally) be setting up network across UK or Europe too? America?

McLaren will not be operating any dealerships anywhere – we will leave that to the experts! But I am working on establishing dealer locations all over the world. The car will be available globally via the network of McLaren dealers

What is Ron Dennis’ vision for the McLaren dealership network?

As Chairman of McLaren Automotive, Ron is closely involved in all major decisions, and he’s therefore had detailed input into our retail plans.

Ron Dennis has said the McLaren Automotive revolution will stretch to how the cars are sold – what did he mean?

We have taken apart all the aspects of retailing and we are seeing how we can put together the best possible model. We are trying to get rid of some of the old inefficient or low value activities, and work a lot smarter. It’s a benefit of the lack of legacy processes – we can build anything from scratch.

We are adopting simple core philosophies around keeping demand high, reducing the cost of ownership through service and parts pricing, and trusting our retail partners to work with us. We are also building in some best practice from outside the sector, in particular around customer care.

Will there be anything special as part of the buyer experience? I seem to remember a model being delivered with every McLaren F1. Is there anything like that in the pipeline?

That sort of thing is all the work in progress we are developing alongside dealers to get the customer experience right. I am certain it will be something special, and we do have a number of exciting potential plans.

What is McLaren Automotive’s ultimate goal?

Our goal is to design, build and supply the world’s best high performance sports cars that offer new technologies and a new ownership experience.

How did you get this job?

I trained as engineer in order to join Army, then qualified as accountant. Ten years ago I moved into retail, then into motor industry: first as Network Development Manager for Audi UK, then Network Business Manager for MBUK, finally to McLaren in 2008.

I can genuinely say that I am doing the job I dreamed of – it’s the most challenging, interesting, demanding and exciting opportunity I can imagine. It’s a phenomenal brand developing the most incredible cars, with the opportunity to help shape the business from the outset. A dream job!

Exclusive by JAMES BAGGOTT

This feature first appeared in Car Dealer Magazine. Make sure you get to read exclusive interviews like this before anyone else by subscribing (it’s only £17.24 a YEAR)!