Aston Martin, Ferrari, & McLaren Update Q 2 2020

Aston Martin, Ferrari, & McLaren Business Update Q 2 2020

In early April I posted an article on the challenges Aston Martin, Ferrari, and McLaren were facing in light of the Coronavirus (Aston Ferrari McLaren Challenges).  At that time most of the world was just several weeks into a lock down that would ultimately bring large parts of the global economy to a halt.  Eight weeks later, those lock downs are starting to lift in many countries and a “new normal” is taking root.  This new normal looks nothing like the world circa 2019 and that world is unlikely to return until a vaccine is widely available.  With all three manufacturers now having posted their Q1 results, in this rapidly changing environment, I thought it would be worth taking another look at the health of Aston Martin, Ferrari, and McLaren, the challenges they are facing, and what needs to be done to survive.

 

I am a firm believer that you need to not only understand the situation today but also have a firm grasp on history to be able to even remotely predict the future.  A strong, healthy, well-run company isn’t something that happens overnight, it takes years to build.  On the other hand, baring a crisis, a poorly run, sick company can crawl along on life support for years.  The difference is right now we have a crisis, and the risk to a poorly performing business in this environment is significant. 

 

Below are the financial indicators that I normally start with on any company I am taking a look at.  These are the full year 2019:

 

Manufacturer

(US $)

Market Cap (as of May 29, 2020)

2019 Group Sales

D% vs. 2018

2019 Cars Sold

2019 EBITDA

D% vs. 2018

Aston Martin

$838 mil.

$1,241 mil.

-10%

5,862

$167 mil.

-46%

Ferrari

$42 bil.

$4,118 mil.

+10%

10,131

$1,002 mil.

+11%

McLaren ‘

$2.5 bil.*

$1,960 mil.

+18%

4,662

$230 mil.

+30%

*Based on last round of investment in 2018. 

 

And this is Q 1 2020:

 

Manufacturer

(US $)

Market Cap (as of May 29, 2020)

Q1 2020 Group Sales

D% vs. Q 1 2019

Q 1 2020 Cars Sold

Q 1 2020 EBITDA

D% vs. Q 1 2019

Aston Martin

$838 mil.

$99 mil.

-61%

578

-$58 mil.

-266%

Ferrari

$42 bil.

$1,015 mil.

-0.8%

2,738

$345 mil.

+1.9%

McLaren

$2.5 bil.*

$137 mil.

-62%

307

-$101 mil.

-460%

*Based on last round of investment in 2018. 

 

Clearly things got very ugly for McLaren fast, Ferrari hit a small speed bump, and Aston Martin continued to unravel.  In the two months since the end of Q1 2020, these trajectories, if anything have only accelerated. 

Starting with the strongest of the three, from a financial perspective, Ferrari is clearly performing well and is well positioned to both weather the crisis and emerge in a position of increased strength.  To give an idea of just how solid Ferrari’s current position is, they have enough cash on hand to just about cover all their debt that matures in the next two years.  In the past two months Ferrari’s market cap has actually increased by $4 billion, more than the combined value of Aston and McLaren.  In fact today Ferrari, which produces just over 10k cars a year, is worth more than either General Motors (7.5 mil. cars/year) or Ford (6 mil. cars/year). The stock market values Ferrari as a luxury good manufacturer with a P/E ratio of 37, much more in line with Hermes or LVHM than GM or Ford.  When announcing the Q 1 2020 results, Ferrari did issue guidance for the balance of 2020.  At the high end of the guidance EBITDA is expected to be -5% vs. 2019.  In normal times this would be a poor year, in today’s circumstances, if they can deliver it’s a very strong result.  Ferrari will also benefit significantly from the Formula 1 spending caps coming into place and has reduced its driver cost by an estimated $40 million in 2021 with the switch from Sebastian Vettel to Carlos Sainz.  The biggest risk Ferrari faces right now is to its huge market cap should it miss 2020’s reduced targets. 

