Lamborghini predicts return to profitability

By GEORGE FREY

Associated Press

Updated: 09/16/2009 01:31:26 AM PDT

 

 

FRANKFURT, Germany — Italian carmaker Lamborghini SpA expects to be profitable this year despite sales setbacks in the downturn — but any recovery for luxury autos in 2010 will be slow, chief executive Stephan Winkelmann said at the Frankfurt Auto Show.

Winkelmann said he expected a positive result despite worldwide deliveries that were nearly 40 percent lower during the first half.

 

"The main focus is to remain profitable," he said.

 

For the six months ended in June, Lamborghini, which is part of Volkswagen AG, reported an operating profit of $8 million on $229 million in sales, or 825 cars delivered.

 

"The high-end luxury market is part of the total luxury market, and I don't see any increases in 2009," Winkelmann said.

 

"The luxury market is coming back, the timing is difficult to guess. (The downturn) will end for sure, but it will be slow. If a recovery starts in 2010, it will be slow."

 

Winkelmann said while the U.S. market, the company's biggest, saw sales fall more than 50 percent during the first half of the year, developing markets were contributing nicely to the company's sales and earnings.

 

"China will be in the top five very soon," Winkelmann said. "India and Russia will take some time, especially Russia with its long, cold winters."

 

The company will open its first dealership in South America later this year in Sao Paulo, Brazil, making it the third in the region after two existing dealerships in Mexico.

 

Lamborghini was unveiling its Reventon Roadster, a two-seater that looks like a bullet, with doors that open upward. The 12-cylinder engine produces 670 horsepower and the car can go from zero to 60 mph in 3.4 seconds, hitting a top speed of 205 mph. The company said it will not build more than 20 and has sold most of them already at a retail price of $1.6 million.

 

"Even in times of crisis, we want to build cars that fascinate and make people dream," he said, calling the new Reventon "astonishing."

 

Despite the company's concentration on "menacing power," for the Reventon it also aims to do something for the environment.

 

Winkelmann said Lamborghini hopes to reduce its cars' CO2 emissions by 35 percent by the middle of the next decade and reduce the company's administration and production facilities' CO2 emissions by 30 percent by the end of 2010.

 

an operating profit of $8 million on $229 million in sales

 

It took $229MM in sales to make $8MM. This is the destruction of wealth Drucker wrote about.

 

It took $229MM in sales to make $8MM. This is the destruction of wealth Drucker wrote about.

 

Less than $10k a car... That is pretty sad.

Less than $10k a car... That is pretty sad.

actually it seems that per car 10K is on the high side. I remember reading that BMW and Audi make 2-3K a car. and that was over a year ago. the highest is (was actually) porsche with 26-28K a car. but thats probably changed now.

Less than $10k a car... That is pretty sad.

Over expansion and exuberance during boom times often translates into trouble paying for overhead and capitol purchases during a downturn.

Although I have been critizised for it I always treat expansion with caution and consider the downside. My moto is consistent income is better than a one time quick buck.

To many companies make hay while the sun shines and have no option but to close the doors when it rains.

 

 

Russell

what else would you expect them to say?

They must have very creative accountants.