“It just puts a smile on your face,” he said. “Even a ride to the supermarket may be entertaining.”
And plans for an IPO? That could be entertaining, too. The appeal would be a Ferrari-like valuation that resembles a luxury brand, such as Prada, more than a mainstream carmaker. Fiat Chrysler’s spinoff of Ferrari NV didn’t get off to a glorious start—falling about 40 percent in its first four months—but it looks good now, cruising with a price-to-earnings ratio above 30 and a richer market valuation than that of former parent Fiat Chrysler Automobiles NV.
Anyone looking to bet on widening income inequality should want to own a company selling exotic cars at a profit, said Joe Phillippi, an industry consultant. “There doesn’t seem to be an upper limit, at least not at this point,” he said.
Indeed, McLaren has been a hot car among the jet set, winning raves at collector shows and auctions. Global vehicle sales almost doubled, to 3,286, last year. This year’s plan is to produce almost 4,000, approaching the factory’s nearly 5,000-unit capacity. Revenue jumped 44 percent in 2016, net income more than doubled, and the future looks solid, with the first year of 720S production already sold out.
“I’ve been in the car business for all my life, working for Audi and Lamborghini at the headquarters,” Frigerio said. “I’ve never seen a car company coming in and in six years being where it is. So from a business perspective, from a business owner, it’s very exciting.”
This article was provided by Bloomberg News.