Luxury Spending on Lamborghinis and Superyachts

So great to have with us. Stefan vin Colman. He is president CEO of the company and he's here in our Bloomberg Interactive Broker studio. He's also president of Bugatti. So you've got a lot under your plate. Are on your plate? How are you? I'm fine, Actually have to say that I'm not anymore. You are beginning of November, so it's one months now that I'm dealing only with Lamborghini.

So I'm happy forgive me because I was trying to to make some sense of some of the changes and all of this is under volks back and correct, Yes, it's under So tell us about the environment right now? What are you seeing in terms of demand? You know what we're interested in. Uh, it seems like consumers are out there shopping, specially wealthier customers. What are you seeing. So after the first and second wave of COVID, the market in luxury and supersports cars it was coming back tremendously.

And this year we will have a record here and if you buy a Lamborghini today, you will get the delivery only in December two, so we have one year waiting time. We increase production already twice. But also the super sports car business or the luxury business is not only about delivering fast, it's about not running for the peaks.

Is about producing less than demands. So when people usually wait anyway to some extent, right that they wait and they're willing to wait, and this is good because there is no other way. What about when it comes to prices and speci typically raw materials. We talked so much about inflation. That is the narrative right now when we look at many parts of the global economy, how are you dealing with higher prices? How high have they become for inputs? And are you passing those along the customers?

But generally I have to have to say that we are okay. So we are not passing anything to the customers on higher material costs right now, and we are not suffering like other commonuffectures about the shortage of the chips. So here we are well treated by the folks one group being a small company, and this is an advantage. So at time being, there is no let's say, critical point in this sense for us as Lamborghinis and your

problems that are but no problems at all. You never know we have here and there's some it's always with suppliers and with supply chain that there are things are not going accordingly and prices rising, But we have not inflated our prices higher than the normal and normal state. So this is not something we are taking advantage of. Stephen, we were talking Tim and I with another global auto executive who's been in the industry a long time, has

had different spots around the globe. YouTube you were at FIAT. You understand this world, you understand it from several different market advantages. Um, I'm curious, he said to us. It's kind of one of the most exciting times in terms of some of the disruption that's going on the move towards electrification. There's a lot going on in the industry. How do you kind of sum it up in terms

of what's going on right now? And he's got a big smile for everybody on real have to say that for us, on one hand, it's a great advantage that the market is booming. So this gives us the peace of mind at least, I think for the two to concentrate on what is coming next. As you said, is a desruptive time, is not an evolution anymore, so you have to make a clear cut and to think about what is coming next. We are already on the way

to hybridize all our lineup. Hybridized means that you still have and on combustion engine and the cars will be plugged in hybrid. We will maintain our icon our engine, which is an I Can the V twelve, So this will be a complete new engine. And I know you talked with our Matt Miller, who we always talk about, who loves supercars and all said, well, how can you have a supercar without the engine noise? Right like that

is such a big component of it. Yes, and and so we will keep it and all the lineup will be hybridized by the end of twenty four and this is enabling us to reduce the CEO two emissions and comparison of today by at least fifty So this is a good step to start with. What comes after is a full electrification. Ever we will we see that we will have a Force model. Today we have three models, so they will all be hybridized in the second part

of the decade. We're looking forward to have our first full electric car and we want to have let's say a split of the lineup two supersports cars and two more versatile cars. And the supersports cars we want to keep with internal combustion engine as long as possible, maybe with synthetic fuels. Would Lamborghini ever go fully electric, Yes, as I said, there is for the more daily usable car like us. No, I mean like not even offering

an internal combustion engine vehicle as as um. But this is something we have to see after twenty depends a lot about what the legislator is going to tell us how emissions go, emission goal goes ahead, and if there is an opportunity for for synthetic fuel, if there are synthetic fuels in the future, which I see you two neutral, then there's a good opportunity that we stay with the

super sports car also after thirty with internal combustion engines. Steven, what do you hear from your clients about I mean, obviously they're watching the trends in terms of electrifications, and we're seeing sophisticated cars on that front come along or increasingly. But I'm curious the people who buy your cards, do

they really want an electric Lamborghini. They want the peace of mind of more sustainability, and we have to deliver the promise and we have to keep the promise that the performance and the design a better than the generation of today. If these two things go together, then for hybridization, there is no issue. They are going to follow us. And we see this also because we do testing, we do clinics, and this is something which is already digested.

