Tweet
INTERVIEW: Victor Muller, CEO of Spyker Cars N.V.
Netherlands-based Spyker Cars is a maker of high-end sports cars that is attempting to rebuild its business after an expensive involvement with Formula 1 that saw its losses balloon. As well as hauling itself back on to an even financial keel, the firm is also working on new products and raised volume. just-auto editor Dave Leggett interviewed the CEO, Victor Muller, on behalf of Lotus Engineering's proActive.
DL: How is business this year?
VM: We have seen a steady improvement and return to normal trading circumstances in the first quarter and we expect that to continue to improve through this year.
DL: What's behind the large loss (EUR72m) the company made last year?
VM: Clearly that's our involvement with Formula 1 - we ran into massive liquidity problems as a result of Formula 1. It dragged the rest of the business down and in the end we didn't have money to buy parts for our cars and production dropped like a stone as a result.
We were almost in the black in 2006 and 2007 should have been an improvement, but Formula 1 changed all that.
DL: What went wrong with your Formula 1 involvement?
VM: We did not manage it properly. It wasn't like we had the wrong ingredients…we just did not manage it properly. You can see with the performance of Force India - the buyer of our team - that even with the addition of US$50m budget, they still perform no better than we did. That shows how difficult it is.
DL: Who owns Spyker?
VM: We are a public company (listed on Amsterdam Exchanges) and there are four major shareholders. One is Vladimir Antonov, a new shareholder who came in at the end of last year. He's a Russian banker who is very committed to the company and a keen car collector and financial investor. He has 30% of the stock. Some 25% of the stock is in the hands of government owned Abu Dhabi investment company Mubadala (which also has 5% of Ferrari).
Another investment company, Gemini, has 10% and I also have 10%. So collectively, the major shareholders account for 75% of the company's ownership. The rest is in free float.
DL: What's the ideal production volume for a company like yours making exotic high-end sports cars?
VM: The ideal volume is what the market demands minus one. In 2006 we produced around 100 cars and we intended to produce around 150 last year. Of course last year we did not get anywhere near that number because of the trouble that we ran into.
But we are seeing a tremendous increase this year over last year.
We could easily go to 250 cars a year within the existing production infrastructure so there is no reason that we wouldn't aim to make that many if we can sell them.
DL: You have plenty of capacity then?
VM: Yes, plenty.
DL: Given the financial problems you have had and the disruption to production, are you confident that you can maintain loyalty from your customer base?
VM: Amazingly, you could say, we still have a very loyal customer base. We have lost a handful of dealers but a lot of new dealers have joined us. What really doesn't help is the worldwide financial crisis that we are in, which will find its way into consumer spending. But our customers are, relatively speaking, not hit so much by that crisis.
DL: I guess your customers are fairly high net-worth individuals?
VM: We estimate on average US$50m.
DL: Where are they from?
VM: 50% are in America, 50% outside America. When the SSUV four-door four-wheel drive car comes we expect that there will be a shift, let's say to the new economies - Russia, China and also the Middle East, because that's where that car will be going.
DL: Making exotic sports cars isn't an easy business to be in and you don't need me to tell you that. What attracted you to it?
VM: It is a phenomenal challenge and I have always tremendously enjoyed challenges and little did I know just how challenging it would be…but it was all self-inflicted because I decided with the board that we should go into Formula 1. Obviously we did not manage that properly and paid the price. However, building exotic sports cars is still a tremendously nice and attractive business and when we get our new products on the road - the Aileron C-line and D-line SSUV - then we can demonstrate that this business is not only a challenging business but one that is also a nice business from a shareholder point of view.
DL: What is the basic company strategy for Spyker Cars?
VM: The basic strategy is to design and develop timeless sports cars. We are not going to make any new-edge designs or do things that might be considered out-of-date in five years. We want to control our distribution very carefully and we believe that there are three things that are really important to building our brand: consistency, consistency and consistency. It is very, very important to have a consistent brand image.
We also focus on a limited number of markets in our strategy and we are also dedicated to racing and especially GT2. Of course F1 was a great way to promote the brand but that, unfortunately, was short-lived. GT2 and Le Mans are part of our strategy.
DL: What are the core values in the Spyker brand?
VM: We have five brand pillars: heritage, design, craftsmanship, performance and exclusivity. Those are the five core elements that constitute the Spyker brand.
DL: From a customer perspective, what should mark a Spyker out from an Aston Martin or Ferrari?
VM: The exclusive element is important and the hand-built element is very important, too. The other cars are mass-produced by comparison. And the aviation heritage is something that is reflected in the exterior design and the interior design.
The customer is eager to buy Spyker because it is something else; he wants something different, more exquisite, more exclusive and more hand-built. We are not competing with Ferrari or Aston Martin. When you have made your first million pounds then you go and buy a Ferrari, not a Spyker - not yet. That will take quite some time.
Typically a Spyker buyer already owns or has owned well-known brand supercars and wants something that is different from that experience. We are on average the seventh car in their collection.
DL: What models do you see as key to Spyker's future development?
VM: C8 Aileron which we showed in Geneva last March. And the Peking-to-Paris D8 SSUV - production of which starts in 2009.
