63 replies to this topic

[oetzi]

McLaren are nowhere near the position Ferrari are in branding wise.

 

Outside of motoring/motorports enthusiasts (and their social victims long suffering friends) very few people have any clear idea that 'McLarens' even exist. Apart from Schteeeve, Malcolm and blue stripy baby buggies.

 

50 years after Ferrari was formed, virtually everyone in every country in the world knew what one was. And a lot of people wanted one.

[Talisman]

So, the arguments in the topic why Mclaren cannot become an engine manufacture are summarized as follows:

 

- It is too costly

- They do not have the expertise

 

Argument 1, costs.
I think it can be divided into two aspects:

1.1: costs to setup the facility, purchase the engineering equipment, hire the staff, build a factory etc etc. This expense is immense indeed.

1.2: costs for continuous R&D. Still a huge amount of money. I believe I read somewhere that Mercedes spent some 500 million euro's into R&D as of 2011-2014 to develop their engine. That amount will drop significantly of course, and a large sum should be covered by the customer teams who basically are paying now for this R&D.

 

The conclusion then is that money is the obstacle. Although the budget's are tight now without a title sponsor for Mclaren, I do believe they have enough liquidity to fund big investments (just an assumption). With external investors, loans, etc etc, it should be possible to make such an investment. The question then is;
- What benefit does it bring from a competition point of view? Will their own F1 engine be competitive? And when? Would it take 4 years to develop? 
- Can the incurred costs be compensated by benefits to their road-car section development, or perhaps even customer teams with a 'mclaren engine'? 

 

If their engine proves to be good, I'm sure they can tie a know with a smaller team, also increasing their influence in F1, bigger bargoning power, perhaps some influence on one driver this team should hire (Vandoorne etc). It would also provide them with a strong source of income. I'm not sure how relevant the F1 R&D would be for their road car engines... 

 

All in all it seems quite complicated, but on first sight, it seems to be a route Mclaren should want to explore to assess the idea. 

 

Sure.

 

It cost Mercedes several hundred million to develop their hybrid, thats pure R/D costs on top of what it cost them to buy Ilmor and kit them out properly.  They still spend hundreds of millions on R/D to keep it competitive and will carry on doing so in the future.  Between 2011 and 2013 that cost was in addition to the cost of developing 'reliability' upgrades to the V8 and further money earlier to develop a KERS system which was ditched after a couple of seasons.  We're talking billions here over a period of a few years.

 

In a few years we'll probably ditch the V6T hybrid so there's another few hundreds of millions that need to be found from somewhere.  This being F1 we have no idea when these massive regulation changes will happen, but McLaren would have to swallow the costs.

 

McLaren would be competing against companies that can increase spending quickly and massively on PU R/D because in the grand scheme of things putting another billion into a project isn't that big a deal for Daimler Benz, Honda, Renault or FIAT.  It would be for a small company like McLaren.

 

Assuming that McLaren supply five teams with PUs, thats 100-150 million in income per year minus the cost of manufacturing, supplying and supporting the PUs which would again require further investment into the manufacturing base at Woking.  It would be nowhere near enough to put a dent into covering the costs.

 

Honda supply the engine for free plus all the support required for it.  Despite denying it I believe they are pumping quite a bit of money either into the team or into the drivers' salaries.  If engine regulations change Honda swallows the costs.  If the Honda is non-competitive in the long term McLaren are free to change supplier for little additional cost to Woking.  Honda and McLaren are I believe working together on roadcar powerplants and the deal gives McLaren access to some Honda roadcar technology.  This is going to save them a substantial amount of R/D costs.  I'm really struggling to see the financial incentive for McLaren to develop their own PU vs having a works deal.

[Talisman]

McLaren are nowhere near the position Ferrari are in branding wise.

 

Outside of motoring/motorports enthusiasts (and their social victims long suffering friends) very few people have any clear idea that 'McLarens' even exist. Apart from Schteeeve, Malcolm and blue stripy baby buggies.

 

50 years after Ferrari was formed, virtually everyone in every country in the world knew what one was. And a lot of people wanted one.