So it's done. Corses left the barn, we cannot roll back. Well. Well, the other thing is, let's not forget and let's be fair. I mean, regulators, policymakers write the world. We understand the importance of kind of moving in this direction and that that's just the way it is. Yeah, we cannot move out we have a social responsibility, even though with our cars we are not changing the climate. But I think that everybody has to do He's part of the of

the business. And I think that this is important also because it's more and more important not what you think about your the cars, but what your neighbor think about the car, So you always have to have the thumbs up. This is important. Hey, how do you keep the Lamborghini driving experience with the hybridization of one of these vehicles?

Because you think about a hybrid car right now, I mean you know when it's you know when it's there because it's it slows down and stop signed the engine turns off right and then starts back up again and it has a unique sound. How do you keep the driving experience the Lamborghini driving experience? Driving experience? So performance will be always our top priority. And when we speak about hybridization, we speak yes about range extender, but it's

even more about a booster. So it's increasing the power of the engine. The way to power ratio is even better than the one today, so the car will be more performing and you still will have the sound of the engines where you have today. So this is positive. At least for the next year. You talked about strong demand. Have you been surprised at how strong that demand has been. I think certainly at the beginning of the pandemic, nobody knew how this was going to play out. Nobody had

the crystal ball. We we hadn't seen this before. I'm curious, though, when did you start to say, Okay, wait a minute, things will be okay. After summer last year. After summer last year, when we recognize that this was a constant flow and it was going up and up and up every every month. We are selling workers than we can deliver. And this is as we speak, still ongoing. Do you have the workers you need to do everything? That's another

thing that we've certainly seen on a global level. We're certainly seeing it here on a job's day in the United States, where we're still we have a lot of companies that are looking for workers. Now we are we are fine. We are said we it's clear that we are in a in a phase of of of change. So competences are going to change, and we are only also looking for a new type of business or jobs. And this is not happening happening overnight. So we have

enough enough time to adapt to the new situations. So this is okay, how are you bringing that next generation of Amborghini buyers? How do you bring in millennial car? You just drive up to their door. You just drive up to their home, Tim and he just is their difference though? Is there a difference in in what potential customers who may be able to afford the Lamborghini in their twenties and thirties one right now, or or how

you want to reach them now? So then when they are in their forties and you can't afford this, they can buy one. And I think about We had a conversation with a senior executive at the Beers and we talked about that a younger generation not so interested in diamonds. So what are you saying interesting experiences than things for example? But I can tell you that if you look in the into the social media, we are the highest by far in the in the supersports car business or also

in the majority of the car business. So there is a lot of interest of the younger generation. And our brand or brand to school or brand is young design and performance a top They will not sit at our table if you don't speak about systemain ability. This is clear. They want to have a sustainable car, they want to have a digital, digitalized car. These are the two things which have to work together. And then design and performance, which is let's say the most important thing in Lamborghini.

These things have to fit. Yeah, it's I gotta say, I got a nephew who who's young, and we definitely have no problem with one of your cars, whether or not it was hybrid version. Exactly exactly what do you get? What's the benefits? I think there's some thoughts about we're seeing a lot of unlocking a value among companies where you spin out certain brands. You're under the Volkswagen brand, there's many many different brands under the VW umbrella. You know,

what's the benefit of being under that umbrella? Are there benefits to also spinning it out and unlocking some value there from an investor perspective, so a spin out is not planned. What the benefit is is clear that there are synergies in terms of suppliers. If we are asking a supplier to produce I don't know, ten tho pieces a year or a hundred thousands, you have a different level leverage, different price, different quality. This is one thing.

