Following the example of the parent company, AMG recently opened its first pop-up store called UNXPCTD in Munich. Pop-up stores are not a new thing. Mercedes-Benz itself is surely one of the most active brands in this sense. Since 2016 the brand started quite a few similar initiatives in Europe, Asia, and the US. Before these, it had already extended the concept of car dealerships with the “me Stores”. In proper luxury automaker style Mercedes me Stores included “information, consultancy, restaurant, and events all rolled into one”, and as CEO Ola Källenius said:

“All Mercedes me Stores, with their welcoming bistro and event concepts, are designed to appeal to both young and new customers”

The German company is not the only one of course. Other players such as Jaguar Land Rover, Ford, Audi, Porsche, Lamborghini and, Tesla also adopted this model.

However, this time is different. In 2020 and 2021 there has been a return to this model with several new initiatives for two main reasons that distinguish this “wave” from the previous ones.

A New Motivation

The first reason is, of course, the virus outbreak. The continuous change of conditions and the uncertainty in several countries forced OEMs to be more cautious and adopt a more flexible model that required a minor commitment. Hence, the pop-up setup.

The second reason is well-expressed by Porsche’s latest initiative announced at the end of the year. The automaker is set to open almost 40 new locations. Naturally, these will not be the regular car dealerships that we are used to seeing. They will be split into two different types of locations called Porsche Studios and Porsche NOW. While similar in concept, the first will be permanent while the second will be a pop-up shop, so only temporary. For both these new stores though, the most important aspect is enabling a direct connection with the target and new audiences.

*Source: Porsche

Data has become the most important currency in any industry to understand customer preferences and behaviour. In-car software provides a lot of it, so automakers need to close the gap. The aim here is to reduce the distance between OEM and customers, and the traditional car sales process is increasingly detached and outdated. Alternative sales models offer a more direct point of contact with the customers allowing manufacturers to gather crucial information.

Advantages of pop-up store models

Pop-up shops fit into this changing scenario in several different ways.

As mentioned, they offer more flexibility as they are not permanent by definition. Thanks to this, brands can also attach special events, or limited-edition merchandise releases that further increase the “hype” from enthusiasts and grow the word-of-mouth effect.

Since they are only temporary and most of the time small, they are placed in very strategic positions. The location plays a crucial role. For instance, it is possible to find them in large malls or shopping centres. Regardless of the interest of a single individual, such locations grant a continuous stream of people, giving much more exposure to the brand than normal dealerships that are usually located in more peripheric areas, and clustered with other similar activities.

Also, with these, the automaker brings the product and the brand to the audience and not vice versa. Porsche’s Sales Retail Director Marco Kana said:

“With the urban sales' formats, we have sought and found new ways to reach customers. Whether it is a Porsche Studio or one of our Porsche NOW sales pop-ups, these innovative formats offer easy access to the brand and are ideally suited to developing contact opportunities with new target groups”

A pop-up store, in fact, can be more focused on the simple marketing activity. Along with selling cars, these spaces are focused on delivering the brand experience and identity through digital integrations (i.e. Mercedes placing an F1 Simulator in its Liverpool pop-up store a while back), test drives, and just the overall environment. And this in turn creates a true and direct connection with the public that can become brand loyalty, which is extremely difficult to achieve through other forms of advertising.

Most of all, in fact, they offer a smart way to promote a brand. Today advertising has often a negative connotation. Ads are often considered just interruptions in social media content consumption or annoying pop-ups, and new generations end up paying to get rid of them. Pop-up stores offer the opportunity to engage with potential customers delivering an engaging experience to those who want to. And they provide instant gratification.

The Next Step

Going back to AMG’s initiative, along with pop-up store, came also a survey aimed at improving the understanding of people’s preference when purchasing a performance car entirely online.

The importance of these new sales models, in fact, is also in the fact that they represent a departure from the traditional process, and a step toward online sales. The chip shortage meant that in many markets dealerships faced (and are facing) a severe lack of availability, which is causing a bubble in pricing for both new and used cars.

While dealers might somewhat benefit from it in the short term, the overall direction of the market is as much toward EVs as it is toward online sales.

Estimated rate of new car sales purchased online in the United States, Europe, and China(2020-2025)

*Source: Statista

Back in 2019 Tesla announced that it was adopting a 100%-online-sales policy, maintaining fewer locations with the main function of delivering services to the customer, while maintaining just a small stock for customers who decided to come in and buy a car right away. The same year 78% of its Model 3 sales were completed online, and up to 82% of the buyers did not need a test drive. In a similar way, Volvo confirmed that by 2030 it will only sell electric vehicles and shift to online sales. Its showrooms will become centres for servicing, models’ display, pick-up of new vehicles delivery, and other services to the client.

VW too, upon announcing its sales model restructuring through online platforms, teased five new sales formats including city showrooms and pop-up stores. It then visualised also the “dealer of tomorrow”.

*Source: VW

Online sales will mean a much shorter value chain and more transparency and consistency for customers. Ironically, this translates into an even closer relationship between OEMs and clients, thanks to the access to a bigger volume of data on purchasing behaviour and preferences. So, with electric mobility developing rapidly, every major automaker is also investing to develop its sales model in a new direction that increasingly involves digital touchpoints and transactions.

Digital Sales Matrix

Some Conclusions

Technology and digitalisation are changing the automotive industry in every aspect. Not just that of the final product. Car manufacturers are experimenting with different solutions, and gradually moving away from the traditional sales process.

New experiences like pop-up stores have become a popular way for automakers to promote their products and connect in a new and positive way with existing and new audiences. As a consequence of the pandemic, they also offer a more flexible and less risky way for OEMs to approach direct promotion. Covid-19 also brought a sharp increase in online purchases, and every major automaker is developing digital platforms. Automotive E-commerce developer GForces claimed a 1228% rise in online transactions in 2020.

Car dealerships as we know them today are changing for good. The viable path for them will be to transform into integrated touchpoints within the automaker ecosystem, providing a range of services, from car servicing to financial advice, and more. An ecosystem that will be complemented by online platforms and alternative models, like the ones described above. Thanks to data shared at different levels, and technology these will integrate digital and live services to offer a new and more transparent experience.

A few days ago Lamborghini has finally revealed its NFT project teased in December. it is one of the most creative, if not the most creative one seen so far in the automotive industry, with one important twist. And, as imaginable, it was a successful one as well, with all the five NFTs selling for a total of around $659,636.

As discussed a few weeks ago, when I introduced the topic in the article NFT in Luxury automotive: Ferrari and Lamborghini jump in, Lamborghini along with Ferrari is just the latest of an increasingly long list of automakers and high-profile brands to enter the NFT space. However, the non-fungible tokens' market is still in its infancy, and for as much potential it has for the future, there is still a lot of uncertainty regarding the legality of many initiatives that pop up daily on the internet. For this reason, there is still quite a lot of hesitation from the public, especially that share of people not into new tech, or the Web3 concept.

Lamborghini as many others does not seem to have any doubt about the future of this technology but actually bets on it with an innovative approach that no other automaker has matched so far.

So, how is the NFT space developing? Why Lamborghini would want to enter it? And how is the Italian brand setting itself apart from the competition?

The NFT market at the start of 2022

Despite all the uncertainty, the NFT market, like the rest of the blockchain-based technologies, has grown exponentially in these two years of pandemic, especially in 2021.

While according to a report from Reuters, the volume in 2020 reached over half a billion US dollars, in 2021 different platforms reported sales volumes all in the order of several billion. Chainalysis though claims that this market also suffers from significant trade washing. Meaning that buyer and seller is the same person completing a transaction from two different wallets. This, as it happens with cryptocurrencies, is done to deliberately drive up the trade volume of a specific asset or crypto eventually increasing its value. While according to the analysis a sizeable amount of profit was realised by trade washing NFTs (over $8.4 million) this has probably not impacted as much the overall token-related crypto transactions’ volume set at $44.2 billion in 2021. NFTs’ largest platform OpenSea also went back and forth on its unlimited NFT minting tool as it is has been prone to misuse.

Value of sales sent to major NFT platforms in 2021 (in $ million)

*Data are for ERC721 and ERC-1155 NFT Contracts (from Jan to Dec) Source: FT via Chainalysis

The sudden growth in transaction volume over the summer from July and August on, up until December when it slowed down significantly could have different explanations. One could be the general amount of disposable income left by the pandemic’s impact especially with travel restrictions, as discussed in Why 2021 was a record year just for Luxury Automotive, which positively affected the luxury automotive market too.

Secondly, the fast increase of collections available on OpenSea has likely been a consequence and cause of the transactions’ volume development. Data from the previous graph and the weekly number of NFT collections available show a positive correlation.

Value of sales (in $ million) against Collections available on major NFT platforms in 2021 

*Source: Chainalysis

Lastly, according to other sources, this sudden interest would have been driven by a few popular collections such as CryptoPunks, traded over 2,800 times in August alone. This data is interesting when put into the general context of the NFT market.  

Its structure gives an interesting indication of its current direction. The graph below shows the best-selling categories over one month between December 2021 and January 2022.

Number of NFT sales in popular categories over 1 month period

*Source: Nonfungible.com

This data indicates the current speculative nature of the NFT market, but also a sizeable volume of different segments that will be interesting to follow in the coming years, as awareness and new ideas develop.

