Koenigsegg ‘Afraid’ to End Up Struggling Like McLaren if It Builds Cheaper Cars
Christian von Koenigsegg looks at McLaren’s financial woes as an example of what not to do.
Koenigsegg builds some of the most technically interesting and impressive cars in the world. They're extremely rare, fast, cool, and often cost millions of dollars. The automaker's founder and chief executive, Christian von Koenigsegg, knows that's not ideal from an average enthusiast's perspective, and claims he wants to make more affordable cars. In conversation with him at The Quail during Monterey Car Week, Koenigsegg pointed to McLaren as proof that this is no simple task.
"We have to take it step by step," Koenigsegg told me when I asked about more accessible machines. The brand is expanding its factory and shortening production cycles, but to really step into mass production is a huge risk. It's something that can't be done all at once and he's clearly thought about it before in the context of the supercar industry.
"I'm a little afraid if you look at, like, McLaren. They went quite quickly up in volume and they lost a ton of money and almost went bankrupt, new ownership," said Koenigsegg.
He's referring to the British company's financial trouble amid the pandemic. For a period, McLaren was constantly making headlines and unveiling new models to boost volumes. When COVID-19 caused a downturn, the company went as far as mortgaging its own headquarters to stay afloat. That's something Koenigsegg is keen to avoid.
He also claims to be very happy with the sort of business he does now. The amount of people who can buy a Koenigsegg is small, but it's a solid customer base. Koenigsegg noted that those interested in his cars would likely "buy all of those cars as well," referring to other multimillion-dollar hypercars. At such low volumes, high prices, and high demand, the level of risky business going on is almost minimal.
Large production volumes require more substantial investments in tooling and manufacturing capacity. It's especially dangerous for a small company. If Koenigsegg was going to make a cheaper car, it would be a big financial gamble, especially if it wasn't well received.
"It's a bit scary when you get a snowball rolling. If you don't nail it, you're jeopardizing everything," he said.
If Koenigsegg's cheaper car failed, it could be the end of the whole company. In short, there's no strong business case for going downmarket. That being said, Koenigsegg himself is, after all, an enthusiast. In our conversation, he expressed admiration for the incredible value of the C8 Corvette, one of the few affordable mid-engine performance cars. He gets the appeal, and he's working on it.
"We're gonna go more step by step, but for sure it would be great if more people could enjoy what we're doing," Koenigsegg added. "[We will] trickle down this crazy stuff into a more accessible realm."
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