Financially, Aston Martin’s situation is just plain ugly, again.  It’s gone bankrupt 7 times in its history and an 8thdoesn’t seem out of the realm of possibility depending on how the next year plays out.  From its IPO in Oct 2018, which valued Aston Martin Lagonda at a little over $5 bil, 18 months later AML’s value sits at 16% of that after the share price recovered a bit in the last week.  It’s a spectacular destruction of shareholder value in a relatively short period of time.  Q 1 2020 for Aston Martin continued the downward spiral Aston perfected in 2019.  All of Aston Martin’s hopes and dreams right now are wrapped around the DBX SUV.  Whether the post Covid-19 economy will be a welcoming one for yet another $200k+ SUV is highly debatable.  Even if it is a success, it may be too little too late.  Lawrence Stroll, brought in to provide badly needed liquidity, is now officially the Executive Chairman and owns Aston’s future.  He recently hired Tobias Moers away from Mercedes-AMG to be Aston’s new CEO and to execute the turnaround.  What is quite shocking is this is really the only major move, other than a bit of belt tightening, Aston has made in the last couple of months. 

 

In the first article I wrote that “Aston Martin feels like it was built on the side of an active volcano that sits on top of an earthquake fault line” and nothing that has happened recently would change my point of view.  Andy Palmer, the former CEO who just recently found out (via a reporter at the Financial Times in a stunning display of poor transition management) that his presence was no longer required looks to be carrying the bag for the current mess.  Whether Dr. Palmer is to blame for the current situation is an interesting discussion.  He was brought in back in 2014 by the controlling private shareholders to polish Aston Martin up for an IPO.  Palmer was brilliant at delivering against that mandate.  He doubled Aston Martin’s revenue between 2015 and the IPO in 2018, more than tripled EBIDTA, almost doubled car sales, while holding debt levels steady.  For his troubles, Dr. Palmer walked away with roughly $40 mil. when Aston went public.  The key words in the last sentence are walked away, because if Andy had taken his cash and ridden off into the sunset, his reputation would certainly be very different than what it is today.  If pre-IPO Aston was a discipled financial enterprise under Palmer, post IPO Aston exhibited all of the financial disciple of an alcoholic locked in a brewery.  Net leverage soared in 2019 to 7.3x adjusted EBITDA, up from 2.3X in 2018 and as of Q 1 2020 sits at an even more frightening 10.4x.  The warning signs that this was going to go off the rails certainly date back to 2018 and the way the IPO was structured.   All money raised from the IPO went to the existing shareholders and did not generate any cash for Aston Martin which could be reinvested in the business.  It’s a clear message that the group that got Aston to this point had little interest in its future.  Throw in a couple of head scratching completely off strategy vanity projects like Project Nepture – the Aston Martin Submarine, and the Aston Martin Apartments in Miami, and its clear management had begun to lose the plot. 

 

So, if Lawrence Stroll and Tobias Moers are going to save the day and turn Aston Martin into the “British Ferrari” with a P/E ratio north of 30x, they first need to stabilize the business and stop the bleeding.  It’s surprising that a restructuring program has yet to be announced as reducing costs is a critical step in these sorts of situations.  The one line of the P&L that has been increasing well ahead of revenue for a few years is “operating expense”.  This points to an organization becoming increasing bloated and less efficient.  Ditch the submarine and the Miami apartments, they are nothing more than an unnecessary distraction.  Finally get the long-delayed Valkyrie finally out the door and take a hard look at if Aston really has the resources (and the demand) for the Valhalla.  Same goes for the V12 Speedster.  If not, you still have time to pin it all on the Palmer regime and to walk away.  Finally, pray hard that the post Covid-19 world really does have a need for the DBX SUV.

Which finally brings us to McLaren.  In the first article I wrote that McLaren needed to do three things to get the business back on track:

 

  • McLaren’s Formula 1 Team needs to again become a net profit contributor to the group.
  • The next generation Sport and Super series McLaren’s need to be launched flawlessly and deliver segment leading performance.
  • Need to fill the profit gap left by the longer timing now necessary between Ultimate series models given the recent market saturation in this segment.