How Lamborghini got into it

In December Lamborghini teased its new project through the hashtag #ToTheMoon. And indeed, with an attitude always projected into the future, it was aiming there. The automaker partnered up with Swiss artist Fabian Oefner, already famous for his photographic work, his colourful pieces created through scientific processes (such as magnetism used with specific liquids) establishing a direct connection with nature, and his cars disintegration (figurative). The latter consisted of high-quality models dismantled with each component carefully placed to simulate the car exploding. The same effect is reproduced in Lamborghini’s project too, but with real car components.

*Fabian Oefner "disintegrating" Ferrari 330/P4

With regards to this idea Oefner said:

“This is about capturing an artificial moment in time. It is about capturing the exact moment a car explodes, when in fact, there’s never been such a moment. What looks like a car falling apart is in fact a moment in time that has been created artificially by blending hundreds of individual images together. There is a unique pleasure about artificially building a moment…freezing a moment in time is stupefying”

Lamborghini collaborated with NFT Pro and auction house RM Sotheby to develop the project and start the bidding for these NFTs on the first day of the new lunar year. February 1^st.

But the references to the moon and space exploration do not end there. Each auction for one of the five NFTs created lasted 75 hours and 50 minutes, matching the time it took the Apollo 11 to reach the moon’s orbit.

Oefner realised five images of “exploding” Aventador Ultimae with the same principle as before. These however are set in space. The picture background is photographed by a weather balloon sent to the stratosphere. Then the artist crafted each image from over 1500 shots of single car components. But here comes the most interesting part of the whole project. The one that makes it unique and sets it apart from any other NFT released by other automakers.

Lamborghini paired each image with a physical object called “Space Key”. Each Space Key is actually a carbon fibre piece that was sent to a space station for research in 2020. Once back, they have been engraved with a QR code that links to the digital image.

Finally, each auction that exceeds a certain value, will be accompanied by a Samsung 65’’ TV with a wide-screen image of Oefner’s artwork, his original signature, and customised TV frame.

What it means for the brand

Lamborghini found a brilliant way to bridge the digital asset and the physical unique item. It managed, in one single move, to reiterate its uniqueness, and create something that will not only appeal to tech enthusiasts, but also to other audiences that are approaching NFTs and will be much more likely to show interest in a project that includes an extremely rare physical piece. In this case, a key to “open” a beautiful artwork.

This project can benefit Lamborghini in different ways.

First of all, it is a communication masterpiece. As said by the artist: “The Ultimae is no longer a car, it has transformed into a rocket, reaching for the stars”, and this is pretty much what Lamborghini is about, what it should feel approaching this brand. In this era of automotive transformation, Lamborghini has more than ever the opportunity to be that “trendsetter” it claims to be in its publications.

As NFTs’ popularity increases, this project will most likely remain as a great example in the minds of many, and not just car enthusiasts. So, it could even strengthen its image in the eyes of a wider audience.

Secondly, the project was pretty successful. Of the five NFTs sold, the top bid reached around $203,636. Considering it was the first auction and only the first “drop” (there will be more), they will most likely appreciate in the future. Even though the NFT sales that make the news are the multimillionaire ones (and there have been quite a few by now), the vast majority of them goes for a few hundred dollars.

As automakers increasingly diversify with complex strategies that include ever more touchpoints aimed at improving the brand’s reach, NFTs represent a unique opportunity. Especially for luxury and aspirational brands. As fashion apparel or limited edition items for clients are now important strategic tools for most automakers, NFT can quite easily become one too in the future, bringing the additional benefit of the appeal to younger generations.

In Conclusion

The first NFTs corresponding to physical art pieces came out a while back (Damien Hirst paved the way), but while Lamborghini has not been the first to develop such a concept, it surely executed it in a creative way giving birth to a very rare digital and physical asset.

This first foray has been a remarkable example of how NFTs can become powerful marketing tools. And this one has been realised in the most “Lamborghini way” possible, strengthening its message and identity.

Its success further proves this new platform’s potential, and the uniqueness of the approach that distinguishes Lamborghini from the competition even beyond its supercars. But this NFT drop also demonstrates how we are moving into a new era and gives a hint on what this space can become once it matures and sheds all the unnecessary, speculative appendages.  

Just a few days ago Gordon Murray made the headlines again with his company Gordon Murray Automotive (or GMA) and their latest creation. The T.33.

Right from the first look, the car seems familiar, yet different from anything else that arrives on the market today. Which is probably exactly what designers and engineers at GMA were going for. Powertrain and interior, in fact, convey the same message.

In a way, this T.33, like the bigger sister T.50 a while before, aims at preserving in the purest way possible those characteristics that make car enthusiasts fall in love with the sense of speed and the feeling of driving fast.

This is a field in which the phrase “without compromises” is used (maybe too) often. The truth is that almost always there are indeed several compromises made for a number of reasons. Regulations, industry standards, market research, wider market coverage, and so on.

Looking at what Gordon Murray Automotive is doing, and how they are doing it, makes it clear how this is probably the closest anyone has got to that “uncompromising” experience in recent years. At least in what the company is aiming for. The ultimate driving experience. This unique approach is enabled first of all by the name, capabilities, and reputation of the person behind the brand. Secondly, as Mr. Murray said himself, they are able to do what other automakers cannot thanks to their small size and really limited production.

So, let’s have a closer look at what this company is doing differently within this competitive space, and why it should work. But first, a look at its founder’s career, and why this young company already enjoys such a high reputation.

A bit of History

Simply put, Gordon Murray is a true motorsport legend. Automotive and Formula 1 car designer and engineer, he is an important personality within the industry and the father of some of the most iconic racing and road cars ever produced.

In ‘67 and ’68 he raced in the local National Class with the car he designed and built in his home country, South Africa.

A year later, he entered the world of Formula 1 where he remained for the following 20 plus years. He initially joined the Brabham team that started racing in Formula 1 in 1962 as a designer. In 1973, soon after the team was bought by Bernie Ecclestone from Ron Tauranac, Murray was promoted as Chief Designer.

He was the man behind the design of the famous 1978 BT46B  also called the “fan car”.

*Brabham BT46B, photo by Edvvc

Murray adopted this solution to try and compete with the dominant Lotus 79, the car that perfected the previous concept developed by Colin Chapman, Tony Rudd, and Peter Wright took full advantage of the ground effect. They were the first to use the Venturi effect, which is still used today in racing cars and road-legal sports cars, to create an area of low pressure below the vehicle which increases the downforce and thus, improves its cornering speed.

The large fan at the back of the car was Murray’s response to Lotus innovation, or as he said himself: “it was born out of necessity”. As it often happens in Formula 1, he took advantage of a loophole in the regulations which stated that no movable device could be used for primary aerodynamic advantage. So, he passed the fan’s main function as a cooling solution for the car’s engine. The result though, was that sealing the underside of the car’s body, the fan created an immense suction effect giving the BT46B a significantly higher downforce.

To try and pass under the radar making the car look not very quick, Brabham went into qualifying with the full tank of fuel, making the car much heavier. During the race, it was a different story, and the BT46B won with a 34 seconds margin in its first and only race. It was withdrawn right after in fact, due to pressure by the other constructors and drivers complaining that the car picked up dust and rocks through the fan becoming dangerous for those following.

*McLaren MP4/4

Murray went on to design the competitors on which Nelson Piquet won the 1981 and 1983 World Championships. In 1987, he was offered the position of Technical Director at McLaren. He collaborated with designer Steve Nichols and Neil Oatley to develop the race-winning MP4/3 and the successive MP4/4 and MP4/5 that between 1988 and 1990 won 3 Constructors’ Championships and 3 Drivers’ Championships.

In 1991 after leaving Formula 1, he worked for the then-called McLaren Cars company. There he headed the team that developed one of the most iconic and universally praised (and today, most valuable) supercars. The McLaren F1. It has been for several years the fastest car on the planet thanks to its many innovations. The carbon fibre monocoque, the fans (following the concept of the Formula 1 car, but with a different implementation), and the use of other rare materials, all contributed to make the F1 the real benchmark for supercars throughout the 90s and into the 2000s.

*McLaren F1

After the experience with McLaren in 2007 Murray set up his own company. Gordon Murray Design Automotive Limited. They developed concepts for a small city car in 2010 and its electric version in 2011, as well as a new design, develop, and manufacturing process called iStream. This promises to deliver better results, more efficiently and with better results.

Apart from these, the company remained dormant up until 2018, changing its name to Gordon Murray Automotive in 2015. This is up until 2020.

T.33: a unique way

The new car priced at “only” £1.37 million, is almost half of the T.50 and is conceived to be a more civilised and usable high-performance sportscar. The first adjective we see associated with the new T.33 is “Timeless”. Mr Murray repeats it more than once in the several interviews he has released in these days. As he did for the t.50 in 2020 (if we do not consider the giant fan at the back of the T.50).

• The first aspect that strikes as different in this company’s approach is, in fact, the design. Both the models released are extremely simple, and clean. According to their creator, today in automotive too much is done for the sake of aesthetics that in a few years will look outdated. Maintaining an essential design is what will ensure that timelessness even many years from now.
  The theme is carried inside as well. Everything looks essential, without coloured screens or other cosmetic features. And everything is done only for the driver.
  
  *T.33 interior

• Secondly, the powertrain. Both the cars feature a naturally aspirated V12, something that has become very rare in the modern industry, mostly due to environmental regulations. And it must be noted that Mr. Murray also said his next cars will also be hybridised.

