McLaren Profitability, Sales Accelerated in 2016

British supercar manufacturer McLaren Automotive races into record territory with its fourth straight year of increasing profitability and its best-ever year in vehicle sales.

Its before-tax profit tax of £9.2 million ($12 million) from 2016 sales revenue of £649.8 million ($844.6 million) was a 70% improvement on the 2015 pretax result.

Operating profit was a record £65.8 million ($85.8 million), standing at 10% of turnover and representing a 180% increase over 2015. Last year’s strong financial performance was driven by record sales, up 99% at 3,286 units, with all geographic regions achieving sales growth.

CEO Mike Flewitt says the positive financial performance in 2016 was underpinned by a 44% increase in sales revenues and is further proof McLaren’s growth plans are both achievable and sustainable.

“Investment in R&D and future product during the period of £129.1 million – 20% of turnover – reaffirms our commitment to the Track22 business plan that will produce 15 new models or derivatives by the end of 2022,” Flewitt says in a statement. “The focus going forward will be on successfully delivering these new products and managing continued profitable growth.”

In its first full year of production, the Sports Series family accounted for 2,031 deliveries, most from the recently introduced McLaren 570GT and 570S models.

The Super Series also continued its success story thanks largely to the McLaren 675LT Coupé and Spider models. Having both sold out in a matter of weeks, the limited-production, even more driver-focused and higher-performance derivatives of the Super Series started production in mid-2015 but continued through 2016.  In total, 1,255 Super Series cars were sold last year.

In March, the second-generation McLaren Super Series, the McLaren 720S, was launched and immediately attracted 1,500 orders.

A new convertible Sports Series model, the 570S Spider, was announced in June and made its world debut in the U.K. at the Goodwood Festival of Speed.

Chief Financial Officer Paul Buddin says the financial result was boosted by significant growth in revenues from the company’s bespoke division McLaren Special Operations (up 147%)and McLaren Automotive Aftersales operations (up 37%).

North America remained McLaren’s single largest market in 2016, with deliveries up 106% at 1,139 units. Deliveries in Europe rose 153% to 996 units, China saw 228 sales, the Asia Pacific region grew by 90% and the newly combined Middle East, Africa and Central and South America region grew 69%.

An expanding McLaren retail network saw dealerships opened in Bristol (U.K.), Boston and Palm Beach (U.S.), Gold Coast (Australia) and Fukuoka (Japan).

“While we will never again see another jump in sales volume of this magnitude, the reception to the new 720S and the new 570S Spider has been incredibly positive and initial orders for both are beyond our expectations,” says Jolyon Nash, executive director-global sales and marketing.

During 2016, McLaren spent £129.1 million ($167.8 million) in new projects across the Sports Series, Super Series and Ultimate Series.

The Track22 Business Plan sees McLaren investing a claimed industry-leading percentage of turnover of 20% in R&D activities over the plan’s time frame. This will move the automaker toward its objective of producing more than 4,500 vehicles annually by the end of 2022, with at least 50% of the cars featuring hybrid powertrain technology.

The business plan also includes development of a fully-electric powertrain for a concept car to evaluate its possible use in a future Ultimate Series. Early prototype stages of the development work commenced in 2016.

The McLaren Production Center, the only location for the hand-assembly of McLaren vehicles, saw a second shift introduced in January to meet demand for Sports Series models, leading to the creation of 250 jobs within the manufacturing, quality and logistics departments. This took capacity at the center from 10 cars a day to 20, supporting annual production of about 5,000 units.