Is Lamborghini too extreme for its own good?

Published: 03 February 2012

Ferrari and Rolls-Royce recorded their greatest ever sales in 2011, Bentley’s volumes are back to pre-recession levels, but what about the world’s self-proclaimed super-sports car company, Lamborghini? Well, 2011 sales were up 26% on 2010, but 1602 sales is still a long way short of Sant’Agata’s record: 2430 supercars in 2008.
This raises a very pertinent question: is Lamborghini too extreme for its own good? Ferrari has expanded its range with a convertible which could comfortably star in a remake of Dallas, and a four-seat estate car that owners – make that owner’s gardeners – could use for a trip to the tip. Rolls-Royce now ‘slums’ it at the Ghost’s £200,000 price point, Bentley is undergoing a Continental shift by introducing a V8 GT.
Lamborghini’s latest model is the Aventador, a genuine super-sports car constructed of F1-style carbonfibre, with a racing car suspension and with an all-new V12 engine producing 690bhp – more than any Ferrari road car to date. You need to be flexible to get into it, a periscope to see out of it, wide streets to drive it and big balls to max it: the Aventador devours 0-62mph in 2.9sec, and tops out at 217mph. A rich man’s relaxed runabout – like a Bentley, Rolls or Ferrari California – it most certainly is not.
I’m not about to argue for Lamborghini to go soft: Gallardos and the Murcielago SV occupy three places in the top ten drives of my life. Their sensory overload makes a Veyron feel like a Golf 4Motion; they scratch a millionaire car enthusiast’s itch like no other supercar. But their very nature makes them very rare. 

Lamborghini in 2011

The super-sports car market in which Lamborghini operates totalled 26,000 sales in 2011, according to Lamborghini president Stephan Winkelmann. So Lambo secured about 10% of the segment, which it defines as cars with two-doors, lashings of horsepower and a six-figure asking price. In 2007, the segment peaked at 35,000 units; at its lowest in 2009, it slumped to 20,000 units.
‘The road to recovery is longer and tougher than expected,’ Winkelmann told me over lunch. ‘We have more brands and more models to compete with. And Lamborghini is a niche within a niche. We always want to be more extreme than the rest, which means you sell fewer cars.’
‘The investments are high and the volumes are low. If times are tough, your profitability is put at risk. Other brands have three or four models, we have two.’
Reading between the lines, 2011 was Lamborghini’s third consecutive year of losses, but there are mitigating circumstances. Aventador production only began in the summer, meaning Lamborghini was actually a one-model company for much of the year.
With big R&D investments to recoup on Aventador and to prepare the Gallardo replacement, Lamborghini has shelved its 2006 objective of being the world’s most profitable super sports car maker. Winkelmann would like to be top dog because ‘we want to be stable; we want to be capable of delivering good average sales so we can invest in the company’s future’. Gone is the hubristic notion of dominating the external market, replaced by a goal of internal self-sufficiency.

Aventador and the future

The Aventador has started with a bang: Sant’Agata has built 500 already (the Murcielago averaged 409 sales a year over a decade), and the waiting list stretches out to 18 months.
Lamborghini’s flagship bull costs £242,280 in the UK, yet it’s plenty exotic and almost as quick as a £1-million Veyron. Is it too cheap? ‘I know, I know,’ laughs Winkelmann, energised by the question. ‘There’s a position for every car, there’s a history of pricing. We are the most expensive of our peers like Ferrari, and to those who say we could have charged much more, I say we are looking to the long-term: we have to be consistent and credible for our customers and dealers.’ 
Regardless of the Aventador’s appropriately fast start, Lamborghini needs the old-world economies to buck up, and bankers’ bonuses to get off the front pages and back into bank accounts. The American and European markets matter most; while China might be the wider industry’s profitability powerhouse, it isn’t for super-sports cars: just 2000 were sold there last year.
So is the answer to dilute Lamborghini’s extreme nature? Backed by Audi – a company with record volumes and record profits, largely thanks to China –Lamborghini can afford to play the long game. And with the VW Group’s portfolio now including Porsche and cars like the 911 and R8 catering for different tastes, Lamborghini will remain true to its roots and to its extreme DNA for the foreseeable future. Long may it continue.

By Phil McNamara

Group editor-in-chief of CAR magazine