Since Lamborghini created the first modern supercar with the Miura in 1966, the genre has given the us some of the most memorable and iconic cars ever made.
However, the allure of the shiny exotic steel has a dark side.
For every Ferrari, Lamborghini or McLaren you hear about, there are dozens more failed ventures.
Anyone remember Gumpert or Bricklin or Cizeta-Moroder?
In fact, even Lamborghini has suffered more than its fair share of financial turmoil in its 50-year history before coming under Audi-ownership in 1998.
In that span, the Sant’Agata, Italy-based company went through half a dozen ownership changes. During the 1970s, Lambo spent years in receivership after failing to meet financial obligations.
Recently, Lamborghini CEO Stephan Winkelmann sat down with Business Insider at the opening of the company’s new New York showroom at Manhattan Motorcars.
Winkelmann touched upon several subjects including the challenges upstart supercar makers face and the role technology plays in the market segment.
On why it’s difficult to be a small super car start up:
It’s an incredibly difficult market segment to survive in, the Lambo CEO told Business Insider.
But… “If you have a partner who is in the car business, you might have a chance,” Winkelmann said.
Lamborghini is part of VW Group’s Audi subsidiary, while Ferrari has spent most of the past forty years under the Fiat corporate umbrella.
If you are willing to enter the supercar business, here are some of the facts of life newcomers will have to accept, according to the Lambo Winkelmann:
You or your investors have to be willing to make a large initial investment
You have to accept that you are likely to fail early on
You have to accept you have a small business
You have to accept your small business is spread around the world
You have to accept market volatility
According Winkelmann, the supercar business is highly volatile because the cars being sold are “add ons.” In other words, the products companies such as Lamborghini are selling are considered “wants” not “needs.”
“It’s about recognizing this a dream car,” Winkelmann said. “And if the moment isn’t the right one — people don’t buy.”
Lamborghini experienced this firsthand during the height of the global economic crisis at the end of the last decade.
“We experienced this in 2008-09 when sales dropped from one day to another and into no mans land,” he said.
On the challenges technology poses for small super sports car companies:
Winkelmann touched on the pressure the increasing levels of in-car tech places upon small super car makers.
“You have accept that technology is getting more and more expensive,” he said. “And people are always waiting for the newest tech.”
“People expect [tech gadgets] on same level as what the premium manufacturers [Mercedes, BMW, Audi etc.] are giving its customers.”
As a result, an upstart super car maker would be forced to meet those consumer expectations.
“You have to continuously invest in [tech] — even if you have not completely absorbed your initial investment.”
Even for established brands, the adoption of new technology is a large financial burden.
“As far as [infotainment and in-car technology] goes, if you are a huge brand, it’s very expensive, if you are a small one, it’s almost impossible,” Winkelmann said.