McLaren sales and profits up, P1 sees big demand

McLaren saw its sales, turnover and profits rise last year as the UK-based sports car maker banked an operating profit (before tax) of £20.7 million (Rs 203 crore) and recorded margins of 4.4%.

The company claims its performance is "considered unprecedented in today’s motor industry” because brand sales only began four years ago.

In 2014, the company sold 1,649 vehicles, up 18% on 2013, when 1,400 cars were sold. Of those, 248 were P1s, which retailed from £866,000 (Rs 8.52 crore). However, three-quarters of the P1s were specified highly enough to drive the average purchase price beyond £1m (Rs 9.8 crore).

This is thought to account for the big jump in McLaren’s 2014 turnover, which rose to £475m (Rs 4,675 crore) from £285m in 2013. It also drove operating profit up by 68%, from £12.3m to £20.7m.

Although profits remain modest in automotive terms, investment in research and development is rising steadily, according to the company. McLaren invested £67m (Rs 659 crore) in 2013 and £91.8m (Rs 903 crore) in 2014. This year the investment is expected to rise to £120m (Rs 1,181 crore), or some 20% of the company turnover.

It’s an unusually high percentage for the automotive industry, although it reflects the considerable investment in the new Sports Series range, which is due to go into production later this year.

In the medium term, McLaren says it will drive up sales to around 4000 units by 2017 and 4200 in the two subsequent years. This will be achieved by rolling out at least six different models.

Company sources say the company expects to sell around 2,500 Sports Series models annually and 1,500 Super Series models.

The balance is expected to be made up of very limited-production Ultimate Series models.

Overall production at McLaren's Woking HQ is expected to be capped at about 4,000 units per year for the foreseeable future, a level that is seen as sustainable over time.

McLaren chief executive officer Mike Flewitt also insisted that McLaren would never consider building an SUV, "no matter what competitors might be doing".

Commenting on the 2014 year-end performance, Flewitt said: “These latest results highlight that McLaren Automotive continues to push boundaries and are testament to the energy and professionalism of the teams in Woking and around the world, including our retail partners and suppliers. We have seen the third consecutive year of growth for the brand, and a second year of profitability. Since the opening of the first retailer in June 2011, McLaren has established a world-class network of retailers, with 14 key locations added in 2014. Add to this a range of groundbreaking models, to which four have already been added this year, and 2015 looks set to bring another strong result for McLaren.”