Lamborghini is an Italian luxury sports car manufacturer founded in 1963 by manufacturing magnate Ferruccio Lamborghini. Since that time, ownership of the firm has changed several times. Another financial crisis in the late 1990s saw Lamborghini sold to Volkswagen through its subsidiary Audi AG. The subsidiary remains the owner of Lamborghini today. And it’s part of the Volkswagen Group.
Ferrari vs. Lamborghini
As the story goes, Ferruccio Lamborghini was the owner of a tractor factory that he run. We’re in between the 1950s-60s in the Northern part of Italy, the heart of the production district.
A strip of land with hundreds of small and medium businesses.
He also was the proud owner of two Ferraris.
Yet each time he drove them the clutches would fall apart. So Ferruccio tweaked them with a clutch from his tractors and it worked wonderfully!
Yet as Ferruccio Lamborghini passed along the feedback to the legendary Enzo Ferrari, the owner, and founder of the homonym car company.
Ferrari, instead of listening to Lamborghini’s feedback and improving the car, scorned the man, who was also a loyal customer.
As the story goes Ferrari told Lamborghini:
“you don’t know how to drive a Ferrari!”
Lamborghini went back home pissed.
Back home from Maranello, as Ferruccio sat at the dinner table with his family he lamented how badly Ferrari had treated him nonetheless being a great customer for Ferrari and the owner of a factory that made over 50 tractors per day!
Out of just frustration, Ferruccio said to his family he would try to build his own car.
His family tried to persuade him from doing that. Yet Ferruccio thought to cut the marketing costs of advertising their tractors through billboards and instead use them to build the car.
“At worst,” he thought, “the fact that Lamborghini had made his own car would make such a noise that it would have repaid it back!”
Everyone in the family was against that decision.
Yet Ferruccio was stubborn.
Ferruccio said to all,
“you’ll see that if the car is done how I like it, everyone else will love it too!”
Within a few weeks, he had put together the team to build the car.
Similar to Ferrari with a Prancing Horse as a symbol, Lamborghini instead picked the bull.
The first iconic model The Lamborghini Miura launched. This is how one of the most iconic car luxury brands was built out of frustration for how Ferrari treated Lamborghini as a customer!
The Miura revolutionized sports cars as it had the motor at the center and with an integrated differential gearbox and that all came out from a Ferrari lover!
As Ferruccio Lamborghini explained the best marketing cost is customer support while very very expensive. If done right it turns into a powerful word-of-mouth loop with a huge ROI!
And the opposite is true! When you let down your most loyal customer base, you might be missing out on a huge business opportunity.
Today Lamborghini is as much an iconic brand, as Ferrari.
Yet both brands were sold.
Lamborghini is now part of the Volkswagen Group, and Ferrari is owned by Stellantis which inherited it from FIAT.
Founding and early headwinds
Before starting the company in question, Lamborghini owned a successful tractor company that also expanded into air-conditioning systems and boilers. Such was his success that he was considered one of Italy’s great industrialists.
Flush with money, Lamborghini purchased a Ferrari 250GT. He then had the idea to start his own car company and commissioned a firm to develop a V12 engine for a new grand touring car that could compete with Ferrari.
The first Lamborghini – dubbed the 350GTV – was unveiled at the Turin motor show in 1963. A stretched version of the car known as the 400GT 2+2 was later unveiled in Geneva in 1966 which, like its predecessor, was well received by the public.
Sales were sufficient that Lamborghini could employ 170 staff at its Sant’Agata factory. However, sales suffered a major decline after the 1973 economic downturn and oil crisis.
At the age of 57, Ferruccio Lamborghini sold 51% of the company to friend and business partner Georges-Henri Rossetti for $600,000. He sold the remainder in 1974 to mutual friend René Leimer, severed all connections with the brand, and retired to an estate in central Italy.
Bankruptcy
The change of ownership did little to reverse the company’s fortunes. Lamborghini declared bankruptcy in 1978, with Swiss food entrepreneurs Jean-Claude and Patrick Mimran appointed by a court to manage the company whilst in receivership.
Patrick Mimran then embarked on a massive restructuring that included an overhaul of the Lamborghini factory. He also scoured the globe for a new team of designers and engineers and oversaw the release of popular models like the Countach and LM002 SUV.
The Mimran brothers then sold the company to Chrysler for $25.2 million.
Chrysler and others
During the brief three years it owned Lamborghini, Chrysler developed the successful Diablo which at the time was the fastest production car in the world. Chrysler started to siphon profits for other endeavors, but once Diablo sales plummeted, the American company sold Lamborghini to MegaTech – a subsidiary of Indonesian conglomerate SEDTCO.
While sales were increasing, Lamborghini was still in the red and was once more restructured in 1995. This time, 60% went to V’Power Corporation while the remaining 40% was held by Malaysian firm MyCom Bhd.
Fiat veteran Vittorio di Capua was then hired in 1996 with the hope that he could make the company profitable. Costs were subsequently cut and several executives were fired, and di Capua was also able to increase Lamborghini’s production efficiency by 50%.
Who owns Lamborghini today?
The Asian financial crisis of the late 1990s instituted another ownership change. As part of a buying spree that included Bentley and Bugatti, chairman of Volkswagen AG Ferdinand Porsche purchased Lamborghini in 1998 for around $110 million.
The deal was made via Volkswagen subsidiary Audi AG. According to Audi spokesman Juergen de Graeve, this was done so that Lamborghini “could strengthen Audi’s sporty profile, and on the other hand Lamborghini could benefit from [Audi’s] technical expertise.”
Lamborghini remains under the ownership of Audi AG today.
Key takeaways:
- Lamborghini is an Italian luxury sports car manufacturer that was founded in 1963 by manufacturing magnate Ferruccio Lamborghini. Since then, ownership of the firm has changed several times.
- Lamborghini declared bankruptcy in 1978 because of the economic downturn and oil crisis of the time. It was then purchased by two food entrepreneurs who subsequently sold it to Chrysler. After three years, Chrysler sold the company to Indonesian conglomerate SEDTCO.
- Another financial crisis in the late 1990s saw Lamborghini sold to Volkswagen through its subsidiary Audi AG. The subsidiary remains the owner of Lamborghini today.
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