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Project: Lamborghini

Meet Ferruccio Lamborghini, the founder and creator of the car brand Lamborghini, a name etched in the very definition of supercars. The legacy of Lamborghini is a marvellous one and the story of how it began is truly fascinating. Oh how the heir of a grape farm revolutionised the automobile business forever!

Ferruccio Lamborghini was born on 28th April, 1916 to viticulturists Antonio and Evelina Lamborghini in the Italian province of Ferrara, northern Italy. As a young man, he was set to join the family business of winemaking and he had his path set for him, but from a young age, he was drawn towards farming machinery. So, Ferruccio attended the Fratelli Taddia Technical Institute where he studied automobile engineering and his passion was now firmly set in the study and making of cars and tractors in particular.

Ferrucio Lamborghini

In the year 1940, a few months after the beginning of World War II, the landscape of modern Italy was set to change course with the fascist party at the peak of its power and its influence over the youth of Italy. The economic state of Italy was not good, to say the least, and the party was particularly good at covering up the fact that the state was headed towards economic turmoil due to immense debt piling up and lack of employment in the country.

As a young man in Italy, Ferruccio was drafted into the Royal Italian Air Force where he served as a mechanic at the Italian garrison. He, along with 30,000 others were captured as prisoners of war, but his passion for automobiles did not stop. He opened a small vehicle shop in Germany where he would fix tanks, tractors, and German automobiles used during the war.

After a long struggle, he finally returned home to Italy where he found out that his wife had died during childbirth but had left him with a son, Tonino Lamborghini. It was in 1947 when the entrepreneur in Ferruccio finally emerged.

The post-war Italian economy opened up tremendous opportunities for entrepreneurs as the need for employment and the spirit of innovation was high. Using parts from military vehicle engines and differentials from other companies, Lamborghini built its very first “Carioca” tractor which used the proprietary six-cylinder petroleum engine of Morris trucks. What made these tractors so special was that, thanks to Lamborghini’s automobile genius, he built and modified the engine in such a way that it allowed the tractors to start with petrol and then switch to diesel, which was cheaper.

This strategy of capitalising on prohibitively priced petroleum, after the war, and filling the gap of cheap diesel-based tractors in the market of farming machinery, speaks a remarkable amount about his business sense. With the initial success of the “Carioca” tractor, Lamborghini found the company “Lamborghini Trattori” and began manufacturing tractors in Italy. Lamborghini’s tractors took Italy by storm and soon production was up to over 200 tractors per week. War surplus was soon running out and so Italian-made engines took the place of Morris Garages’ power plants in Italy. Lamborghini was now a well-established businessman whose wealth was increasing steadily and he was able to secure a future for his family and son.

As Ferruccio achieved great financial success with his tractor business, he made his dream of owning luxury automobiles a reality and began collecting luxury cars, particularly sports cars. In the year 1958, he bought the Ferrari 250 GT, a beautiful car with a classic design. Still, unfortunately to Lamborghini’s dismay, the Ferrari had a faulty clutch forcing him to take it into the shop on several occasions.

In his view, it is way too small for the supercars of the Maranello-based company, and he suggests Ferrari should seek a solution. Ferrari, however, immediately incensed, retorts, “The clutch is not the problem. The problem is you don’t know how to drive a Ferrari and you break the clutch.” Ferruccio’s reply is equally spontaneous and off the cuff, and also sounds like a challenge. “Dear engineer, I'll never buy your cars again. From now on I’ll make my own cars, then I can be sure they work the way I want them to.”

No sooner was it said than done. One year later Ferruccio founded the Lamborghini company in Sant'Agata Bolognese. The goal, never concealed, will be to build “the perfect car”, and this is where history was written and the Lamborghini we know was born.

The company’s goal was to make high-performance tourers that combined performance with luxury. The first car, the Lamborghini 350GT was introduced in 1964 and featured a roaring V12 engine designed by Giotto Bizzarrini. The success of the GT 350 was followed by the Miura which is often and rightly considered the first supercar, and later the Countach was unveiled to the world in 1974 which took the world by storm. An Italian manufacturer who only had two goals- pure Italian luxury and speed, speed and some more speed, Lamborghini faced financial challenges over the years, leading to changes in ownership. The brand went through various hands, including being owned by Chrysler in the late 1980s and early 1990s. Eventually, Audi AG, a subsidiary of the Volkswagen Group, acquired Lamborghini in 1998.

Under Audi's ownership, Lamborghini experienced a renaissance with the introduction of successful models like the Gallardo, Aventador, Huracán, and the Urus SUV. The Lamborghini Countach celebrated its 50th anniversary in 2021. Its daring and disruptive design has influenced supercar designs and one may not have seen this model in dealerships because only 1999 units were produced in the lifetime of the model.

Thanks to Ferrucio’s business genius, acumen, and sheer passion for automobiles and budding cars and engines, we got to see and experience cars that brought awe to people's faces.

