Lamborghini has been selling cars to consumers since the 1960s. Ferrari has been doing it since the '40s. They're pretty well entrenched at the very highest end of the luxury sports car market. So how does a newcomer break in? You go to the one place on earth with no sympathy for established players. That's what McLaren Automotive is doing in Silicon Valley.
The British manufacturer has been making Formula 1 racecars for more than half a century, but it only began selling road vehicles five years ago. So while McLaren is widely known among car enthusiasts, the company is still trying to get out the message that its vehicles are something you can buy, not just admire from afar.
This is quite the challenge, especially when it comes to luxury products of any kind. When consumers splurge ridiculous amounts on high-end goods, part of what they're paying for is your brand's history, tradition, and pedigree.
But not in Silicon Valley. Here the millionaires and billionaires have made their fortunes building new companies right out of their dorm rooms and garages, starting from scratch, innovating new technologies, and in some cases, creating entirely new markets. The Bay Area's high-end consumers love what's new, and they identify with anyone who is trying to disrupt incumbents by building something better.
"The lifestyle and the mentality of the consumer there is very much in line with our brand and our values, so it's really a key market for us," said John Paolo Canton, spokesman for the Americas region of McLaren Group. "For some of our competitors, South Florida is the most critical market for them, and for us, it speaks more toward our brand that we're in line with the tech community in the Bay Area."
The Silicon Valley region is home to one of the company's top three dealerships in the U.S. thus far in 2016--a bit of a surprise considering other markets have larger populations or are more typically known as hot spots for sports cars (i.e., Los Angeles, New York, and Miami). Its dealership here, in Palo Alto, has the single largest waitlist out of any McLaren dealership in America for the 570S, the group's newest model.
"You've got a lot of sub-50, sub-40-year-olds who are doing quite well for themselves out of the technology industry and specifically in Silicon Valley, and those people are not going to have as much history buying only Ferraris or only Porsches," said Karl Brauer, senior analyst at Kelley Blue Book. "That's why they've wisely targeted the tech crowd, and it has largely been proven successful."
The tech-made millionaires of the region are also drawn to the technology behind McLaren's vehicles, Brauer said. As a new entrant to the market, McLaren has had to ensure that its vehicle stands out with innovative technology, such as the McLaren P1 powertrain, active aerodynamics, and a 100 percent carbon fiber chassis, which is lighter and strong than the steel chassis many vehicles used before McLaren changed the status quo.
"They're seen as the newer, cutting-edge technological company. There is a lot of tech that McLaren is leveraging for its cars, and that appeals to tech people too," Brauer said. "It's the same thing that makes a Tesla appealing to a technologically oriented person."
Establishing a relationship with Silicon Valley wasn't too difficult for the Woking, England-based automotive company. Besides racecars and luxury cars, McLaren Group has a third division: McLaren Applied Technologies, a tech consulting firm. This portion of the British group has been around since the '90s working with tech companies in a variety of sectors, ranging from transportation to health care and energy.
"There's this organic tech following where we're not just a car company, we're more than that, and a lot of our people who follow us as a tech company are also enthusiasts of cars and clients of ours," Canton said.
To grow this relationship, McLaren has enlisted the help of various marketing strategies, which include pitching the tech press and Hollywood product placements. If you're a fan of Silicon Valley on HBO--a show about the tech industry for those in the tech industry--you might recall the $320,000 McLaren 650S being the punch line for a number of jokes on season 2.
"These are not the doors of a billionaire!" laments one of the show's characters after having to sell his McLaren and give up the vehicle's upward-opening dihedral doors, reverting back to standard swing doors.
"We've been working on a lot of things, like product placement opportunities such as Silicon Valley, to get us out there in the mainstream, and that was just such a great fit for the brand for all the tech reasons," Canton said. "And also, it was done in good fun, right? The 'billionaire doors' have definitely become a thing around both the office and just in general."
McLaren has a long way to go before it catches up to its long-established rivals, but by heading to Silicon Valley, the land of startups and upstarts, the British automotive company is on the right track for disruption.