Lamborghini’s CEO isn’t too worried about the carmaker’s future. Here’s why
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Lamborghini's CEO isn't too worried about the carmaker's future. Hither'south why
As the globe struggles dorsum to its feet, Stefano Domenicali believes that Lamborghini will feel a brusk-term slowdown, with full recovery past early adjacent yr.
Lamborghini CEO Stefano Domenicali flanked by the Urus, which has in only a few years gone on to form the courage of Lamborghini'southward sales. (Photo: Lamborghini)
23 Jun 2022 06:30AM (Updated: ten Jul 2022 03:40PM)
Stefano Domenicali, the CEO of Italian sports car manufacturer Lamborghini, doesn't seem like a man who's also worried well-nigh the time to come. A future, that, by its ain admission in a recent FY2019 results press release, is rife with "imponderables remaining due to the current Coronavirus situation, it is yet besides early to give a detailed forecast of impacts on business evolution in 2020".
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Domenicali'due south relaxed mood, or inasmuch as we could glean during a video call as he sat in forepart of a affiche of the Sian FKP 37, the marque'southward latest hypercar, was probably a result of Lamborghini's incredibly strong showing in 2019.
Its volume swelled past 43 percent to 8,205 units sold, of which over one-half of that number was contributed past its first SUV in nearly three decades, the Urus.
Of form, he might also be buoyed by news of Lamborghini's rivals Aston Martin and McLaren having come across a recent spot of bother. The former carmaker had to be bailed out by billionaire Lawrence Stroll, having undergone a recent leadership change which saw CEO Dr Andy Palmer (the key architect of its recent transformation) ousted in favour of Mercedes-AMG boss Tobias Moers. To top it off, Aston Martin is also shedding 500 jobs (roughly a fifth of its total workforce) in a bid to slash costs.
As for McLaren, its Formula One team has been in the doldrums for the by few years. It has been dealt a massive blow over the temporary cessation of racing activities. Information technology has seen its road car sales plummet every bit a result of the pandemic, and is almost to lay off a quarter of its employees, or around 1,200 people.
Coming back to Lamborghini, things are slightly more optimistic. It has not (yet) announced whatsoever task cuts or major restructuring, and while it did close the factory for seven weeks in the interest of public health and the safety of its employees (ane of the start carmakers to exercise so, Domenicali proudly points out), it still has a healthy order book.
And despite the inevitable delivery delays brought about by the cessation of its production lines, Domenicali told u.s. it hasn't received any cancellations.
However, despite that silver lining, things aren't exactly back to normal at Sant'Agata, Bolognese. Not yet, anyway.
At the time of the manufacturing plant resuming operations at the starting time of May, its capacity was only at effectually 80 per cent, though at the time of writing, it should already be at full chapters.
However, while the gears are turning and Lamborghini's magnificent sports cars are rolling out the door again, the new normal is zilch similar the quondam normal.
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Domenicali tells of how Lamborghini has used the recent period of closure to review its practices, with regard to social distancing and equipping its product workers with the necessary protective equipment. In addition to that, half of its (not-production line) employees are still working from dwelling for the foreseeable hereafter.
But life at Lamborghini is still roaring ahead. Domenicali told united states, "Our strategy has not changed at all. Nosotros want everyone to realise nosotros're not stopping, nosotros're moving alee. From now until the end of the year, the only thing that'southward going to be unlike is how we present our new products."
What he's speaking of is its recent unveiling of the Huracan Evo RWD Spyder, which was conducted online through an augmented reality web app. Despite not being able to get up shut with the automobile, viewers could still take a virtual tour of the machine, fifty-fifty getting as close equally being able to see the switchgear on the car's dashboard.
It's not sure how much sales interest Lamborghini was able to drum up through those ways, merely it's likewise tempting to presume that a carmaker in its market segment is, to put it crudely, recession-proof, given how the uber-wealthy are less adversely affected by economic downturns.
Domenicali, yet, despite his general optimism, is a flake more than cautious. "Nosotros volition demand to see what our order intake will be in the next few weeks, because our dealers are likewise opening up again, then we'll encounter what the situation is," he said.
He continued, "Generally speaking, for our market segment, it doesn't endure a softening of demand, but of course, you take to be in the right mood to buy certain products. Y'all cannot expect people wearing masks... to become purchase jewels, or to buy the cars we are producing. So, in the short term, I'm expecting a moment of slowdown, merely I'm hoping that within the second half of the twelvemonth, at the beginning of side by side year, the situation volition meliorate."
Where almost carmakers don't take upper limits on the number of cars information technology produces in a twelvemonth, Lamborghini does. It has to carefully balance volume, profitability and value for its customers, nigh of which hinges on handcrafting (Domenicali stressed this multiple times during our interview) and the extremely high degree of personalisation available on its products.
Domenicali explained, "What I've always said is nosotros are not a volume-oriented business, something fifty-fifty more than true today than before. Therefore, the only matter that we need to see and adjust to is what our new demand will be after this crisis. So now, fifty-fifty more, exclusivity every bit a strategy will be more than important. If nosotros over-produce, that would exist a disaster."
This is a sentiment echoed in Maranello, the home of Ferrari, and a town just one-half an 60 minutes's drive away from Sant'Agata. Old CEO Sergio Marchionne once famously said the company's mantra is to build precisely i less auto than the marketplace demands.
"Realistically speaking, 7,500 or viii,000 cars a year as a basis is not wrong," said Domenicali.
"What I've e'er said is nosotros are non a volume-oriented business concern… So now, even more than, exclusivity every bit a strategy will be more than important." – Stefano Domenicali
Ferrari, past comparison, sold just over x,000 cars terminal yr, surpassing the five-figure marking for the first time in its 70-yr history.
Both companies apply tactics which would seem topsy-turvy and counter-intuitive to most other manufacturers, in that instead of growing supply, which would ironically harm them in the long-run, they effort to grow demand.
It would seem this strategy is perfect for a postal service-coronavirus world. Because need from ultra-wealthy buyers hungry for screaming sports cars always exceeds the number such manufacturers can supply, information technology might never face the problems faced by others.
But ane also has to acquit in mind the post-coronavirus world is safely distanced, which is bad news for a manufacturer like Lamborghini. I doesn't splash out millions on a new sports car simply based on some photos and a virtual reality tour.
Domenicali called the current crunch "constructive, not subversive", but he also did say "it has forced an evolution that we demand to have."
While Lamborghini has indeed picked upwardly several lessons from this crisis – whether internally from telecommuting or externally in new means of communicating with customers and its fan base – Domenicali acknowledged at its heart, Lamborghini is a man brand.
And by that, he meant social interaction is a key part of the Lamborghini experience, exist it the mitt-craftsmanship that goes into each of its vehicles, or the numerous engagement activities it organises for owners and prospective buyers.
He said, "I don't concur with people who say life volition now be different, because we'll get used to speaking through screens. I assure you that people want to go dorsum to come across each other in real life."
Domencali concluded, "We don't forget that we produce physical cars that are supposed to give concrete emotions. What we're doing today is making certain that what is digital has to feed the appetites for our physical products, a teaser for the 'dessert' that is coming. So, when nosotros go back to the rails, to the street, to driving, to events, to a social life. This is something that will stay considering information technology's a cadre value for our make and our cars."
"What we're doing today is making sure that what is digital has to feed the appetites for our concrete products, a teaser for the 'dessert' that is coming." – Stefano Domenicali
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