McLaren Doubles Car Sales, Makes Over £600M
McLaren has revealed a record-breaking year in respect of car sales and overall financial performance.
Profit before tax of £9.2M from an annual sales revenue of £649.8M in 2016 gave the British sportscar manufacturer a fourth consecutive year of profitability in only six years, since start of sales in 2011. This was an increase in profit before tax of 70% compared to the £5.4M reported in 2015.
Operating profit of £65.8M in 2016 was the company’s highest ever, standing at 10% of turnover and representing a 180% increase over 2015. 2016 was underpinned by record sales, with a total of 3,286 cars purchased; this was a 99% increase over 2015 and is said to have exceeded the company’s own expectations by almost 10%, with all geographic regions achieving sales growth.
“The positive financial performance in 2016 was underpinned by a 44% increase in sales revenues and is further proof that McLaren Automotive’s growth plans are both achievable and sustainable,” said McLaren CEO, Mike Flewitt. “Investment in R&D and future product during the period of £129.1M – 20% of turnover – reaffirms our commitment to the Track22 Business Plan that will produce 15 new models or derivatives by the end of 2022 and the focus going forwards will be on successfully delivering these new products and managing continued profitable growth.”
The Super Series models also made an impact, specifically the 675LT Coupé and Spider models. Having both sold out in a matter of weeks, the limited production, higher-performance derivatives of the Super Series started production in mid-2015 but continued through 2016. In total, 1,255 Super Series cars were sold in 2016.
In March 2017 the second-generation Super Series, the new 720S, was launched. The new car generated immediate customer interest and some 1,500 orders are claimed to have been taken to date. A new convertible Sports Series model, the 570S Spider, was announced earlier this month and made its world debut this week at the Goodwood Festival of Speed.
“The McLaren Automotive business continues to perform strongly, with 2016 returning a fourth consecutive year of positive financial results,” said McLaren’s chief financial officer, Paul Buddin. “Profit before tax was up by 70% to £9.2M, from our highest-ever operating profit of £65.8M, an increase of 180% over 2015. These results were driven by vehicle sales totalling 3,286 in 2016 – 99% up year-on-year and another record – and significant growth in revenues from McLaren Special Operations (MSO) and McLaren Automotive Aftersales operations.”
Geographically, in 2016 North America continued to be McLaren’s single largest market with deliveries of 1,139 cars, a 106% increase over 2015. Europe ended 2016 selling 996 cars in total, an increase of 153%, whilst 228 cars were sold in China. The Asia Pacific region grew by 90% while the newly combined Middle East, Africa and Central and South America region grew by a notable 69%. In addition, the global footprint of the McLaren retailer network expanded in 2016, with new dealer facilities opening in Bristol in the UK, Boston and Palm Beach over in America, the Gold Coast in Australia and also Fukuoka in Japan.
In parallel with regular vehicle sales, McLaren also saw growth in non-car-related activities. For example, McLaren Special Operations (MSO), the company’s bespoke division, posted an increase in revenue of 147%, while the Aftersales function recorded turnover growth of 37% for the year.
“2016 was an extraordinary year for McLaren Automotive, with a near-doubling of sales and the completion of our 10,000th car,” commented McLaren’s executive director of global sales and marketing, Jolyon Nash. “While we will never again see another jump in sales volume of this magnitude, the reception to the new 720S and the new 570S Spider has been incredibly positive and initial orders for both are beyond our expectations.”
During 2016, McLaren also invested £129.1M in new projects, across the Sports Series, Super Series and Ultimate Series product families. The Track22 Business Plan will see McLaren investing 20% of its turnover in R&D activities over the period of the plan. This will take the company towards its objective of producing more than 4,500 vehicles annually by the end of 2022, with at least 50% of these cars featuring hybrid powertrain technology. The Business Plan also includes the development of a fully-electric powertrain for a concept car to evaluate its possible use in a future Ultimate Series. In 2016, the early prototype stages of the development work commenced.
As part of its R&D output, McLaren announced in February 2017 that it will be constructing a new Composites Technology Centre (MCTC) which will be responsible for the development and manufacture of its Monocell and Monocage carbon-fibre chassis. Located in Sheffield, the MCTC project is a partnership between McLaren, the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) and Sheffield City Council. Combined investment of approaching £50M will create the facility and more than 200 jobs. When commissioned and running at full production from 2020, the MCTC is expected to deliver cost savings of around £10M annually compared to today.