 

Coming out of 2019, McLaren’s financials looked quite respectable.  It had a growing business, the ten-year-old supercar business made money, and as a privately held company, has been able to attract outside investment whenever necessary.  On the surface, it was the F1 team that presented the biggest financial challenge and the supercar business looked solid.  Then Q1 2020 happened and McLaren’s results imploded.  The F1 team is certainly no longer McLaren’s biggest issue. McLaren sold fewer cars and lost more money in Q 1 than Aston Martin.  Some of this was by design and some of it not.  What caused this, well the “hamster” died in late 2019.  The “hamster” in this case, which had spun the wheel that powered the McLaren financial model since 2015, was the Ultimate Series and LT series cars.  The model simplistically was that the high profitability from the limited-edition cars would help fund incentives when needed to keep the regular production supercars moving out of dealer’s showrooms.  What killed the “hamster”, overwork and exhaustion.  Instead of keeping the Ultimate Series cars as a once in every 5+ years event, McLaren had started churning them out on an almost annual basis as McLaren had become reliant on the profits.  In addition, the last LT car produced, the 600LT was no longer a capped production run and McLaren flooded the market with them.  What happened in 2nd half of 2019 broke the model.  The last Ultimate Series car launched, the Elva didn’t sell out and McLaren was forced to cut the planned production run from 399 units to 249.  The writing was on the wall for the Elva by the way the secondary market was allowed to develop for the Senna.  With no restrictions on how long you needed to hold the car for, a significant number of Senna owners flipped the cars shortly after taking delivery.  This gut of Sennas on the market depressed values and for the 1st time in memory, a limited edition hypercar was available on the secondary market at or below list.  While I do believe the way Ford managed the application process for the GT was atrocious, the one thing they did do right was lock owners into holding their cars for at least two years.  At the same time this was happening, in order to move a glut of 600LTs out of showrooms, McLaren was having to provide incentives.  So instead of the 600LT being a high profit contributor, it became a drag on the P&L. 

 

The roots of McLaren’s problem date back to 2016 when McLaren launched the Track22 plan which called for 15 new models in 6 years.  McLaren then doubled down 2 years later with an updated Track25 plan which called for 18 new models by 2025.  The plan laid out was audacious to say the least.  McLaren then borrowed heavily to fund the development of all these new models, leading to the significant debt problem they are currently facing.  Net leverage is currently at an Aston like 7.8x adjusted EBITDA.  In reality it was too many new models, too fast, that the market could not absorb.  Eight to ten years between new production models with a revite/update/facelift at the mid-point and a minimum of five years between Ultimate Series cars feels like a much more reasonable plan.  In addition, the production ramp up on all these new models did cause a few reliability issues that got very over hyped in a few social media platforms.  (Personally, we have never had any issues McLarens & Reliability). The net impact on McLaren’s reputation though has not been positive.

 

To McLaren’s credit, they did realize they had a major problem well prior to the Coronavirus taking its toll.  Planned production for 2020 was already reduced heading into this year and McLaren just announced a major restructuring.  In addition, capital spending and marketing costs have been cut substantially. The launch of the new Sport Series models has been pushed back to 2021 and the main focus for 2020 is delivering the “hamsters” dying gifts, the Ultimate Series Speedtail & Elva, along with highly profitable 765LTs. 

In summary, all three supercar manufacturers have their challenges.  For Ferrari these are not outside what one would expect for a highly successful company in a challenging environment.  What happens to Aston Martin is anyone’s guess.  It’s in dire straits but like a phoenix, Aston Martin is exceedingly good at rising from the ashes to live yet another day.  If the DBX lives up to expectations, Aston might just make it.  Or at least for long enough for Stroll & Company to cash out handsomely.  McLaren went off the rails quickly, even if the warning signs have been evident for a while.  When things are going well, and by most measurements 2019 was a very good year for McLaren, it’s easy to ignore the warning signs.  McLaren does seem to understand their issues and is taking action to address them.  The good news for McLaren though is their cars are still best in class.