• The third is weight. T.50 and T.33 weigh 980, and 1,090 Kg respectively. Less than any other competitor on the market today, and by quite a margin. This gives these cars a better power-to-weight ratio than most of the others, despite having power figures that do not seem outstanding by modern standards. The T.50’s engine makes 650 hp, and 606 on the T.33.
  
  *T.50 rear view

• Finally, transmission. The T.50 is only produced with a manual gearbox. For the T.33 also the automatic transmission option is offered but according to Murray only a small fraction of the clients required it, while all the others went for the manual. This is the last piece of the puzzle to offer the ultimate driving experience.

These four elements, in Murray’s vision, make everything that is needed (and is lacking in today’s market) for the best experience in a supercar.

As for the other principles driving GMA, they are similar to what other companies do. So, premium materials, the best quality possible, in-house engineering of the highest level, exclusivity, and unique customer journey.

But how can GMA get away with doing the things they want to first (not to say they ignored or did not have conversations with their clients), without following any trend, while many other companies are much more subject to customers’ requests, and preferences?

• First of all, GMA is a small company, which makes it more flexible compared to larger automotive groups. They do not have to respond or meet shareholders' expectations or targets.

• GMA is a young company. There are no specific expectations on its products. So, carried also by the strong name of its founder, they can be real trendsetters. They can search and do something that nobody else does. Which is very similar to what Christian von Koenigsegg stated about his company a while back.
  
  *T33 rear view

• Their production is extremely limited. Each model will be produced in only 100 units, with 25 more for the track version of the T.50. 200 more cars will be produced on the same platform of the T.33 but Murray ensures that they will be very different models. Such limited production enables the manufacturer to produce everything in-house and come up with different solutions. At the same time, such a limited and unique product, coming from the creator of the F1 himself, will also hold a special appeal for any supercar enthusiast and owner.

• They are effectively trend-setters. Which by definition take more risks, not following any current, or chasing what other brands are doing.
  Even more, GMA is actually reversing some trends. Simple and almost classic designs instead of aggressive and futuristic-looking ones. Obsession with weight instead of power. These are just two examples, and considering that most of their slots are already sold out, they must be onto something.
  This comes from a long past experience in motorsport that is updated and brought directly into the modern days. And the confidence of knowing better what makes for a great experience, and what will clients ultimately appreciate.

On Monday, Maserati announced its entry in the Formula E Championship starting from the 2022-23 season. This is not just a first for the Trident house, but a first for Formula E itself which sees the first Italian manufacturer entering the Championship, and a first for Stellantis that through Maserati gains access to the top of electric vehicles’ racing, and to an important testing platform for future developments. As said by Senior VP of Motorsport, Jean-Marc Finot:

“Beyond this piece of history, Maserati Formula E will be our technological laboratory to accelerate the development of high-efficiency electrified powertrains and intelligent software for our road sports cars”

About Formula E

Formula E will be on its 9^th season next year. But the most important news, on which Maserati is most likely betting, is the introduction of the 3^rd Generation (or Gen3) of the car. It promises to be lighter, more powerful, and overall more evolved than its predecessor. It should be a significant step forward compared to the current Gen2 Evo even in terms of looks, to try and make the sport more appealing.

Gen2 cars weighing at a minimum of 900 kg, have raced with a power between 200 and 250 kW (335 hp) in race and qualifying mode respectively, and a maximum speed limited at 280 km/h. The new one will weigh 780 kg, and produce 300 to 350 kW (470 hp) in race and qualifying mode, with a top speed that could go up to 322 km/h.

Keeping in line with its message, there will also be an improved focus on sustainability. Along with the best energy efficiency possible, the cars will be developed around a full Life Cycle Assessment, to retain its status as the first fully net-zero carbon footprint global sport. So far, the organisation has offset its carbon emissions thanks to initiatives certified by Verified Carbon Standard (VCS), Clean Development Mechanism (CDM), and Gold Standard (GS), all drawn around the Kyoto Protocol.

Gen3 cars will make more extensive use of sustainable materials. Consumables such as tyres, batteries, and even broken carbon fibre parts will be investigated to improve their lifespan, as well as their end-of-life/recycling processes.

Over the first 7 seasons, the sport's popularity increased quite significantly, peaking during the 2018-2019 season, with 411 million unique viewers. The next year was heavily impacted by the pandemic, and even though the 2020-2021 season displayed a good recovery, it did not quite reach the level of 2019. One positive data highlighted by ABB Formula E however is that the live audience was the highest ever.

Formula E unique viewers by season(in million)

Despite the increasing audience, revenues fell by 11.5% to €142.8 million due to races cancellation and sales prices decreasing. The key objective is still to reach profitability, but the upcoming financial regulations and car changes could have a positive impact.

Starting from seasons 9 and 10, in fact, the sport will impose new financial caps for teams and manufacturers. They will have a maximum expenditure of €13 million and €25 million per season each. The limit for the teams will be increased to €15 million from the 11^th season. These have been devised by the FIA management along with the teams to help the long-term sustainability of the championship.

In the meantime, along with Maserati, Formula E continues to receive the support of several high-profile manufacturers such as Audi, BMW, DS Automobiles, Jaguar, Mahindra, Mercedes, Nio, Nissan, and Porsche.

Formula E within Maserati’s Strategy

The entrance into the electric racing championship is only the last step of a long restructuring process for the Italian automaker. It started back in 2019 with important changes at the top of the organisation’s management after two bad years, and an extremely negative 2019 when the majority of the competitors took advantage of a healthy and growing market instead.

Since then, Maserati has successfully presented to the world its new super sports car MC20, which in the company’s representatives words would have marked the OEM’s return to racing.

*Fangio competing in F1 with the Maserati 250F

A racing history started in the early 1900s, with the Tipo26 whose name 26 indicated the year in which it first competed. It then followed in the 30s with several victories at the Targa Florio, and several successful participation in the World Sportscar Championship (now WEC) throughout the 50s. During these years it also took part in the Formula 1 Championship reaching victories and famously, the title in 1957 with Juan Manuel Fangio driving the 250F.

Followed more competitions in rally and touring series, up to the FIA GT Championship in 2004 in which Maserati participated with its MC12 derived from the Enzo Ferrari’s chassis. Its campaign successfully continued up to 2010 with 6 Teams’ Championships, 2 Manufacturers’ Championships, and 6 Drivers’ Championships.

*Maserati MC12 racing

Now Maserati is keeping its promise, but probably not quite like some expected. So, instead of going racing with the MC20, the OEM enters Formula E.

This, of course, is still extremely important (probably even more so) for the company’s medium to long-term strategy, as electrification gains importance, and Maserati brings forward its “Folgore” line-up (thunderbolt in Italian).

So far, the automaker has introduced two mild-hybrid versions of its existing models Ghibli and Levante both featuring a 48V motor paired with the 4 cylinders 2 litres engine. Electrification was supposed to arrive already in 2021 with the all-new GranTurismo and GranCabrio, only teased in camouflaged shots so far. The models have been delayed as it has the upcoming crossover Grecale, the smaller sister of the SUV Levante.

In terms of sales, 2020 was an even worse year for Maserati. This time though it was not alone, as almost every automaker, except those in the top-end of the luxury market, have been hit hard by the pandemic. The first half of 2021 had instead shown strong recovery signals with over 100% increase y-o-y, but that was mainly due to an overall market recovery. Sales of around 11,000 units in the first six months indicate that the automaker could even exceed its 2019 figure of 19,000. This year, however, minor problems have still been caused by the pandemic, along with the mentioned delay of the new models sparked by the chip shortage discussed in a previous article.

*New Maserati GranTurismo

Overall, even with setbacks caused by major industry factors, Maserati has shown important recovery signals and some interesting choices aimed at properly relaunching the brand. In this context, the Formula E entry represents an important opportunity both in terms of technological development and marketing.

For the automaker’s marketing, the Formula E championship is more of a bet on its future. But still a pretty safe one. In the best-case scenario, if the popularity of the sport keeps growing it could contribute to putting back Maserati as a prominent name in motorsport, as well as a name synonym with innovation and performance in the luxury electric mobility space.

If Formula E does not get the popularity many are hoping for, Maserati will still have the opportunity to reap the rewards of technological development and a boost in visibility and brand image with a niche of fans and enthusiasts.

Finally, it is important to note the opposite dynamic as well. In important markets like the US, where the Italian brand is very popular, the Maserati name could attract new fans to the sport increasing its following.

A honourable mention

In September 2020, as is required of any proper luxury manufacturer, Maserati launched its personalisation program: Fuoriserie.

This division adds prestige to the brand, especially on the occasion of high-profile partnerships like the latest with David Beckham for a one-of-a-kind MC20. The new motorsport initiative too can offer important synergy opportunities, like others are doing. One good example of this is Aston Martin that has used its recent entry in the Formula 1 championship on different occasions for special editions or unique specifications of its road cars.

Maserati can use its renewed motorsport activity to create a unique heritage thanks to the all-important personalisation in the modern luxury automotive market.

NFTs (Non-Fungible Tokens) have been around for a while, but only in 2021 we have seen this space literally boom. And this trend in technology directly linked to that of cryptocurrencies and blockchain, among others, is gradually affecting every industry in different ways.

NFTs are unique digital assets, corresponding to a unit of data stored on a blockchain. The blockchain technologyhas already proven to have a lot of potential for significant applications in automotive. In the case of NFTs, it ensures the authenticity of ownership through the digital ledger. This means that while an image, photo, video, or audio can be copied as any other digital piece of content, its ownership is securely determined.

