08/13 1:27P (RT) FEATURE-Lamborghini shifting gears -- to profits
Story 5589 (VOWG.DE, I/AUT, I/WEU, I/EU, I/DE, I/US, I/IT, I/LIF...)
By Adam Tanner
SAN FRANCISCO, Aug 13 (Reuters) - For 40 years, Italy's
Lamborghini has thrilled elite buyers with its sleek and speedy
sports cars. Now, after losing money for most of its history,
the company is on track to earn a profit, the company's CEO
says.
"It has lost money of several investors," managing director
Giuseppe Greco said in an interview that ended with an informal
road test through the streets of San Francisco in a bright
orange Lamborghini Gallardo. "Lamborghini himself lost money."
It seems odd that a company specializing in top-of-the-line
$250,000 cars has been losing money for so long, yet the high
cost of development and the quantities produced -- only a few
hundred a year -- made profitability an elusive goal.
Now Lamborghini is shifting gears.
"Let me tell you a story of a company that did not want to
die," Greco said as he joined about 40 other Lamborghini cars
in a noisy, sometimes bumpy drive through the city to celebrate
the firm's latest model, the Gallardo.
Automobili Lamborghini has changed hands several times
since Ferruccio Lamborghini started building high-performance
sports cars in 1963. It went bankrupt in 1980, lost money for
Chrysler and then the family of Indonesian President Suharto.
In 1998, Volkswagen AG's <VOWG.DE> Audi division bought
Lamborghini, and Greco now forecasts an end to losses following
introduction of the Gallardo -- a bargain, relatively speaking,
at $165,900.
"We already broke even last year. This year, also, we will
break even. Next year, we start making money," he said.
Greco is hoping, with a third of its business now in the
United States, to quadruple car output from 430 in 2002 to
1,700 to 1,800 by next year -- a company record.

THE EXCLUSIVITY FACTOR
The company expects a 2003 turnover of 170 million euros
($192 million) but is still cautious about ramping up output
too much, lest the cars lose their cachet.
"One value they have to have is exclusivity," Greco said.
"When one of these guys goes out and has his car valet parked,
he does not want to be parked next to another car like his.
He's got to be unique."
Key to the company's success are customers such as sound
engineer Brice Carrington, 35, a San Francisco area resident
who has worked on Hollywood films such as "Spiderman."
"My father died in December and he died wanting to do a lot
of things," Carrington explained the logic of owning a $320,000
top-of-the-line Lamborghini. "You're only here for a very short
time, so you might as well have all the experiences you can."
Among celebrity owners are Academy Award-winning actor
Nicolas Cage and nighttime talk show host Jay Leno, who has
several older models in his vast car collection, according to
Greco.
Greco said having Audi as an owner gives Lamborghini more
stability than in the past, but added that some cultural
differences do exist between the Italian firm and German
bosses.
"We are more synthetic, they are more analytical," he said.
"Without going through the analytical part, you are almost
always right, but sometimes you are wrong. That is where you
sometimes have tensions."
As Greco drove the gleaming Lamborghini across the Golden
Gate Bridge, there was a lull in the conversation. The natural
beauty of the Pacific Ocean on one side and the San Francisco
Bay on a sunny day overpowered even his distinctive orange
Gallardo.
"Absolutely stunning," Greco said before a quick boost of
acceleration carried us away from the City by the Bay.
((Reuters Messaging: adam.tanner.reuters.com@reuters.net;
editing by Gunna Dickson; e-mail adam.tanner@reuters.com,
415-677-2541, fax 415-986-5147))

REUTERS
Rtr 13:27 08-13-03
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