If the importance of a car company was to be defined by whether or not it is a subsidiary of a group and the number of other subsidiaries belonging to the same group, then our perception of the luxury and sports cars industry would be slightly different.
This is what I represented in the slideshow above. It provides an overview of what the high-end luxury and sports cars industry would look like from that angle. The bigger the logo, the more ‘independent’. Note that I omitted some brands to reflect this specific segment and the list is not exhaustive.
Representing the luxury and sports car industry in this way is obviously not a relevant observation on its own, but rather one more way to look at it.
They All Belong To Someone
As you can see, the big names everybody knows all belong to a group. And for the companies who seem to own themselves, the general public does not know them very well. It might not just be coincidence.
The most famous names like Aston Martin, Ferrari, Rolls Royce, etc. all have a long history. Some of these companies are rooted in the beginning of the 20th century, others started after the end of the war. A long history means many challenges and a few crisis to overcome.
Some of these crisis included global events like the world wars, the industrial revolution or the oil crisis of the 70’s led car makers and the industry to consolidate. Crisis are also synonymous with opportunities and brands changed hands.
Maserati is a good example: founded by the Maserati brothers, then owned by the Orsi family, taken over by the French car maker Citroën, passed to the management of the Argentinian DeTomaso and then Fiat, Ferrari and ultimately Fiat Chrysler Automibiles group.
The Volkswagen Case
The Volkswagen group is an interesting case to study. First of all because Volkswagen means ‘People’s car’ in German. This is quite contradictory with the fact that this group accounts for the biggest consolidation of luxury and sports car brands of the industry.
Secondly Volkswagen managed to keep their fans debating for years over which of Bentley, Porsche or Lamborghini was better engineered, better performing or with the best design while these iconic brands all belonged to the same group.
Thirdly Volkswagen managed to keep all these brands alive with their own image, their own public, their own set of cars. The group elaborated separate road maps avoiding collisions, shared components and technologies across its brands but maintained different images. This is quite a challenge considering the apparent fierce competition between these brands. But there is a chance that part of this competition is also staged and orchestrated to preserve the group’s interests.
Independence or support?
The definition of ownership can be questioned and I chose to consider the highest corporate level. But this is not the only way to define the ownership. Taking the example of the Volkswagen group, it is in great part controlled by two families – the Porsche and the Piech – who hold a significant part of the group capital through shares. In this respect, we could say they partially own Volkswagen and its subsidiaries. We can debate on who is the owner, what is however undeniable is the tendency to consolidate.
Let’s go back to the less known supercars and hypercars companies. One can imagine they still receive funds or capitals of some sorts from private investors allowing them to find the resources to build their $1 million+ hypercars.
These companies are more ‘independent’ in terms of directions they want to take. However they suffer more stress when it comes to cash. There is the pressure to deliver these high-end sports cars while making sure the companies stays afloat and generates profit. On the other side, Volkswagen (again) could afford to revive Bugatti and lose money on every Veyron they sold. Technology was their challenge, not profit. That was a comfortable position, the group was providing support.
However with the most recent technologies and the shift to electric cars, the cost to develop new performance cars and an electric cars has significantly decreased. Although significant investments are still needed, this change for example allowed Rimac Automobili to launch their Concept One in 2013, an all-electric supercar. The technology disruption is the chance for new companies to emerge and a challenge for the ones already established.
The oldest brands like Ferrari – celebrating its 70th anniversary this year – that have been around for many years were all absorbed at some point by a bigger group. Will the fate be the same for the younger companies and also, will the electric cars industry follow a different pattern?