In a world increasingly moving toward a digitalised everyday life and the creation of a metaverse, digital assets ownership will become key for future transactions and contracts. So, while we are still in the early stages of this revolution, new possibilities opened by this trend have sparked a lot of interest and a huge amount of new ventures. Automotive companies are also entering the space.

Among the first to try it, two examples that come to mind are Nissan and Alpine.

The Canadian branch of the Japanese automaker created an auction for some digital artworks of its iconic GT-R. The artworks realised by a local artist have been priced starting from a little over $200,000 and bundled with a real GT-R Nismo Special Edition that is sold for almost the same price, making the deal much more appealing. Additionally, all the profits above the initial sum have been destined for charity.

A little later Renault’s revamped motorsport brand Alpine sold artworks of its GTA Concept in five different liveries as NFTs. These have been offered then as the first branded models on the blockchain-based racing game REVV Racing where all the in-game cars are actual NFTs.

A lot of initiatives by the likes of Porsche, Maserati, VW (Malaysia), and Rolls-Royce followed these two with their own initial collection.

What about Ferrari and Lamborghini? How is this market developing and what can be expected for the future?

Italian luxury automakers jump on the bandwagon

Around a month ago, Lamborghini teased a new project under the hashtag #ToTheMoon and similar posts on social media have been published since. While the automaker has not revealed much yet, at the end of a few short trailers the NTF Pro logo appears. Lamborghini itself is featured in NFT Pro’s videos and appears in the long list of high-profile clients and partners (Juventus, Adidas, Atari, Accenture, Deloitte, AWS). The company specialises in digital transformation and promotes the importance of this new asset class in future markets through different solutions tailored for each specific client.

Just a few days ago, Ferrari too announced a new partnership in the same direction. The new collaboration is with Swiss technology company Velas Network AG. The company is building a blockchain-based ecosystem of services and products, which as Velas says, aims to “combine the best qualities of both centralised and decentralised solutions”.

While this might sound confusing, in its press release Ferrari tells us a bit more about its objective with this new partnership.

The agreement aims at delivering exclusive digital content for fans. This is an interesting choice, because differently from what we have seen so far for companies like Rolls-Royce, Ferrari did not include just its clients, but also its fans.

The direction is also confirmed by the fact that Ferrari wisely decided to use Velas as its title sponsor for the E-Sports series, both the one-make championship and the Formula 1 one.

Before going on, it must be noted that as of now, NFTs have attracted also a lot of criticism for different reasons. First, due to the carbon footprint and energy consumption required by blockchain’s transaction validation. Second, due to the high amount of scams ongoing as the internet goes crazy for the latest innovation. All of which is also made possible by the fact that these markets, being so new, are mostly unregulated.

It is understandable then why both Lamborghini and Ferrari’s partners highlight the sustainability of their services and the effort and systems in place to grant the highest levels of cybersecurity.

NFT Market and what it means for luxury automakers

The overall size of the NFT market has grown exponentially in 2021. An analysis from Reuters says that the sales volume in the first three quarters of 2021 reached $10.7 billion in value, with the first two reaching “only” $2.5 billion. The frenzy for the new digital asset category seems to have slowed down in the last quarter, where the same analyst reports a total transaction value of $13.2 billion, which while considerable, is far lower than the growth registered in Q3.

Other agencies report different numbers, often depending on the asset category considered, whether is only on the blockchain or not. Nonetheless, it is always in the close-to-$10-billion range.

Another research led by McKinsey into sport-related NFTs reports how this category sales peaked in February at $138 million and dropped by over 90% up to July. This data can be relevant for automakers, as, especially for those involved in motorsport, a Sport NFT trend is definitely more significant than those related to art or other fields.

Sports NFTs sales by Month

*Source: McKinsey

That said, even more interesting is the segment about the buyers' demographic. The same research, in fact, reports that more than half of them are either speculators (which alone account for over one-third of the total) or tech enthusiasts, which also account for almost two-thirds of the overall spending. The rest is composed of collectors and sports fans.

This information paired with the data relative to the NFTs pricing by Reuters depicts an interesting picture.

NFT Sales by Price Bracket

*Source: Reuters

While usually are the big numbers that make the headlines, when a few NFTs sell for millions, the majority of them is comprised between $100 and $1000. All these pieces of information suggest two conclusions. One is that despite what some enthusiasts claim, as of now, the NFT market has really little to do with art. The second is that it attracts a varied audience, not just super-wealthy individuals.

Thanks to their strong branding which is also one of their most powerful assets, luxury automakers can tap into that relatively small audience (at least for now) of fans that want to feel part of the brand. But it does not end there.

A proper dive into this technology like the one that Ferrari seems to be taking can open up many opportunities. Much like what was discussed in the presentation of Unreal Build: Automotive 2021, here too digital assets enabled by new technologies are an unprecedented way to enrich the brand and customer journey. This means that companies can deliver different types of materials to different targets, making the experience much more personalised. For owners with unique pieces that will increase the sense of belonging and the value proposition itself. For fans and enthusiasts something more to nurture their passion.

With the holidays approaching, a lighter theme seems due. So, here is a follow-up on the 2020’s video about Christmas-related automotive social media marketing campaigns and YouTube videos.

For the second year in a row, Bentley published a Christmas video for the holiday. Last year’s one, included in the 2020’s article 5 Christmas Automotive Social Media Marketing Campaigns, showed the Bentley Mulliner division producing a tailored-made Flying Spur for Santa Claus himself. This year, there is another clever idea. When Christmas decorations go missing, Bentley apprentices come together in secret to use their skills and create unique decoration pieces from cars’ materials to save the day.

Another great idea because along with bringing a festive and light atmosphere the video displays the creative potential and craftsmanship abilities of Bentley’s staff. Skills applied for these little creations and the same that are used for each car’s component.

So far, the video has been really successful. Views are, in fact, way above those of other videos published throughout 2021 at over 800,000. Just 13 days after its publication, it is already the 5^th most viewed video of Bentley’s official channel. This definitely shows once more the potential of alternative themes that even when touching the automotive topic only indirectly or through emotional connections, can become even more attractive to the target audience than the regular commercial showcasing the car or its performance.

This is the case for other brands’ similar campaigns too. Here are a few examples.

Proofs from Previous examples

Other companies have not (or not yet) published any special video for the holidays or the end of the year. Nonetheless, the numbers shown in the graph below suggest some interesting observations.

Bentley, Lamborghini, and McLaren Holiday videos' view count against 2021 results

*McLaren boxplot includes both the automotive and F1 channels

Among the automotive companies in the luxury and performance segments, Bentley, Lamborghini, and McLaren are the ones that produced dedicated content for the Christmas holidays in the last few years. As visible from the graph, the dark red points correspond to the holiday videos, and here are compared to all the others published in 2021 by each company. It is not a surprise then, that in terms of views count they are always outliers in the top part of the boxplot.

In the extreme case of Lamborghini, not only all three videos are at the top, but the views exceed those of any other video on the official channel by a significant margin. The video “Lamborghini Real Lover”, at 23,6 million views is not just the most successful video published by Lamborghini, but also one of the most successful automotive marketing campaigns on YouTube overall, behind only Porsche’s “The Heist”, and Mercedes-Benz “Magic Body Control”.

Also, even though Lamborghini has the most prolific channel among the ones in the graph, considering that McLaren content is split into the automotive and the racing one, the number of videos published has no statistical relationship with the channel’s success.

This is evident by looking at the same graph for Ferrari’s channel, the most active by far, with over 1,700 videos published (while Lamborghini reaches “only” 613 and McLaren 1,091 with both channels). Here, Ferrari uploads every piece of content, from Formula 1 to the automotive business, to customer racing, and more. Views are in general much lower than those of its competitors though, and the year-end celebration video of 2020 too is just slightly above the boxplot’s third quartile.

Ferrari 2021 and Year-end 2020 videos views count 

So, as reviewed in the Marketing Racing articles about Porsche’s “The Heist” and McLaren Marketing Strategy there is more involved in the success of social media campaigns.

Other 2021 Campaigns

As mentioned at the beginning of the article, not many other companies have joined Bentley so far this year. McLaren has been the only one so far through different platforms.

On both Facebook and Twitter McLaren automotive is publishing its own version of the “25 days of Christmas”, with the hashtag #25DaysofMcLaren. Each daily post features a short video with a car and some design or technical detail about it.

On YouTube, once again, McLaren went for the Formula One channel for the Christmas video. The element that has proven key to its success on social media is replicated here. The protagonists are the two current F1 drivers Lando Norris and Daniel Ricciardo, and the internet is responding, with the video reaching already over 120,000 views in just 6 hours.

The Formula One team has been the most important communication channel for the brand, ensuring the biggest following in F1 and a huge audience on every platform. Most of the views shown by the boxplot’s outliers are, in fact, from the F1 channel in the graph above.

Another mention goes to Lamborghini which, so far, did not follow up the previous years’ successes. However, it promoted a charitable initiative through LinkedIn for the International Human Solidarity Day supporting the Parents’ Association for Pediatric Hematology and Oncology. The Italian brand also teased something new coming under the hashtag #tothemoon, which will most likely be an NFT-related initiative that could end up referencing the holiday period. This would make Lamborghini the second automaker to enter this new space after Alpine sold the A110 GTA Concept as a Non Fungible Token.

Last but not least, BMW published its own Christmas video. A fun short film in which even actor Christoph Waltz is involved. This one too in just four days has received a lot of visibility reaching over 7 million views.