Netherlands-based Spyker Cars is a maker of high-end sports cars that is attempting to rebuild its business after an expensive involvement with Formula 1 that saw its losses balloon. As well as hauling itself back on to an even financial keel, the firm is also working on new products and raised volume. just-auto editor Dave Leggett interviewed the CEO, Victor Muller, on behalf of Lotus Engineering's proActive.
DL: How is business this year?
VM: We have seen a steady improvement and return to normal trading circumstances in the first quarter and we expect that to continue to improve through this year.
DL: What's behind the large loss (EUR72m) the company made last year?
VM: Clearly that's our involvement with Formula 1 - we ran into massive liquidity problems as a result of Formula 1. It dragged the rest of the business down and in the end we didn't have money to buy parts for our cars and production dropped like a stone as a result.
We were almost in the black in 2006 and 2007 should have been an improvement, but Formula 1 changed all that.
DL: What went wrong with your Formula 1 involvement?
VM: We did not manage it properly. It wasn't like we had the wrong ingredients…we just did not manage it properly. You can see with the performance of Force India - the buyer of our team - that even with the addition of US$50m budget, they still perform no better than we did. That shows how difficult it is.
DL: Who owns Spyker?
VM: We are a public company (listed on Amsterdam Exchanges) and there are four major shareholders. One is Vladimir Antonov, a new shareholder who came in at the end of last year. He's a Russian banker who is very committed to the company and a keen car collector and financial investor. He has 30% of the stock. Some 25% of the stock is in the hands of government owned Abu Dhabi investment company Mubadala (which also has 5% of Ferrari).
Another investment company, Gemini, has 10% and I also have 10%. So collectively, the major shareholders account for 75% of the company's ownership. The rest is in free float.
DL: What's the ideal production volume for a company like yours making exotic high-end sports cars?
VM: The ideal volume is what the market demands minus one. In 2006 we produced around 100 cars and we intended to produce around 150 last year. Of course last year we did not get anywhere near that number because of the trouble that we ran into.
But we are seeing a tremendous increase this year over last year.
We could easily go to 250 cars a year within the existing production infrastructure so there is no reason that we wouldn't aim to make that many if we can sell them.
DL: You have plenty of capacity then?
VM: Yes, plenty.
DL: Given the financial problems you have had and the disruption to production, are you confident that you can maintain loyalty from your customer base?
VM: Amazingly, you could say, we still have a very loyal customer base. We have lost a handful of dealers but a lot of new dealers have joined us. What really doesn't help is the worldwide financial crisis that we are in, which will find its way into consumer spending. But our customers are, relatively speaking, not hit so much by that crisis.
DL: I guess your customers are fairly high net-worth individuals?
VM: We estimate on average US$50m.
DL: Where are they from?
VM: 50% are in America, 50% outside America. When the SSUV four-door four-wheel drive car comes we expect that there will be a shift, let's say to the new economies - Russia, China and also the Middle East, because that's where that car will be going.
DL: Making exotic sports cars isn't an easy business to be in and you don't need me to tell you that. What attracted you to it?
VM: It is a phenomenal challenge and I have always tremendously enjoyed challenges and little did I know just how challenging it would be…but it was all self-inflicted because I decided with the board that we should go into Formula 1. Obviously we did not manage that properly and paid the price. However, building exotic sports cars is still a tremendously nice and attractive business and when we get our new products on the road - the Aileron C-line and D-line SSUV - then we can demonstrate that this business is not only a challenging business but one that is also a nice business from a shareholder point of view.
DL: What is the basic company strategy for Spyker Cars?
VM: The basic strategy is to design and develop timeless sports cars. We are not going to make any new-edge designs or do things that might be considered out-of-date in five years. We want to control our distribution very carefully and we believe that there are three things that are really important to building our brand: consistency, consistency and consistency. It is very, very important to have a consistent brand image.
We also focus on a limited number of markets in our strategy and we are also dedicated to racing and especially GT2. Of course F1 was a great way to promote the brand but that, unfortunately, was short-lived. GT2 and Le Mans are part of our strategy.
DL: What are the core values in the Spyker brand?
VM: We have five brand pillars: heritage, design, craftsmanship, performance and exclusivity. Those are the five core elements that constitute the Spyker brand.
DL: From a customer perspective, what should mark a Spyker out from an Aston Martin or Ferrari?
VM: The exclusive element is important and the hand-built element is very important, too. The other cars are mass-produced by comparison. And the aviation heritage is something that is reflected in the exterior design and the interior design.
The customer is eager to buy Spyker because it is something else; he wants something different, more exquisite, more exclusive and more hand-built. We are not competing with Ferrari or Aston Martin. When you have made your first million pounds then you go and buy a Ferrari, not a Spyker - not yet. That will take quite some time.
Typically a Spyker buyer already owns or has owned well-known brand supercars and wants something that is different from that experience. We are on average the seventh car in their collection.
DL: What models do you see as key to Spyker's future development?
VM: C8 Aileron which we showed in Geneva last March. And the Peking-to-Paris D8 SSUV - production of which starts in 2009.
Comment