 

I agree that they are nowhere near Ferrari branding wise though part of that brand strength comes from having great roadcars to aspire to.  McLaren is addressing that shortfall with its roadcars.  However surely a better comparison would be any of the myriad of British small scale sportscar makers that come and go that have no brand presence whatsoever?

[FerrariV12]

Another thought re. the McLaren/Ferrari comparisons. Yes both happen to build high end sportscars in the present, but from day one Ferrari were very much about engines - what's that old quote from Enzo about building engines and attaching wheels to them? That 60+ years of history of Ferrari cars powered by Ferrari engines means that they'd never have the option, brand-wise, of sticking a customer Merc, or a Honda or Renault, in one of their F1 cars.

 

But I'd say more than Ferrari, the modern McLaren has more in common with Lotus (Cars and Team back in the day, not Enstone), a relatively low volume sportscar manufacturer with an F1 team under the same umbrella. Lotus never built their own F1 engines.

[oetzi]

I agree that they are nowhere near Ferrari branding wise though part of that brand strength comes from having great roadcars to aspire to.  McLaren is addressing that shortfall with its roadcars.  However surely a better comparison would be any of the myriad of British small scale sportscar makers that come and go that have no brand presence whatsoever?

Those companies aren't McLaren's self-referenced competition though, are they? Ferrari are. And Ferrari started as a small scale racing team that evolved a small scale sportscar division that quickly established its products as some of the world's most desired items. McLaren and its products just seem unable to generate the emotional engagement to create a similar cachet.

[Talisman]

Those companies aren't McLaren's self-referenced competition though, are they? Ferrari are. And Ferrari started as a small scale racing team that evolved a small scale sportscar division that quickly established its products as some of the world's most desired items. McLaren and its products just seem unable to generate the emotional engagement to create a similar cachet.

True, but that will come if McLaren persists. BMW and Audi built up strong brand reputations between the 70s and 90s to rival Mercedes from a low baseline.

[oetzi]

True, but that will come if McLaren persists. BMW and Audi built up strong brand reputations between the 70s and 90s to rival Mercedes from a low baseline.

I admire your optimism! There have been far more failures than successes in the fields of exotic cars and brand building.

[wj_gibson]

Why do McLaren get the Honda engine for free and Red Bull get Renault free? (Probably one for the Stupid Question Thread)

 

Did they get free Mercedes engines when they ran them?

 

McLaren did get the Merc for free from 1995 to 2009 as McLaren was essentially the works team.

[Talisman]

I admire your optimism! There have been far more failures than successes in the fields of exotic cars and brand building.

Being an eternal optimist is a prerequisite for supporting Honda!

I agree about the failures but McLaren have better assets, financial, branding and technological than most.

[Scotracer]

Powertrains are the most difficult & costly area of the car to develop. 

 

Even their 12C/P1 engines are made by Riccardo. 

[Fatgadget]

McLaren did get the Merc for free from 1995 to 2009 as McLaren was essentially the works team.

Was it really for free?Or was that a marketing exercise on the part of Mercedes...Just like say a sponsor who gives you cash instead of  products and or their expertise in return for exposure?

We cant really say JPS nor Malborough nor any other baccy sponsor  gave away their cash for free can we now? 

[CPR]

Given that McLaren signed a 10 year deal with Honda for F1 engines, I don't think there's much chance of them doing their own F1 engines any time soon. For road car engines, I guess it would depend on whether a good entry point opens - they decided to jump into mass manufactured (relatively) cars when it became possible to mass produce a CF car, which gives them a unique selling point over primary competitors.

[Dunc]

I remember there was a silly season rumour after Merc dropped McLaren that the company was going to buy Cosworth and build engines through them.  While I don't think this is an altogether dreadful idea, it is pretty far fetched to think it would happen and it is the only way I can ever see McLaren building their own engines.

[chrcol]

you cant just start building something you dont know how to build, basically if mclaren wanted to build engines they would have to buy a company who can build them such as cosworth.