Edit: Lamborghini too on the 23rd released its usual Christmas Celebration video called "Lamborghini Christmas Gift 2021". With the same narrative of previous videos, Lamborghini shows the true emotions of driving in a Lamborghini.

This year Bentley has got the right formula for Christmas. And as the numbers show these activities can definitely pay off in terms of exposure. We might still see some new interesting campaigns in time for Christmas or New Year’s Eve 2021, in the meantime, I wish everyone a Merry Christmas!

Over the last 20 to 30 years, all the manufacturers in the luxury performance automotive segment have developed various racing programs, for GT series and clients' racing. As the customer journey and experience have become increasingly complex over the years, these racing programs too, in many cases, have become wider and more diversified.

So, what exactly do these programs consist of? What is their importance in the involved automakers’ strategies? And what could come next?

Racing and Development Programs

The most common customer racing programs are the ones in GT racing. Here, there are several different series, either within the same vehicle’s category like GT3: Pro, Pro-Am, and Am (standing for professional and amateur), or different ones such as GT4, or GTE.

Through the Balance of Performance (BoP) mentioned previously in the context of Ferrari’s participation in the new LMH Category, it is ensured that specific restrictions are applied in order to make different models from different manufacturers able to compete with each other on the same level.

While some manufacturers do not develop cars for each one of these racing series, all of them take part in these championships to some extent through official and/or clients’ racing teams.

Type of customer racing activity by Automaker

*Current programs. In the past, some have changed or were stopped

At the beginning of 2021, Aston Martin announced it would withdraw from the WEC to focus its efforts on the F1 campaign. Its return to the Grand Touring competitions was back in 2006 with the previous-generation Vantage. Now it continues the production of both GT3 and GT4 versions of its sports car. Before the change in management and the entry into Formula One, previous CEO Andy Palmer also planned a single-marque Vantage Cup racing series.

Audi, started its program in 2009, with the R8 LMS GT3, and later on expanded it to other categories including three more models: RS 3 LMS TCR, R8 LMS GT4, and R8 LMS GT2. Also, for three years, from 2015 to 2017 Audi organised a one-make series called Audi Sport TT Cup.

Bentley celebrates its over-100-year long history including its first efforts in endurance racing such as the Le Mans 24 Hours in the 1920s, by introducing the Continental GT3 in 2018. The car now participates in different series thanks to various customer racing teams and has distinguished itself on various occasions.

Similar to Audi, BMW offers M Series models for different racing categories. M2, M4, M6, and M8 models are produced for GT3, GT4, and GTE racing. In addition, the BMW M2 CS Racing participates in multiple one-make competitions.

Mercedes too like many competitors introduced its customer racing program in the late 2000s. And with its first competing car, the SLS AMG GT3, already in 2011 it became the most successful new entrant over its first full season thanks to over 20 victories from the 40 vehicles sold to clients. Later, Mercedes introduced also a single-marque series with the CLA 45 AMG and substituted the SLS with the AMG GT3 and GT4.

Porsche has one of the longest histories of all when it comes to customer racing and a wide program. 911 GT3 Cup one-make series has separated events in many countries. Carrera Cups are held in Asia, Australia, Benelux, Brasil, Germany, France Great Britain, Italy, Japan, Scandinavia, and North America. There are other events as well like the Porsche Mobil 1 Supercup, Porsche Sprint Challenge, and Endurance Trophy.

McLaren produces both GT3 and GT4 cars for customer racing starting from its 720s and 570s models. But along with them, it recently introduced the 720s GT3X, which is a different creature, with a different purpose, that we can look at a bit later.

Going on to Lamborghini, the Italian automaker produces both the Huracán GT3 Evo and the Huracán Super Trofeo EVO2. The two cars are respectively used in Grand Touring competitions and in the single-marque Super Trofeo competition organised by Lamborghini. The program started in 2009 with the Huracán predecessor Gallardo but has always been reserved to the smaller sister of the house, not involving modified flagship cars.

This was up until one year ago with the introduction of the racing car Essenza SCV12, which in some ways is comparable with the aforementioned McLaren 720S GT3X and with the cars produced by Ferrari XX. These models are not intended for proper racing. They are not developed around a racing series, but they still effectively involve clients driving track-only cars. For instance, XX is a special program introduced earlier than the others, in 2005. It develops highly limited track-only versions of Ferrari’s most important cars. So far the line includes FXX and FXX Evo from the Enzo, 599xx from the 599 GTB, and FXX-K and FXX-K Evo both from the LaFerrari. These are kept by the company, not the owners, and delivered to the tracks on occasions of special organised track days where the clients helped by Ferrari engineers and technicians can enjoy the most extreme driving experience.

*In order Ferrari FXX-K Evo, Lamborghini Essenza SCV12, and McLaren 720S GT3X

This program is explicitly intended by Ferrari as a testing platform that involves “a group of special customers in the development of the Ferrari of the future, asking them to help provide Corse Clienti engineers with information”.

All these are part of an ongoing trend, well expressed by Stephan Winkelmann’s “What if…” when talking about Bugatti’s Bolide project. With these vehicles, automakers look for the absolute extreme in track performance without the need to abide by any restriction.

Corse Clienti is the name that indicates the overall group of activities comprised of XX Programme, F1 Clienti, with which Ferrari sells to clients previous seasons’ F1 cars that are then delivered to track days and driven on the same occasions as the XX ones, and finally the single-marque Ferrari Challenge.

Last but not least Ferrari also participates with its 488 GT3 Evo in GT and endurance competitions.

Racing divisions development

The graph shows how from the 2000s and especially toward the early 2010s the major companies involved in GT racing through customer racing programs increased their production and range variety.

Racing cars produced since 2020 by Automaker

With Porsche and Ferrari leading the way as they already had established their own one-make series, for instance, others followed over the last decade. Apart from McLaren Automotive that is effectively just 10 years old, others like Mercedes AMG, Lamborghini, and Audi, started to those years to significantly enrich their racing car offering.

Two seem to be the main reasons for this increased attention to motorsport divisions’ development. One is the overall increase in wealth in developed and developing countries such as China that translates into higher demand. According to a recent report by McKinsey, in fact, the global wealth over the last twenty years tripled, with China overtaking the US and leading with a big margin.

Secondly, the influence of the entertainment industry, especially with video games has gained massive importance over the same period and mostly with younger generations that by now have become adults with proper buying power. Among many, last week’s article about Porsche’s Vision GT is a clear indication of the importance of this sector.

But what is next?

First of all, Porsche again has shown its own vision in terms of automotive products with the Mission R presentation in Munich. Electrification is likely to make motorsport activities more accessible for a wider demographic thanks to reduced costs, so, the increase observed over the last decade could continue in the coming years.

Considering the increasing integration between virtual and real-life motorsport, OEMs could improve their opportunities by creating more dedicated programs, courses, or initiatives during events (outside of the already present highly selective ones such as official Formula 1 E-sports teams) aimed at attracting new generations into sim-racing which could be beneficial toward different purposes. First, creating interest in the sport from a young age as it has been happening so far, and increasingly in these last few years. Secondly, improving brand loyalty, and finally, creating opportunities for new talents to be discovered. These would complement well already existing and less accessible young driver programs.

*Cover image by Lamborghini Media

On Monday Porsche revealed its Vision GT Concept. A futuristic racing car that will be featured in the upcoming Gran Turismo 7 releasing early in 2022 as a Play Station exclusive.

*Source: Porsche Media

This is only the latest concept designed by an automaker for this series developed by Japanese Polyphony Digital. And Porsche has been featured in it since 2017, right after the expiration of its exclusivity contract with Electronic Arts.

Even before the announcement, the partnership between the German automaker and the Japanese developer was evident as several other Porsche’s vehicles were heavily featured in the new game’s trailers over other brands.

But what is the impact of the Vision GT project for an automaker? And how has the game impacted the younger generations and OEM’s marketing?

Gran Turismo and Polyphony

Polyphony Digital, like a number of different smaller game developers, is a subsidiary of PlayStation Studios a division of Sony Interactive Entertainment since 1998.

The Studio was actually founded in 1994 under the name Polys Entertainment, and it was in this period that the first Gran Turismo was released for Play Station along with a couple more titles. The success was immediate, and since then it has remained pretty much the only franchise developed by Polyphony with 12 editions released so far.

The first edition alone sold an estimated 10.8 million copies. And the trend continued. According to Goodwood’s website, the Gran Turismo franchise sold over 85 million copies worldwide which puts it in third place among the best-selling racing games of all time. Head of Polyphony Digital Kazunori Yamauchi, in an interview earlier this year, confirmed the success of the latest release Gran Turismo Sport (2017) reaching 9.5 million users.

The game’s popularity has increased as well on streaming platforms after the pandemic. With people forced at home, virtual entertainment experienced a massive boost as highlighted in the article How Covid-19 Turbocharged the E-Sports Racing Industry for official e-racing competitions. The same happened for enthusiasts’ streaming channels with some of the most popular sim-racing platforms such as iRacing and Assetto Corsa reported with the Bentley and Fanatec Partnership deal.

Gran Turismo Sport, since its release in late 2017, experienced the same growth from 2020 on with a peak in viewership of over 30,000 people on May 14^th, 2020, which is very good considering the game was already almost 3 years old.

Gran Turismo Sport Twitch Channels and Viewers ('000) since 2017 release

*Source: Twitch Tracker

Its presentation trailer released on YouTube in June 2020 has so far reached 10.7 million views, and it is only slightly behind a Need for Speed one from 2019 that reached 11 million clicks as the most-watched racing game presentation trailer. It is also ahead of its most direct competitor on Microsoft’s platform Xbox, the Forza franchise.

