Spyker's Spectacular Supercars

By focusing on exclusivity instead of being the fastest or most expensive, Dutch supercar manufacturer Spyker posts record sales

by Matt Vella

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Where there are supercars, there is testosterone. The constant, thumping back beat of the market for the world's most extravagant cars is edgy, macho, and aggressively competitive. Who will be the fastest? Which will cost the most? On any given track day, who will shatter records?

That dynamic has produced some astonishing cars. Bugatti's new Veyron has a monstrous 1,001-horsepower engine that pushes it to 62 mph in 2.5 seconds and tops out at more than 250 mph, all at a sticker price of well over $1 million (see BusinessWeek.com, 6/6/06, "Bugatti's New Level of Vroom"). Less costly fare from nameplates like Saleen and Koenigsegg go nearly as fast for anywhere from $500,000 to more than $700,000.

Fast and Expensive

But even with prices that high, the superlative doesn't always lead to outsized profits. Industry rumors suggest that Volkswagen Group, which owns Bugatti, loses enormous amounts of money on each Veyron sold. And supercar history is littered with botched ventures and never-realized vaporware, such as the ill-fated DeLorean, as well as sadly forgotten marques such as Delahaye and Delage.

Now, one small Dutch supercar manufacturer, Spyker, is posting record profits and sales by racing down another route. Its cars are no doubt fast and expensive enough to be considered supercars—from zero to 60 in around four seconds for prices ranging between $270,000 and $350,000. But the company's executive team runs its operations more like a high-luxé fashion house than a marketing-challenged engineers' shop.

"Nobody on this globe needs a Spyker, nobody," says Victor Muller. Spyker's 47-year-old CEO and co-founder admits that freely. "Nobody needs a Louis Vuitton bag or a Dolce & Gabbana evening gown. But we're all buying them because we can. It's the same with a supercar like Spyker. Nobody needs one, but everybody wants one."

Look Ma, No Wings

Before founding Spyker, Muller ran and ultimately took public Netherlands-based McGregor Fashion Group. That experience has left its mark on the management of Spyker, which has a staff of about 130 working in headquarters about 30 minutes east of Amsterdam.

Muller says the company is marketing and positioning its cars as it would haute couture. Creating an aura of exclusivity and extravagance is as crucial, Muller maintains, to generating profits in the supercar market as is gunning after fleeting performance records.

Instead, the company's sales pitches focus on Spyker's aviation heritage. In 1999, Muller and his partners acquired and relaunched the previously dormant Spyker brand, which had in the early part of the 20th century been a manufacturer of both cars and aircraft.

He says this association with flight is a big draw for customers. "It's really what sets Spyker apart. We build the cars like aircraft with no wings. If you buy a Spyker, you buy an aircraft with no wings—aluminum, riveted body, attention to detail."

Turning a Profit

Spyker also gets a boost from co-branding with luxury goods manufacturers like Louis Vuitton. The company makes sure its cars show up at prestige VIP events like the Top Marques supercar show and the Historic Grand Prix, both in Monaco, as well as cameo roles in Hollywood films such as 2006's Basic Instinct 2.

The strategy is proving fruitful. Spyker's half-year revenues have tripled since last year, to $16.35 million in the first six months of 2006, from $5.11 million during the same period in 2005. More important, this June the company turned a profit for the first time since its founding, churning out positive cash flow of about $1.66 million.

That growth is largely attributable to a surge in cars ordered and delivered. In the first six months of 2006, 43 Spykers shipped to eager customers, up from just eight during the same period in 2005. Better yet, the company's order book has ballooned to more than 300 cars from half that number last year. It expects to deliver at least 100 cars by the end of the year.