 

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Maintenance Costs – The McLarens

Maintenance Costs – The McLarens

Recently I asked for ideas for future articles, I got a lot of requests about maintenance costs.   I believe at the time I replied that it was a highly dangerous topic given Mrs. SSO does read all the articles I post.  However, I’ve decided to take the risk and will do so in several parts.  The first part covered the Ferraris (Ferrari Maintenance Costs) and this article will focus on the McLarens.  I have always tried to be quite religious with annual services which I’m sure has helped finance better lives for quite a few very talented mechanics.  In addition, any issues that come to light during these annual pilgrimages to the service center get taken care of right away.  My philosophy has always been that small problems only grow into big problems and it is much less expensive to take care of things immediately than to wait.  As a reference point, when evaluating the annual maintenance costs (I define maintenance as annual servicing cost plus replacement of wear & tear items), I take into account the original list price and not our acquisition cost.  A car that cost $250,000 new is always going to have $250,000 car type service costs regardless of what you might be able to buy it for a lot less 5 or 10 years later.  Unfortunately, unlike a car, service costs don’t depreciate over time, if anything they move in the opposite direction as more of a car’s components wear out and need to be replaced.

 

In no particular order here is a bit of our maintenance cost history.  For the sake of simplicity, I have kept the costs in the currencies they were incurred in.

McLaren P1 – We owned the P1 for a bit under two years. During that time, we had it service once at a cost of $2,880 which seemed quite reasonable given the value of the car.  The P1 also made two other trips back to the service center.  The first was for a replacement of the IRIS infotainment system done under warrantee and the second was a recall notice for the front hood latch.  To date though, the P1 is the only car we have sold due to fear of a large six figure maintenance bill (P1 Farewell) if the hybrid battery had failed.

McLaren 12Cs – We owned three 12Cs over a 3-year period.  While on paper this sounds a bit daft, there is a logical explanation to it that involves two moves and three countries during that period (Our McLaren History).  Across the three 12C’s in the 3 years, we only had one bill for an annual service.  The invoice came to £3,265 and included £1,530 for the hardware upgrade from the less than useful 1st generation IRIS infotainment system to the 2nd generation.  This is one case where I still believe McLaren got it wrong. IRIS was a £5,320 option that was substandard at best and should have been replaced free of change for all owners of early 12C’s.  We did take our final LHD 12C Spider in for service but right after we dropped it off, we got the offer to trade it in for a 650S Spider so I never did see the invoice.

McLaren 650S Spider – The 650S Spider has been with us almost 5 years now.  From delivery up until today, it has served as my daily driver.  Its next service is due shortly.  The bills to date are: 1st service $1,410, 2ndservice $2,275, 3rd service $1,836, & the 4th service $5,570 which included $2,100 for four new tires and $880 for the alignment.  Four years of driving around on Dallas’ horrible roads definitely took its toll.  If I take out the tires and alignment, the service costs have averaged $2,027 per year which is less than what the Ferrari 16M or 599 GTB rang up during a similar period in the same location.

McLaren 675LT Spider – The 675LT Spider is nearing four years old now.  During this period, it has been our road trip car of choice, so it’s done plenty of long trips.  The 675LT Spider has also spent the majority of its life in the mountains of Montana enjoying some of the more challenging roads in the US.  The three annual service so far have run: 1st service $1,755, 2nd service $2,405 and the 3rd service $1,700.  In addition, we had to replace the windshield last September at a cost of $5,610, which is about equal to the 675LT Spider’s service costs to date.  Despite being a Limited Edition car, the LT has been no more expensive to run than the 650S Spider.