So, it is clear how Porsche’s and other automakers’ investments in the development of these concepts, which are usually realised as full-scale models too, has an important return. The capacity of influencing young generations of enthusiasts by transforming them into brand supporters and potential future clients. As mentioned by Luca Venturi during our interviewsome of those who went on to buy a specific luxury performance car as adults were influenced in their choice by the games they played and “their dreams” as children.

The concept is confirmed as well by Porsche’s Vice President Marketing Robert Ader claiming:

“We can engage young and digital target groups in the place where their automotive dreams are born: the world of gaming”

Not just videogames

Polyphony Digital has joined the FIA in a unique long-term deal for two official championship series: The FIA-certified Gran Turismo Nations Cup and FIA-certified Gran Turismo Manufacturer Fan Cup.

The series of events, and especially the World Finals in 2019 involved a number of personalities including several well-known internet celebrities as well as Formula One drivers such as Lewis Hamilton and Max Verstappen. This kind of participation and media coverage gave the Gran Turismo Championship huge popularity and several million views.

Additionally, involving this kind of audience, not only promotes easier access to motorsport to a wider audience but introduces also the possibility of a transition from sim-racing to real-life racing. By fulfilling a series of requirements, gamers can become eligible for the “FIA Gran Turismo Digital Licence” from their local national sporting authority.

All these factors combined created the incredible appeal of the Gran Turismo Franchise. And this is the reason why so many brands bought into this marketing opportunity with the likes of Lamborghini even presenting its concept officially during one of these events.

*Lamborghini V12 Vision GT

Along with Porsche and Lamborghini, in fact, other brands that since 2013 participated in this project are: Alpine, Audi, BMW, Bugatti, Chevrolet, Daihatsu, Dodge SRT, Honda, Hyundai, Infiniti, Jaguar, Lexus, Mazda, McLaren, Mercedes, Mini, Mitsubishi, Nissan, Peugeot, Subaru, Toyota, Volkswagen, and Zagato.

Vision GT

The Porsche Vision GT will be only available in the upcoming game, and apart from the full-scale model it will not be produced in any other real-life form. However, the release of this model shows again Porsche’s forward-looking approach to the market.

A team of young designers that developed this car, had much more freedom not being constrained by real-life restrictions and technical requirements. This is not to say that the car was developed just to showcase an eye-catching yet unrealistic design. It actually appears much more grounded in reality than several concepts developed by competitors, while still looking at the future.

The company, in fact, highlighted how the Vision GT is undeniably Porsche bringing the brand’s DNA into the design with specific cues such as the low sloping lines, pronounced wheel arches, quad headlights, and rear light bar recalling the likes of Porsche Taycan and 911 992. In the presentation, they also took the time to showcase the team’s attention to sustainability pointing out how the concept was entirely built using sustainable materials. And finally, they provided technical details about its performance as well:

• Acceleration 0 – 100 km/h: 2.1 seconds
• Acceleration 0 – 200 km/h: 5.4 seconds
• Top speed: 350 km/h
• Peak power: 820 kW (950 kW with overboost & launch control)
• Battery size: 87 kWh
• Range: 500 km (WLTP)
• Drivetrain: all-wheel drive

However, one element that was not mentioned but probably shows even more how the company is looking at its future market is this design’s resemblance with that of the Mission R presented at IAA in Munich earlier this year.

Several design elements in the front and even more in the back, as well as the overall shape, are clearly born from an evolving but univocal and cohesive design language.

A rumour that started right after the unveiling of Munich hinted that Porsche might have planned to introduce the Mission R as a substitute for the stagnating 718 line by 2024. This would be appealing for the young audience in China (Porsche’s biggest market), where the average 718 buyer is 31 years old. Porsche is also going to make the new Mission R its most innovative model in terms of interior technologies, once again showing its focus on the younger audience that this car is more targeted towards. In this context, creating the “hype” for the brand and, even more, for a specific design language in the audience that in a few years might be able to afford a sports car makes even more sense.

With the goal of creating an immersive and long-lasting brand experience, Porsche enhances its digital entertainment partnership making it an integral part of its marketing mix.

*Cover and Gallery images by Porsche Media

The restomod trend in automotive is nothing particularly new but has been gaining traction in the last few years as the core technologies change with digitalisation and electrification.

The term indicates cars, usually classic models, that are not only restored but also updated (internally) to bring their performance, usability and safety up to modern standards while leaving the aesthetics almost untouched.

To confirm the trend, several companies started their own project just over the last five years. The graph below shows over 40 of the most active companies in these years. While some started many years ago with different activities involving motorsport or ‘simple’ vehicle restoration, many others especially since 2015 were established directly with this purpose.

Restomod firms foundation year

But what characterises these firms that decide to manufacture these unique models? And how does this phenomenon relates to the current context of the automotive industry?

About Restomod Firms

The first characteristic that defines these manufacturers is their craftsmanship. Most of these companies are or at least have started from, small workshops with a few employees. Secondly, they all come from a strong passion for a specific field of automotive, or a brand, or sometimes even a single model, as is the case of Alfaholics or Eagle.

The general purpose, along with bringing these models back with improved performance, safety, and comfort, is to offer a unique customer experience.

Naturally, these vehicles are produced in extremely limited numbers, and there will hardly ever be two equal to each other. Personalisation is a strong factor for the majority of these specialists, which, in this time and age, is key in the luxury automotive industry as discussed before in different occasions. The search of a certain target group of customers for unique, and special products, in fact, is arguably one of the reasons for the recent success of restomod.

*Photos by Automobili Amos, Kaege Retro, Eagle, Emory Motorsports, and Icon 4x4

Pricing generally reflects the manual labour involved, the personalisation level, the development costs, the scarcity, and so on. This means that one of these restored cars’ price (sometimes regardless of the initial model’s value) can vary from $150,000 to well over $1.5 million.

Also, there are a few markets where this movement has gained more momentum, and they are generally the US first, followed by the UK and Germany. There are, however, other brilliant examples from other markets with long and deeply rooted automotive history such as Italy, or France.

Established Automakers

There have been a few examples of large automotive manufacturers that applied similar principles for special projects.

One is Porsche, with the one-off Classic’s Project Gold mentioned last week developed from the original chassis of a 911 993.

Another similar and probably more peculiar project is the Jaguar E-Type Zero. Announced in 2017 first as a concept and then as a proper conversion for E-Types, it was Jaguar’s conversion of the roadster E-Type into an electric car.

According to some media outlets, the project would have been halted or just temporarily paused, but could nonetheless see the light in the future.

If these models by early adopters become popular among enthusiasts and wealthy owners, other companies might decide to take the same path set by the likes of Jaguar and Porsche. So, we could see other established manufacturers in the future deciding to start a special bespoke program for this kind of conversion.

The EV conversion though is still a project that presents several risks. Like for the E-Type Zero, a lot of enthusiasts might not have been happy about seeing such an iconic car "stripped of its identity", and the same could happen for other vehicles with similar status.

While Jaguar had a few difficult years which seriously challenged its brand reputation, the same cannot be said for other companies in the same market segment. So, it seems highly unlikely to imagine OEMs like Ferrari, Porsche, or Aston Martin turning limited, classic cars they so carefully preserved throughout the years in electric vehicles. First, for the impact that this decision could have on the brand itself, but most of all for the loss of value and collectability of a classic car being heavily modified. This would limit also more “traditional” restomod projects for these automakers.

For instance, Aston Martin in its DB5 Continuation project rebuilt 25 units of the iconic grand tourer and did not renew or apply any modification or gadget to the original models.

Restomods in the Modern Automotive Market

History is cyclical, and design trends tend to reappear after a few generations in every industry.

Today, automotive is driven by technological development with EVs characteristics often defined by the "form follows function" principle. This translates into exterior and interior design that are affected by cumbersome battery packs, and the need for low drag coefficients. So, there is a significant change in the design language of some major automakers both for this reason and for the research of a more futuristic expression.

As it happens sometimes, however, with all this sudden change, comes also an opposite push, which in this case does not mean moving backwards, but forward following specific guidelines.

The electric revolution has sparked interest in the idea of applying modern tech to a recognisable design. To see how classic lines would translate in a modern language. Or simply to avoid a complete leap of faith into “the unknown” for both the company and its customers by remaining attached to something familiar. From this idea, two of the most attention-grabbing EV concept of the last few years were born. The Honda E (successively turned into a production vehicle), presented at the 2017 Frankfurt Motor Show, and the recent Renault 5 Prototype based on the famous R5.

In this context comes the restomod trend. And the ongoing revolution could very well be one of the main reasons for its sudden surge in popularity. The will to celebrate and preserve what has been done best so far.

This factor ties well into the strategy applied recently by luxury automakers such as Ferrari and Lamborghini. Through products like the Icona Series and the new Countach, they too pay a modern tribute to the highest achievements in their history.

Secondly, as mentioned before, scarcity and uniqueness are major drivers in the modern luxury industry, and these cars’ value proposition certainly satisfies both requirements.

Finally, social media and the internet, in general, provided an extremely powerful platform for all these small specialised workshops to promote their products worldwide. Such coverage has surely been key to reaching a target audience of enthusiasts willing to pay a significant premium for this kind of unique vehicle.

