Lamborghini had its most profitable year ever during Covid

The year the coronavirus pandemic hit was also Lamborghini’s most profitable year in history.

“We were surprised,” says Stephan Winkelmann, the new (and former) boss of the 58-year-old brand, speaking via a private video call on March 15. “An ideal model mix and the growing customization of our products pushed profitability to the highest levels.” By that, Winkelmann means the wildly successful Urus SUV and the sold-out runs of high-dollar, low-volume supercars such as the $3.3 million Sian. The Italian unit of Volkswagen AG delivered 7,430 cars worldwide in 2020, second only to the 8,250 it delivered in 2019, according to the company.

Lamborghini declined to specify its exact operating margin, or the percentage increase from 2019, but said it ended the year with a turnover of €1.61 billion ($1.93 billion), down 11% from 2019; it attributed the decline to 70-day production stoppages in spring 2020. Comparatively, net profits at fellow Italian brand and rival Ferrari decreased by almost 13% in 2020.

The U.S., with 2,224 vehicles delivered, remains the top market for Lamborghini sales, with Germany coming in second (607 vehicles sold), and China third (604 vehicles sold). After reporting even stronger sales year over year so far for 2021, China should finish this year in the second position, Winkelmann says.

Chinese car buyers in recent years have developed an appetite for ultra-luxury SUVs from the likes of Rolls-Royce, Bentley, and yes, Lamborghini. (Ferrari plans to launch its own SUV in 2022.) In China, as elsewhere, high-performance, mid-six-figure SUVs outsell the rest of the sedans and sports cars in those manufacturers’ lineups. Last year the Urus accounted for 59% of Lamborghini sales worldwide. “Urus is giving us peace of mind in terms of return on investment and also earnings, and the earnings are giving us the confidence to reinvest in the future,” Winkelmann says. “It is clear the diversification we are having with Urus is helping us a lot.”

Declining to address speculation about a likely Urus hybrid, he suggests asking again in a few weeks. Instead, Winkelmann says, the year ahead will focus on the commercial launch of the Huracan STO and two other cars “based on the iconic V12,” but he offers no additional specifics. Lamborghini has seen more customer orders and deliveries of its cars in January and February of this year than it did in the first two months of 2020—and that was before Covid-19 reached pandemic proportions. “We have already covered with customer orders nine months of the year for 2021,” Winkelmann says. “So we are looking at the year 2021 in quite a positive bent.”

Lamborghini’s strong income and highly profitable “limited special series” models, which are positioned like sneaker drops and carry price tags of $3 million or more, have closely followed the strategy set by Ferrari, which spun off from Fiat Chrysler Automobiles (now Stellantis NV) in 2015. Asked about a possible sale, Winkelmann says, “I don’t think this is something which will happen soon.” He notes that the brand is “very well positioned” in the VW group.

According to estimates from Bloomberg Intelligence, a Lamborghini initial public offering could generate more than €10 billion of shareholder value for VW.

By Hannah Elliott (Bloomberg)