 

McLaren 720S – We owned the 720S Coupe for just under two years and had it serviced twice at costs of: 1stservice $1,625 & 2nd service $2,925 which is in line with the bills for the other models.  These were the only two times the 720S went back to the service center.  In a departure for our normal practice of waiting for late production cars, the 720S Coupe was a fairly early build.

We also own a 720S Spider and a Senna which are not included in the above list as neither has been due a service yet.  The Senna has been back to a McLaren service center twice for recalls, both of which took less than a day.  The 720S Spider has not had a single issue in the 6 months we have had it.

 

I’m not sure what conclusions to draw from this exercise other than McLarens are not inexpensive but also are they are not unreasonable to run.  The annual maintenance costs seem very consistent across the range with the P1 being just a bit more.  So far, we have been fortunate to avoid any major “wear & tear” bills, like gearboxes, that can generate the big hits to the wallet.  In comparison to the Ferraris, the McLarens have been a bit less expensive overall.  As per the article on the Ferraris, I’m not going to add them all up as that just seems unproductive.  Anyways I am sure Mrs. SSO, who is very quick with numbers, will be in again to see me for a discussion shortly.

 

More on our McLaren ownership history in this article: Our McLaren History , the 650S Spider’s history as a daily driver: 650S Spider Daily Driver, & Collectability Ratings for McLaren’s Collectability of McLarens.

 

Next up will be our Porsche & a few of the others maintenance costs.

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McLaren 720S Spider vs. 650S Spider

McLaren 720S Spider vs. 650S Spider

On paper, comparing the McLaren 720S Spider to the 650S Spider doesn’t seem like much of a fair fight.  The 720S is the current generation “Super Series” car while the 650S is the previous generation.  The 720S was built against a brief to not only beat all competitive benchmarks but leap a few generations forward.  In terms of outright performance, even 3 years after the 720S launch, Ferrari and Lamborghini are still struggling to catch up.  The 650S on the other hand was an evolution of the 12C, who’s original development traces back to 2007.  The 720S is built around a new lighter, stiffer, carbon fiber tub, and has a 69 bhp advantage over the 650S.  Over 90% of the 720S’ parts are new.  

So why the comparison?  Two reasons really, the first is to capture just how far forward McLaren has moved the game on with the 720S Spider and the second is to reinforce just how good the 650S Spider still is today.  I also have an enormous soft spot for the 650S Spider, as it has been my daily driver (650S Spider Daily Driver) for almost 5 years now.  

Initially I was a bit skeptical on trading in the 2014 12C Spider for the 2015 650S Spider.  It was one of the last 12Cs built and I thought it was a significant improvement on the earlier cars.  However, the 650S Spider really moved things forward. It’s hard to put your finger on exactly why and where the 650S Spider is better than the 12C but it just is and it’s across every dimension.  The twin-turbo 3.8 liter V8 engine delivers 641 horsepower and 500 pound-feet of torque, enabling the 650S Spider to hit 62 mph in 3 seconds and 124 mph in 8.4 seconds.  Power delivery, handling, suspension, brakes, were all just a bit improved and when you add the whole package up, what you have is a noticeably better car.  The changes in suspension were particularly noticeable as the “floaty” feeling you could get in the 12C had been eliminated but the ride quality has not been compromised.

While we have had our 720S Spider for 6 months, due to winter and the call of the mountains, we have only been in the same location for half that time.  Since we returned from the ski slopes, we have added several hundred miles to the 720S Spider odometer via a number of long drives pre the Covid-19 lock down and then on a few grocery runs during the current lock down.  It’s been enough to get the break in miles out of the way so we can begin exploring all of its immense capabilities.  No other car I have driven combines smooth and quick the way the 720S Spider does.  One of my first impressions is that the 720S Spider seems to ride slightly more smoothly than its closed roofed brother who’s slot it took in the garage.  The suspension provides a beautiful balance of both road feel and smoothness that irons out the imperfections in the rather iffy local blacktop. Steering weight and feedback are excellent.  There is zero body roll when cornering and it remains beautifully balanced across the axles.  With a twin-turbo 4.0 liter V8 engine that delivers 710 horsepower and 568 pound-feet of torque, the 720S Spider will hit 62 mph in 2.8 seconds and 124 mph in 7.8 seconds.  Power delivery is the most linear of any non-hybrid turbo charged car I have owned.  The 7-speed dual clutch gear box is incredibly quick.  The three transmission modes provide a nice range of choices from civilized to tasered cat.  When “on it” in sport or track mode upshifts bang off wonderfully, rewarding the inner petrolchild.  The carbon ceramic brakes are massive and instill confidence just by looking at them.  The 720S Spider is one supercar that “stops” as well as it “goes”.  The 720S Spider is a deeply engaging and rewarding car to drive. It excites and engages but not does not leave you battered and exhausted after a few hours behind the wheel.