Last weekend at Ferrari’s Finali Mondiali held at Mugello Circuit in Tuscany, the company presented the highly anticipated new entry in the Icona Series started back in 2018 with the presentation of the Monza SP1 and SP2. This time made its first appearance on stage (and on track) the Daytona SP3.

Back in October 2018, Ferrari introduced the new Icona Series Concept as tapping into “a leitmotif of the most evocative cars in the company’s history to create a new segment of special limited series cars for clients and collectors. The intention is to use a modern aesthetic to reinterpret a timeless style, with technologically advanced components and the highest performance possible through continuous innovation”

*Daytona SP3 on track at Mugello with 330 P3/4 and 412P

In an Interview with Motor1, Ferrari Chief Design Officer Flavio Manzoni, with regards to this project, says:

“This wasn’t a simple retro-design project based on a single model. The thing we were most passionate about was the evocative concept of a Sports Prototype […] The Sports Prototypes were designed for the track, but at the same time they were extremely beautiful, proper sculptures, very sinuous and powerful.

We were inspired by this evocative power, but we projected these stylistic cues into the future”

But what else is there for the Daytona SP3? And what does this model mean in the context of the luxury performance automotive niche?

THE DAYTONA SP3

The name, like the car, takes inspiration from the events that happened at the Daytona 24 Hours of 1967 where Ferrari took the first 3 places with 330 P3/P4, 330 P4, and 412 P. These were also the cars that influenced the 1968 Ferrari 250 P5 Berlinetta Speciale shape (visible especially in the Daytona SP3 rear) later used for the Alfa Romeo 33 Speciale and inspired the commission of the 2006 one-off Ferrari P4/5. Both were designed by Pininfarina and confirmed the fascination for those historic models.

The car preserves the targa top of some of these models as well. The powertrain too celebrates that heritage. The Daytona SP3 features, in fact, the rear-mounted naturally-aspirated 6.5 litres V12 seen recently in the 812 Competizione, but tuned here to produce 840 cv (829 hp), 697 Nm of torque, and revs up to 9500 rpm. The chassis is derived from the LaFerrari, but no hybrid or electrical components have been added.

The driving position is also reminiscent of those racing cars, with seats completely integrated into the tub and the pedals board sliding to adjust to the perfect position. Several innovative aerodynamics solutions allowed the design to remain as clean and streamlined as possible while also being enriched by details such as mobile panels recalling classic supercars’ pop-up headlights.

*Daytona SP3 ‘Eyelid’

The final result anyway is as futuristic as possible. From the overall exterior sculpture to the interior featuring every bit of engineering and digital technology seen in the latest Ferrari models.

MODERN HERITAGE MODELS

To different extents and with different levels of success, the celebration of automotive heritage through special limited-edition models has become an important component of the brand strategy for several companies in the luxury performance market segment. Both because it enhances brand equity and it is the one characteristic that cannot be replicated in any way by any of the numerous new players entering the market helped by the electric technology that significantly lowered certain entry barriers.

The examples are a lot and in pretty much every competing company that can ‘afford’ such strategy.

MAIN LUXURY PERFORMANCE AUTOMOTIVE COMPANIES FOUNDING YEAR

*The Scuderia Ferrari was actually established in 1929 as the Alfa Romeo racing team and became independent in 1939, while the first road car produced to fund the racing team was built in 1947
**McLaren racing team was founded in 1963 by Bruce McLaren while the actual automotive company was effectively established only in 2010

There have been a few examples of this strategy in the past like the aforementioned 2006 P4/5, or sometimes just produced as a concept like the Lamborghini Miura Concept designed the same year by Walter De Silva.

In just the last five years though, there has been an increasing number of releases of such vehicles. Much like it is happening for the One-off trend, this is also about strengthening the brand and offering a rarer product and a more unique customer experience. In some cases, the two even coincided. Like for Aston Martin’s Victor, which is a one-off but also an explicit celebration of its 70s and 80s ‘British Musclecar’ phase with the Vantage.

NUMBER OF MODERN HERITAGE CARS RELEASED BY MANUFACTURER (2016-2021)

• The same year Aston Martin released also the V12 Speedster and the DB5 Goldfinger Continuation, produced in just 88 and 25 units respectively.

• In 2019, Bugattiafter the limited run of the Divo unveiled two new models. Modern cars directly tapping into the company’s long history. The one-off La Voiture Noire recalling the story of the lost Bugatti Atlantic, and the Bugatti Centodieci derived from the EB110 and built in only 10 units.

• Even the ‘Future Shapers’ at Lamborghini allowed themselves to look back at the legendary Countach with a limited run of 112 revised and updated versions of the 80s icon.

• Despite being one of the youngest companies in the segment, McLaren Automotive managed the same ‘nostalgia’ operation through the Elva. The third modern speedster, this time inspired by the concept of open-top racing cars M1A, M1B, and M1C developed by Bruce McLaren himself and outsourced to British Company Elva in the 60s. Production for this was originally set at 399, and successively lowered to 249 and ultimately to 149 units.

• For Porsche, there was the 2018 Classic’s Project Gold one-off 993. This was followed by the project called Heritage Design Strategy, which in 2019 and 2020, saw the 911 Speedster and the 911 Targa 4S Heritage Design Edition. Although not completely new models, the cars boast unique specifications and options available. These limited runs are set for much higher numbers with 1,948 Speedsters and 992 Targa 4S.

HUNGER FOR MODERN HERITAGE CARS

Heritage and branding are some of the most important factors in the modern luxury automotive company strategy as seen a few times before. For this reason, throughout the years, strategies have always been carefully crafted around them, but this is important today more than ever before.

The increasing number of these models directly inspired by the companies history suggests an ever stronger interest in rare and highly customisable vehicles, as well as the will to feel a sense of belonging to a brand. Additionally, they bring various advantages to the manufacturers.

First, they represent an important resource for the OEMs because they offer an opportunity to set themselves apart from any new competitor, and also a great resource to reinforce brand identity and develop new projects.

Ferrari itself has been applying a similar formula to its production models. The last two entries in the line-up, Roma and 296 GTB incorporate clear design cues from the companies history. The first takes inspiration from the 50s and 60s GTs, such as 250 GT, and GTB/4 (Daytona), while the second recalls models like the 250 LM but also some 80s cars especially in the rear.

*2021 Ferrari 296 GTB and 1963 250 LM

Second, margins also will naturally be much higher. Most of the time, these limited editions sell between €1 and €2 million. Some for a lot more, like in the case of Bugatti (around £10 million and much more for the one-off). A  few, like the two Heritage Edition Porsches for a lot less. But considering the average lower prices Porsche charges compared to its competitors, and the higher production numbers of the two models, they too sell at a significant premium between £25,000 and £30,000.

Going back to the Daytona SP3, by looking at the numbers in the last few years, it is evident how Ferrari’s stronger reputation and customer loyalty are making the difference when it comes to limited editions. Except for Porsche that sells in a different price bracket, all the other heritage models are produced in much smaller numbers.

Clients are approached way early in the process, and the cars are (most of the time) all sold out by the time of the unveiling. Manufacturers are able to plan these numbers to make sure the car sells out, and Ferrari in the “speedsters run” delivered 499 Monza, while Aston Martin limited the V12 Speedster to just 88 models and McLaren slashed the production number twice. This number was most likely even less than what it could have been because the car without a windshield is not homologated for road use in the US and Asia. The Daytona SP3, in fact, is set for a production of 599 units.

The fact that just these two models selling for over €2 million each total a production of almost 1,100 units is remarkable, and it is something that no other company in this market is managing to achieve. The Daytona SP3 represents another success in the celebration of one of the strongest brands in the world, and one that will fortify its position even more.

On Monday, a rumour started by Autocar circulated on the internet according to which Audi had bought McLaren Group after a bidding war with BMW. The news, however, has been denied soon after with an official statement by the British automaker:

“McLaren Group is aware of a news media report stating it has been sold to Audi. This is wholly inaccurate and McLaren is seeking to have the story removed. 

McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group.”

There are two interesting topics that can be explored from this statement though.

The first is that, while McLaren denies what was initially stated by some media outlets, it does not exclude potential ongoing negotiations or corporate restructuring.

The second is the confirmation of interest in Formula 1 by VW Group, more likely under the Audi, or Porsche brand that could lead to something more in the future.

ABOUT MCLAREN

McLaren comes out of an extremely difficult period in 2020, like many other automakers.

As reviewed in McLaren’s Q1 2020 and updated strategy article, the company set certain targets at the beginning of the year when risks caused by the pandemic were already known. One was to deliver 4,000 vehicles by the end of the year, which would have represented a 16% decrease compared to 2019. But at the end of 2020, the company delivered only 1,659 vehicles. Additionally, the company laid off 1,200 employees over the same period to offset the losses.

The Track25 strategy, defined in 2018, established a production volume of 6,000 cars by 2025. But 2019, which was an extremely positive year for the sector and for the majority of companies in this segment, was already not completely good for McLaren. Production in fact decreased by 2%, even though McLaren claimed that this was planned to focus more on margins improvement and preserve quality and exclusivity over volume growth. And financial results were indeed positive with revenue increasing by 18% y-o-y reaching £1,486 million with the automotive division contributing a stable 84% to it. Other metrics like Debt and Liquidity were not as positive though.

Fast forward to 2021, and most companies have shown impressive results (some even proper record achievements) with a fast recovery over a 2020 that, in the end, affected the majority way less than their high-production-volume counterparts.

