McLaren's U.S. dealers seeing high profitability, freshened facilities

LAS VEGAS — McLaren Automotive's retail operations in the U.S. are relatively young, with the first vehicle sales here starting in 2011. With only 25 stores, McLaren's dealership footprint is the smallest amongst major exotic and ultraluxury brands.

Now, as it enters a new vehicle cycle with the launch of the Artura plug-in hybrid, McLaren's U.S. retailers are reaching new levels of profitability while also investing in new or freshened dealerships, according to Nicolas Brown, president of the company's Americas region.

2022 will go down as the most profitable year for McLaren dealers in North America, Brown said at a media event here in December. The rise has been driven by a shift in more customers ordering bespoke vehicles and growing margins on pre-owned vehicles.

"It's been pretty consistent, going back to, let's say, 2018," Brown said, speaking with Automotive News for the first time in his current role. "Especially when you saw 570 and 720 come in, and where you had a balance in terms of the model portfolio. But dealers are at least twice as profitable, if not three times as profitable, as those years."

Brown believes this heightened profitability will continue at least through 2023.

"This shift towards customer-ordered vehicles, with a keen focus on ensuring a balance between supply and demand, will continue, especially in the ultraluxury segment," he said.

McLaren's U.S. dealership count is smaller than the likes of Aston Martin, Ferrari, Lamborghini, Bentley and Rolls-Royce, according to the Automotive News annual dealership census.

That's by design, Brown said.

"We've been strategically very careful in terms of expansion. What we do not want is over-dealerization," he added.

"We're in a unique position where if you look at the competitive set, there are over 40 and sometimes even over 50 dealers within North America. At 28 for us, including the three in Canada, we are quite lean. But that also supports dealer profitability," he said.

Many of McLaren's initial 10 to 15 U.S. dealers are reinvesting in facilities, spending various amounts, Brown said. For those looking to relocate and construct a new facility, it can be upward of $10 million to $15 million, he estimated.

"If a dealer is refreshing and bringing in new CI [corporate identity] into an existing space, you could be looking at $500,000 to $800,000," he said. "On the very low end, I would say somewhere between $350,000 and $450,000 — depending on the size and depending on where exactly that showroom is."

Brown said McLaren's latest facility upgrade program for dealerships is "very crisp, very modern and very progressive."

Commissioning areas, where customers can go through options to spec out a vehicle, have become a focal point. Some stores have a "Woking Window," Brown said, which is a video feed of the McLaren Production Center in Woking, England, where each vehicle is assembled.

Robert DiStanislao, president of RDS Automotive of Newtown Square, Pa., is one of those early dealers reinvesting in the brand. DiStanislao said he was one of the brand's original U.S. dealers with McLaren Philadelphia in West Chester, Pa.

In 2017, DiStanislao's group acquired McLaren Newport Beach, a "very small boutique" on the Pacific Coast Highway in California, he said. In 2021, RDS Automotive moved the dealership to a temporary spot before its new, larger showroom in nearby Irvine, Calif., became operational in December.

"McLaren has done a remarkable job in a little more than 10 years to be a brand that is discussed in the same sentence as Ferrari and Lamborghini," DiStanislao said.

Pietro Frigerio, dealer principal of the group's McLaren Newport Beach store, said the dealership's previous building was around 3,000 square feet, but it was just a showroom, as service was completed elsewhere.

Frigerio said the new $20 million campus sits on 3.5 acres and has showrooms for McLaren, Lamborghini, Bugatti, Koenigsegg and Automobili Pininfarina brands.

The property gives the group a centralized location for the brands, instead of multiple locations throughout Orange County, where it was previously.

Among other amenities, the new location has on-site service with 31 bays, half of which are dedicated to McLaren, Frigerio said.

The McLaren showroom, housed on the first floor of a new two-story building, is around 4,500 square feet, he said. The McLaren investment alone cost more than $3 million, he added.

The showroom is one of the first to adopt McLaren's new facility upgrade program. It features a small coffee bar where customers can hang out, Frigerio said.

"That's what we see that works best with our clientele," he added.