There are two items where I actually prefer on 650S Spider to the 720S Spider: the seats and the climate controls.  While Mrs. SSO prefers the seats in the 720S Spider, my preference is for the one’s in the 650S Spider.  It may simply be down to years of familiarity, but I do find them more comfortable.  One area we both agree on is the electric seat controls are more intuitive and easier to operate on the earlier car.  We also both prefer the door mounted climate controls on the 650S Spider as neither one of us is a huge fan of having to scroll through menus on a touch screen when a simple dial will do.  Mrs. SSO also prefers to keep her side of the car a bit warmer which is much easier to do with a door mounted dial vs. having to scroll through menus and then adjust the temperature on a touch screen.

On paper the 720S Spider is clearly the superior car, as it should be given where it sits in McLaren’s evolutionary timeline.  Spend time with a 720S and you can see how McLaren has incorporated learnings from the 12C, 650S and 675LT into its development.  The engineers at McLaren are good Darwinists, each generation is better than the last, which is in fact McLaren’s core selling point (Ferrari takes more of a creationists approach….we created it, it’s a Ferrari and therefore you should be delighted to have the opportunity to buy one.) In terms of performance, the 720S Spider is a hypercar in supercar clothing.  However, that takes nothing away from the 650S Spider.  On its own the 650S Spider is an outstanding supercar, so good in fact that it still on par with just about anything the competition has in their portfolio today.  Hence why I see no reason to change my daily driver, for at least the next couple of years.

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Collecting McLarens

Collectability of McLarens

Collectability of McLarens

It’s now been 10 years since the McLaren 12C was officially launched at an event at the McLaren Technology Center.  Antony Sheriff kicked off the launch presentation and was then followed by Ron Dennis & Martin Whitmarsh, outlining the strategy for the McLaren Automotive.  The unveiling of the launch car was done by the two McLaren Formula 1 drivers at the time: Lewis Hamilton & Jenson Button.  At the launch, McLaren claimed to have 1,600 likely buyers lined up with deliveries to start in mid 2011.  While 10 years may not seem to be that long ago, a lot certainly has changed at McLaren since then.  

In my mind, ten years is the first major inflection point that a car crosses on the way to either classic status or a permanent state of ever advancing oxidation.  With the earliest McLaren’s (putting the Mclaren F1 aside as it exists in a completely different universe) now approaching their tenth birthday, I thought it would be interesting to take a shot at predicting which of the many models McLaren has produced in the last decade will become collectable classics in due time and which might not.  

Super Series

There have been three main models in what McLaren today refers to as the Super Series.  They are the 12C, 650S, and 720S.  The 650S and the 720S also had an end of run limited production special track focused editions: the 675LT & 765LT.  All were produced as both coupes and spiders.  In addition, there are 25 MSO HS’ which are a 675LT dialed up to “11”.  I have not included the 765LT as customer deliveries have not yet begun.

12C 

It can be hard going first.  The 12C was both loved and heavily criticized when it was launched.  While technically superior and quicker around a track to its main competition, the Ferrari 458, the 12C took a bashing for not having as much character or soul.  Early “swipe door” 12Cs had a reputation for having a number of quality problems which were resolved during the four-year production run.  Out of the 12C range, long term I believe the early “swipe door” 12C Coupes and, the late 12C Spiders (Our McLaren History – 3 12Cs) will be the most collectable as the former is the first of its kind and the latter the best of the bred.  