MCLAREN SALES, REVENUES (£ MILLION), AND PROFIT/LOSS (H1 2017 - H1 2021)

McLaren too reported significantly better results in the first half of 2021, but still far from both the 2018 and 2019 ones in terms of deliveries and revenues, profit however is up, indicating that the restructuring started in 2020 to make the business more efficient has brought positive results.

There are two more important factors that could play into corporate developments or reorganization of the automotive and motorsport divisions in the near future. One is, of course, the departure of Mike Flewitt as CEO of McLaren Automotive. He entered the company in 2012 and COO and a year later took the role of CEO. McLaren has not yet announced who will be his successor, and as of now, McLaren Group Non-Executive director Michael Macht took his role, with sales, PR, and marketing department reporting to the Group’s Executive Chairman Paul Walsh.

MCLAREN’S FORMER CORPORATE STRUCTURE

The second is an indication of the changing necessities for the company to build a sustainable and more focused model. In August 2021, in fact, McLaren sold its Applied technology division to Greybull Capital, leaving only Racing and Automotive under the McLaren umbrella. So, as of now, the Group might be looking at other options to sell part of the other divisions or find new partnerships to realise this new model.

WHAT ABOUT VW GROUP?

This claim sparked the interest of the media and the speculations about the true interest of the Group’s motorsport division in entering the F1 championship.

Current McLaren F1 team principal Andreas Seidl too was quoted at the end of last year by Motorsport.com. He claimed that while he thinks it is highly unlikely to see any new manufacturer entering the championship in the near future, even just as an engine supplier (now that Honda is set to leave at the end of 2021), the new rule change of 2025 represents an actual opportunity for new entrants. Representatives of both Audi and Porsche were invited to take part in a meeting on the development of the next generation of power units with F1 engine manufacturers Ferrari, Mercedes, Red Bull, and Renault as well as Stefano Domenicali and Ross Brawn from F1 and Jean Todt from the FIA. Using a technology that will be also relevant in other contexts of automotive and transportation is key according to Seidl, not only for the manufacturers involved but also to attract new ones.

At different times, both Porsche former Vice President of Motorsport Fritz Enzinger, and CEO Oliver Blume confirmed that participation in these meetings does not necessarily translate into an entry in F1, but they offer a proper evaluation opportunity.

The current situation is allegedly what stopped Porsche and other companies in the past few years from entering F1. The initial investment required would be too big to enter without even getting a real chance of winning against established teams in the sport. So sustainability, cost reduction, and a simpler power unit will be crucial for Formula 1 going forward.

So, on the one hand, an interest in McLaren Automotive looks unlikely, considering VW’s existing portfolio of brands. On the other, even though what has been discussed so far seems to indicate that no VW Group brand will enter Formula 1 in the next four seasons, potential interest in a partnership with an established manufacturer or team such as McLaren could be relevant for the future. It would effectively give early access to significant know-how in every aspect of the sport, and probably more bargaining power when it will come to defining new regulations for the next generation of F1 cars.

On the 2nd of November, it was officially announced the operations’ commencement for the newly established joint venture Bugatti Rimac d.o.o. born from the partnership of Rimac Automobili with the German Group and especially with Porsche that now owns a 45% stake in the new company, and a 22% in Rimac Group.

The latter too is a new entity led by Mate Rimac under which the Joint Venture, and Rimac Automobili, as an independent company, will stay along with Rimac Technology, the division which will continue the production of battery systems, drivetrains, and other EV components that were key to Rimac’s success. To go more in-depth into the details and implications of this new entity you can check the previous article ‘Rimac signs historic Strategic Joint Venture with Porsche to form Bugatti-Rimac’.

*Mate Rimac during the joint venture announcement. Source:Rimac Media

Pininfarina just presented its latest automotive partnership offspring, the luxury saloon car developed for Taiwanese Hon Hai Precision Industry (鸿海集团), better known as Foxconn Technology Group.

Most of those who know this company will associate it with smartphones. The Asian giant has in fact been for years the largest tech manufacturer in the world, reaching up to 40% of the world’s supply of consumer electronics (Apple, Sony, Xiaomi, Nokia, Oppo, Vivo, Huawei, and more). But that is rapidly changing.*Foxtron Model E

According to China’s National Monitoring and Management Center for New Energy Vehicles (新能源汽车国家监测与管理中心) in 2019, 486 new energy vehicle companies successfully applied and were registered, and 5,827 models passed the vehicle compliance test. A big part of this is the ‘Made in China 2025’ plan devised to promote the development of ten strategic industries, among which is also the new energy mobility through subsidies and rebates.

Ithome quotes the Ministry of Industry and Information Technology’s minister Xiao Yaqing who is encouraging the local governments to leave to the market the role of defining the Chinese EV market. This should eventually lead (as it happened in other sectors) to mergers, reorganisation, and market consolidation.  

WHAT ABOUT THE FUTURE OF CHINA’S LUXURY AUTOMOTIVE SEGMENT?

A few months back in the article EV Market Growth 3 years later: China and the rest of the world a look at the 10 best-selling Chinese EV models highlighted how despite cheap cars dominating the market, Tesla topped it with Model 3. Tesla’s fastback is not just the only foreign EV in that list, but also quite above the average price of most of the models right below it. This shows that there is still an interest for foreign products in the top end of the market (considering also the reputation Tesla’s brand has in the early adopters’ community that other established brands don’t have).

2021 will be an interesting indication of how this market segment has evolved as several premium American and European companies have delivered electric vehicles for the entire year. For instance, Porsche that has a strong presence in Asia with China as its biggest national market recorded strong growth in 2021 since the first quarter even in the electric segment.

In several tech-intensive industries, Chinese companies have been able to gain leading positions in just a few years thanks to their strong innovative push and radically different approach from their competitors.

Cars however represent a much bigger investment and thus also one on which, as of now, consumers are more emotionally involved. So it is easier to imagine customers relying more on well-known brands at least in the short to medium term in foreign markets. On domestic soil, however, the strong creativity and brand diversification, such as the one shown by Human Horizons HiPhi X, help a few of these brands gain that reputation to become the ‘next Tesla’ with young generations.

One key factor for the success of these start-ups could be the change of car ownership standards. If car-sharing keeps becoming more popular (which should not be taken for granted), EV start-ups could more easily penetrate new markets through public fleets contracts. In turn, this would also help increase brand awareness. According to McKinsey, the global shared-mobility market value in 2019 stood between $130 and 140 billion (£94-101 billion). Its presence in Europe and America, however, is not as strong as it is in China.

*Source:McKinsey

In its latest report, Porsche confirmed the record results of the first half of 2021. Despite the ongoing chip shortage that is affecting the industry with production and logistics bottlenecks, Porsche minimised the delays by retrofitting vehicles’ missing parts.

Some in the factory, others once delivered to the dealers, some even post-sale. So, on October 15th press release Porsche confirmed 217,198 deliveries, up 13% on the previous year.

*Porsche US

Last year, the automotive market was hit extremely hard by the pandemic. However, the luxury segment as many predicted proved to be more resilient and several companies managed to limit significantly the losses.

The first half of 2021 instead has been positive for all of the players in the segment with several reporting record sales and revenues. Especially Aston Martin and McLaren which went into 2020 already in a difficult phase have so far recovered significantly. The two British companies, registered respectively +224% and +90.4% in sales, and +242% and +110.5% in revenue. Other competitors, while reporting less eye-catching growth rates, mainly because they were all coming from much more stable situations, still reported important results:

· Bentley – Deliveries Volume 7,199 +46.4%, Revenues €1,324 mn +53.9%

· Lamborghini – Deliveries Volume 4,852 +36.8, Revenues €961 mn +25.6%

· Ferrari – Deliveries Volume 5,456 +32.2%, Revenues €2,046 mn +36.12%

· Porsche – Deliveries Volume 153,656 +31.4%, Revenues €16,530 mn +33%

Granted that countries do not incur new lockdowns and factories are not forced to shut down again, the risk for the industry right now comes from another factor. The chip shortage is affecting every technology-intensive industry and automotive is no exception. The relatively lower amount of supply required by low-volume manufacturers could shield these companies from delays, depending, of course, on the provisions.

As of now though, while the industry seems on track to full recovery, it is interesting to have a look back for an overview to have a more precise picture of where the industry is going.

SUVS POPULARITY AND OTHER MODELS

For quite a few years now, SUVs have been by far the most popular vehicle category, with sales constantly growing in every segment, and in all major automotive markets, especially in the biggest one, China.

In the luxury segment too, automakers and even low-volume manufacturers have adapted (or are adapting) to this trend. It was naturally more difficult for some with a long history with specific vehicle classes and a scarce product line, but eventually, even the likes of Aston Martin, and (soon) Ferrari, jumped on the bandwagon. Early adopters like Porsche have been doing it successfully for many years now, to the point where they consistently sell at least twice as many SUVs as all the other models combined every year.

*Include data from Aston Martin, Bentley, Ferrari, Lamborghini, McLaren, and Rolls-RoyceOf the three companies less affected by the pandemic, Bentley, Lamborghini, and Ferrari, the first two surely managed these results thanks to the continued success of Bentayga and Urus. In the case of other companies with worse results, SUVs helped to limit the damage. At Aston Martin over 1,500 DBX accounted almost for 50% of the total sales of 2020, most of which were due to aggressive de-stocking. Rolls-Royce’s Cullinan too partially saved the automakers year, with over 2,000 units delivered and just a 12% decrease while the rest of the range recorded a -40%.