But hey, let’s get a move on from the biography, shall we ? Let’s talk business strategies. “Less is more”- Lamborghini as a brand exudes an air of exclusivity with their pricing strategy, with the cheapest one you can buy, coming in at around, Rs. 3.22 Cr for the Lamborghini Huracan Evo. It automatically enhances the luxury of owning a Lamborghini and has rightly become an emblem of statusytyh wars. By limiting the number of cars available and focusing on high end features, they’ve been able to position themselves as a top tier brand.

Lamborghini has taken advantage of the power of influencer marketing to increase their brand visibility and boost sales and attraction. By showcasing the luxury of the brand through influencer activity, Lamborghini has become quite a phenomenon among high-income groups and a yearning aspiration for the rest. From high-speed car chases in action films and tacky portrayals in music videos to strategic partnerships with businessmen, the brand has been able to form a deeper connection with its target audience.

The brand also organises special events by deploying brand ambassadors, people who are already fans of the cars, to showcase the Lamborghini lifestyle. These brand ambassadors engage directly with potential buyers, provide them with direct feedback on what the brand has to offer and build excitement for its products. The company has also implemented a successful affinity program that provides members with exclusive experiences and products and invites to Lamborghini track days, which pose as a high-end social get-together, much to the pleasure of the brand’s target audience.

Lamborghini’s logo also shadows behind a compelling vision, symbolising Ferruccio’s zodiac sign Taurus and also depicts his love for bullfights. The bull has powerful connotations such as power, speed, dominance and danger, which he thought were apt qualities of the cars produced by the company. Being a luxury brand also offers several opportunities for innovation such as diversifying the image of the brand to just more than a single commodity. A good example is the watches made by Bugatti which has proved to be an extremely successful venture, simply because people are willing to pay any amount for exclusivity or ultra-luxury.

The manufacturing and assembling process of these cars is constantly undergoing innovation to keep up with the strict emission laws being set into place, while not compromising on the thrill factor. Collaborations established with partners from the aeronautical industry have resulted in the Sesto Elemento, a limited edition supercar with cutting-edge technology that brings together the best of both worlds. The name translates to ‘Sixth Element’ in Italian, a hint at carbon in the periodic table and a brief referral to the carbon fibre-reinforced polymer (CFRP) used in the chassis, body and components making it exceptionally lightweight. The Sesto Elemento boasts a supreme aerodynamic design and an extraordinary power-to-weight ratio.

The Lamborghini Sesto Elemento

With exclusivity comes the limitation of a small market share when you compare it to mass-market automobile manufacturers like Volkswagen or Toyota, the world’s largest car manufacturer with record sales of 11.2 million vehicles in 2023.Within the sports car segment, Porsche, which shares the same parent company as Lamborghini, sold over 320,000 cars in 2023, while the latter sold just 10,112 units in the same period out of which a meagre 103 were in India. Meagre because the country’s population density is in itself over 400 per km2 and brands like Hyundai crossed the 6 lakh milestone in domestic sales in 2023.

Citing the dire ecological consequences, emission laws are getting stricter by the day and high-performing automobiles that consume a lot of fuel and require high-maintenance engines are right in their target. Lamborghini is particularly late amongst the pack of mobilisers for the one-percenters to join the EV fad. Ferrari and Porsche have all-electric and even hybrid cars on sale, while Lamborghini has none at the moment. They have however announced that the first all-electric car, the Lamborghini Lanzador is set to go into production, but only by 2028, a drag which may not be solved with their designs, especially since the luxury car space is already extremely volatile to economic conditions.

Lamborghini's upcoming EV - The Lanzador

So, just some basic economics; in inflationary situations, the central bank of any country usually tends to increase the bank rate, reducing borrowings by commercial banks. This inturn leaves fewer resources with banks to extend credit and as a result, money supply in the economy contracts. As money supply contracts, people face a decline in the currency’s purchasing power and become weary of where their money is being spent and the purchase of non-essential or luxury commodities decreases. Inflation scares very much exist in the global economy, with the current Red sea issue and looming shadows of the Ukraine war and Israel-Hamas conflict, though the inflation rate has finally started to steady in recent weeks. Luxury car brands, hence, are highly sensitive to economic downturns and the near future must be carefully navigated.

Industry competition is another decisive market parameter. Unlike the oil market where ‘Saudi Aramco’ and its subsidiaries hold most of the market share, the sports-car segment has multiple worthy brands that are equally deserving of consumer attention. The dynamic favours the brand with better marketing, superior quality, perquisites and goodwill.

Ever heard of the hypercar brand Pagani ? Horacio Pagani, the creator, was rejected by Ferrari and Ferrucio, which marked the start of another Italian automaker’s journey to fruition. This feels a bit like déjà vu, doesn’t it ?

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