As a reference point, I believe the 12C will be viewed long term in a similar manner to the Ferrari 360.  It was the first new mid engine V8 Ferrari developed under Luca di Montezemolo (the F355 was a heavily revised 348) and the first all-aluminum space-frame chassis Ferrari.  The 360 broke new ground on many fronts but also had a number of weaknesses that were addressed by the model that replaced it.

650S

To describe the 650S as a facelifted 12C is to do it a great disservice.  McLaren claimed that 25% of the car was new but the 650S is really a combination of hundreds of small improvements that together deliver a superior car.  Compared to the 12C, it has more power, sharper and yet more compliant handling, fast shift times, and ceramic brakes as standard.  I have used ours as my daily driver for close to five years now (650S Daily Driver) and never had a single issue with the 650S Spider.  In terms of long-term collectability though, I would rank it slightly behind an early 12C.  The 650S doesn’t have the uniqueness of being the first McLaren Automotive road car that the 12C will always carry with it and it is eclipsed by the model that replaced it, the 720S.

A point of conceptual comparison for the 650S is the Ferrari 512BB.  The 512BB is a much better sorted car than its predecessor, the Ferrari 365 GT4 BB.  However, the 365 GT4 BB commands a premium among collectors as it is the first mid-engine Ferrari road car. 

675LT

The 675LT may just be the greatest car McLaren has produced in its first decade as a road car manufacturer. So far the 675LT is my favorite McLaren (Favorite McLaren) and I can’t imagine it loosing that title anytime soon.  It’s the 675LT that put to rest the criticism on McLaren’s lacking personality while burying its main competition, the Ferrari 458 Speciale, across the board in terms of performance.  With only 500 coupes and 500 spiders produced, the 675LT is also relatively rare when compared to the 3500+ Ferrari 458 Speciales.  As the best and last of the 1st generation McLaren road cars, long term the 675LT should also be the most collectable.  However not all 675LTs were created equal.  McLaren Special Operations produced a very limited run of 675LTs on steroids which were badged the MSO HS.  These are the ultimate and rarest of the 1stgeneration McLarens.

I can see the 675LT being viewed a decade or so in a similar light to the Porsche 911 (993) Carrera RS.  The 993 RS is the best and last of the aircooled Porsches with similar production numbers to the 675LT.

720S

If the 675LT was built to bury the Ferrari 458 Speciale in terms of performance, as the 1st model in the 2ndgeneration of the McLaren Super Series, the 720S was designed to outperform every possible competitor, and it did.  The 720S was the first supercar to offer hypercar levels of performance while delivering supercar levels of civility.  If the 650S was a significant improvement on the 12C, the 720S represents a major leap forward.  The 720S does both docile and feral with equal levels of confidence and composure which long term should make it a favorite for collectors.  It will also likely be not only the last of the pre hybrid McLarens but also the best. 

The reference point that comes to mind with the 720S is, a bit ironically, the Ferrari 458 Italia.  The 458 was both a significant improvement on the Ferrari F430 and the last in the line of the normally aspirated mid-engine Ferrari V8s dating back to the Ferrari 308.

Ultimate Series

In ten short years, McLaren has launched four Ultimate Series hypercars: the P1, Senna, Speedtail, and Elva.  In the history of hypercars, the number of models in this a short time frame is impressive unprecedented and yet concerning (Too Much of a Good Thing).  For this article, I’m only going to include comments on the P1 and Senna as customer deliveries of the Speedtail have only just started and the Elva is still at least a year out.

