The last 50 years have hardly been a smooth ride in the country for British automotive industry. It skidded and scrambled from a postwar golden era, through the 1970s malaise of picking winners, to an era of massive foreign investment and integration into just-in-time European supply chains, now threatened by the prospect of tariffs and border checks.
One area that has been a relatively consistent success has been luxury and sports cars. Witness the rise of McLaren since 2011, the year that the Formula 1 racing company entered the commercial supercar market.
Mike Flewitt joined the following year from Ford, where he’d been VP of manufacturing in Europe, responsible for numerous factories, including at Dagenham, which ended full-scale automobile production under his watch.
In 2013, he became McLaren Automotive’s CEO, presiding over a period of extraordinary growth. Over the last three years, production has tripled to over 4,800 cars, bringing revenues to the group of approximately £700m over the first three quarters of 2018, around 90 per cent from exports.
The company also had the distinction of debuting in the top 10 in Management Today’s annual Britain’s Most Admired Companies survey last year, receiving the highest votes from its competitors for inspirational leadership.
We sat down with Flewitt to find out what’s been going right, what’s been going wrong and what he’s learned along the way.
McLaren’s growth has been impressive. Will you be hiring?
Headcount growth is slowing now, because we’ve reached the scale we were aiming for. We targeted 5,000 vehicles, which is the right kind of volume for us to sustain exclusivity. So we were on 2,200 people a year ago, and about 2,500 now, and we don’t expect to grow by more than about 100-150 over the next year.
What have you learned from building up a new brand in such a competitive market?
We don’t have the awareness of Ferrari and Lamborghini as a young brand, even with a famous name like McLaren. Our entire marketing has been built around getting people to try the car; we’re reasonably confident we’ll convert them once they’ve tried it.
Distribution was very important. We didn’t want to have more than about 10 per cent of our sales from any one country [The US is currently the only market that exceeds this level]. Now we have 90 distributors in 30 countries, with our top markets being the US, UK, Germany, Japan and China.
The dramatic growth in the Chinese consumer market has proven a double-edged sword for a lot of Western brands.
Last year we sold a little under 400 cars in China, which I was really pleased with. The issue is around legislation, not customer trends. When governments bring in legislation in Europe, there’s usually two or three years’ notice, and a consultation period. You engineer around it. But if the government wants to do something in China, it does it today. It can take us nine months to respond to technical changes to certification rules, which is nine months where we can’t sell that product, which is frustrating.
Do you need to be a petrolhead to succeed in your industry?
I would find it very difficult to perform at the same level of intensity if I wasn’t personally enthusiastic about our product. It probably depends which business you’re in, but if you’ve got the passion, you can better understand the customer, and that means you can better deliver what you want.
What was the biggest difference moving to McLaren from a corporation as large as Ford?
The big change for me wasn’t anything to do with the volume or the engineering side of it. It was that when I was running factories for Ford, I didn’t know any individual customers, other than maybe meeting someone in the pub who happened to drive a Ford Focus. At McLaren, I spend probably half the year at events with customers, understanding what drives them and feeding that back into the company. It’s not fair to say we’re more customer focused than Ford, but there are more people within the company who understand the customer and the product.
So you try to get to know customers on a first name basis?
We do an awful lot of innovation around building the best relationships we can have with our customers, paying attention to them as individuals.
A few weeks ago I took three of our customers to a classic car event in Paris, where our watch partner Richard Mille had a stand. That came about because I was speaking with one of them who had bought our exclusive Senna car, and he said he’d also bought a [Richard Mille] Senna watch. So I said why not come with me, and found two others who’d also bought the car.
We have many customer events all over the world, and we share out the opportunity to go to those – there are no professional hosts, just the McLaren team. The dream is that every customer visits the facility [in Woking]. Whenever they do, the guys in production are encouraged to talk with them – they find it quite exciting to meet the team and know who’s working on the design.
You see personalisation as a growing trend then?
It’s interesting to look to the luxury world, and there’s no doubt that when you’re buying a supercar that costs between £140,000 to £2m, you’ve got to be in a fairly comfortable position in life. What customers want increasingly is involvement in the definition and design of the product, a relationship with the brand where they feel part of it rather than just a customer buying a commodity. You wouldn’t mail order a supercar, you want to come in and meet the team and make sure there are elements of the car that are bespoke to you. I see personalisation very much growing in the luxury world.
Image credit: McLaren