P1

Of the 2014 Hypercar Holy Trinity (Porsche 918, Ferrari LaFerrari, McLaren P1), long term I believe the McLaren P1 will be the one to have.  In this league rarity counts and with over 710 LaFerraris (coupe & spider) and 918 Porsche 918s produced, the 375(ish) McLaren P1s make it a significantly rarer car.  If the LaFerrari is polished and the 918 is a complete technology showcase, then the P1 has a raw edge the other’s lack.  The P1 is also the fastest around a track and is held in very high regard among the very fortunate few who own all 3.  If the P1 has an Achilles heel, is too much technology that may not age well.  The other major concern when it comes to long term collectability is the battery pack. The issues with the 1st generation battery packs were a key reason we sold ours (P1 Farewell) and a long term solution will be critical for P1s remaining viable.  

In terms of collectability, the car that most reminds me of the P1 is the Ferrari F50.  While today the F50 is highly regarded and highly sought after, that wasn’t always the case.  It was more respected than loved most of its existence and got quite a bit of mixed press at launch.  Build numbers between the two are similar as is the purity of the driving experience.

Senna

McLaren’s brief for the Senna was to produce the ultimate road legal track car.  What it lacks in polish, it makes up for with brute force.  It’s a binary car, either you love it or hate it.  In terms of performance, nothing else with a license plate is going to come close to it on a track.  The 500 units produced do detract slightly from its long-term collectability.  Raw focused cars like the Senna do tend to both age well and remain high in the public’s imagination.

Since the first time I drove ours, I’ve thought that the Senna was a modern version of the Ferrari F40 (F40 & Senna).  The F40 & Senna demand similar levels of skill and concentration to drive well while being both immensely rewarding and potentially terrifying.  

Sport Series

To date McLaren has only produced one model, the 570S, in its entry level Sport Series.  The replacement to the 570S is expected to be announced shortly.  The 570S had two end of run special track focused editions, the 600LT and the limited production 620R.  I have not included commentary on the 620R as customer deliveries have just begun.

570S

As McLaren’s entry level sports car, the 570S was targeted at doing everything the Porsche 911 could do, but better.  Whereas the Super Series McLaren’s have all been produced in both coupe and spider versions, the Sports Series included a more practical coupe variant badged the GT with extra luggage room and softer suspension settings.  Commercially the 570 has been a major success for McLaren with the Sport Series making up almost 2/3rd of the cars McLaren has sold in the last several years.  Long term the relatively high production numbers will hold values back but as a highly usable and accessible sports car, it should remain popular. 

I believe the Aston Martin Vantage is a good comparison for the 570S.  The Vantage opened up Aston Martin ownership to a whole new group of people.

600LT

Like the 675LT, of the first-generation Sport Series McLarens, long term the 600LT will be the collector’s choice.  The 600LTs already have a very loyal following among track day enthusiasts for both their superior capabilities and drivability.  Comparing the 600LT to the 675LT is unfair (2 days with a 600LT) but it is still best in its class.

If the Aston Martin Vantage is good comparison for the 570S, then the Aston Martin V12 Vantage provides a good reference point for the 600LT.  Cramming a V12 into the nose of the Vantage transforms the car from quite civilized to just a bit feral while remaining decently civilized.

New GT

The McLaren GT sits on its own outside of the 3 main series of cars.  Its McLaren’s second attempt at attracting competitive Grand Touring driver’s after the moderately loved and short lived 570GT.  The new GT, like all McLarens, is mid-engine which puts inherent constraints on luggage space.  In terms of performance and comfort, it sits right between the 570 and 720 series.  GTs tend to be better loved when new than as collectors’ cars and I can’t see the McLaren GT being any different.

The McLaren GT reminds me of the Ferrari 599 GTB, technically excellent and wonderful to cruise in for hours.  However, it is a car you more like than love (Like but Not Love).

In summary, all McLarens will always have a decent degree of collectability and a loyal following.  Of the models produced to date, my guess is 20 years down the road, the 675LT Spider, MSO HS, Senna, and P1 will be the four most highly sought after with the early “swipe door” 12C Coupes having a cult following.  Time will tell.

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April 2020

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