Then in terms of the platforms, in terms of all the things which are under the hood which are not perceived as brand relevant, are things which are helping, like electronic platform like air conditioning. There are a lot of things which are high investment and nobody knows about that. And we deliver our quality, which is in our type of business unique and this therefore the benefit for us

is really important. I just want to ask about the connection between marketing and what you did at our buzzle recently and how you can draw a line from that to selling more vehicles. But if we do things like our bossle, it's because the community is very close to our customers. Our customers go there, so having your opportunity to speak to them in an environment which is not typical automotive driven is important. To stay present in the in the mind of the people and also to be

part of the crowd. And this is not about selling cars, but this is about creating. After the let's say they sales, the most important thing is to create community, to have events to go on and off the race track, and also things like art bars are important that you go to dinner together, you you get to know them and you are in the environment they appreciate. Haven't been at our pals like I can see how it's a perfect fit. He just got about twenty seconds here. Geographically, where do

you sell the most Lamborghinis in the US? The US and China is number two? China's number two. All right, um, we're gonna leave it on that now. Thank you so much for finding time for us and have a great, safe holiday season. Really appreciate it. Stefan VN Coleman. He is Presidency of Adomabili Lamborghini, joining us right here in

our interactive broker studio. Last month, Bloomberg was out with the story is pretty cool about how the billionaire economy was cool if you're a billionaire, how the billionaire to me is booming, with demand for super yachts, mansions, and planes soaring, driven by cheap debt and rising wealth. The number of super yachts sold this year alone this is at least through mid October, increased by about sixty five

three from the same period last year's. According to some research from super Yacht Times, more than a quarter of those purchases were for new vessels. About that tim Well, people who have the money want to be able to afford or want to be able to go and yacht in luxury. Yeah, no doubt about it. Well, Stephen Myers knows about what's going on. He's the founder and CEO of the multiple listing service provider Yatko. He joins us

on the phone in Miami. Hey, Steven, uh so delighted to have you here with Tim and myself on Bloomberg Business Week on Bloomberg Radio. How are you. Thank you very much for having me. Yeah, I'm doing great. I'm actually literally sitting by the doctor the pay in Miami Beach um for Art Basil and surrounded by the sunset Harbor Marina and lovely, lively sunny afternoon. Art Fossil is really cool. It's a perfect place to sell you super yachts And just gonna put that out there pretty dark.

So listen, I'm a sailor. I've talked to a lot of brokers in the industry of the past year. They have been super, super duper busy during the pandemic. What have you been seeing specifically, Yeah, I've been in the industry for over thirty years, um, and I've we've never seen anything like it. Um. You know, it's far sur passes two thousand and seven. Uh in the boom there. Um. And you know it's a very cyclical industry. However, it's been very solid and uh, you know, the trends have

just been upwards. Um. The challenge that we now faces is inventory. Uh. You know, the the pre owned inventory dried up um after there was a rush on pre owned inventory. Uh during COVID. Obviously people wanted to to isolate themselves um and lockdown themselves on. You know, there's no better place to be than on a on a boat or a yacht, especially during a pandemic. I'm just going to point out, but go ahead, absolutely, and that

trend is going to continue. Uh. The new vote sector in has absolutely been on fire, as well as as the luxury yacht charter business as well that's now out pretty much sold out through um and uh you know, continuing on, what are you seeing from from boatmakers about how they're able to meet demand or or how wait times have changed due to this unprecedented demand. Yeah, well, I think there's a trend more towards you know, uh,

less customization, more production obviously because it's a faster production time. UM. But um, but you know, certainly the custom projects are continuing and as we get into um, you know, the half a billion dollar plus yacht market that's coming. Um. You know that that's certainly a long lead time. But right now most of the most of the semi custom custom builders are are looking at you know, uh, sold out for the next five years, um, until they find

additional capacity. Well, it really talks about the wealth creation certainly too within within our world. Um, what about Stephen in terms of their access to the supplies. I mean, a beautiful boat, you're talking about tike, you're talking about great woods, You're talking about a lot of stuff. It's also a it's you know, the bigger you get. It's basically a floating city. Um. Are you guys able to

Are the builders able to get everything that they need? Yeah, it's a challenge, but I think, uh, I think that the industry is able to meet those challenges. Um, you know, because we're we're not looking at the volumes of the housing market and so on and so forth. So it's it's it's a challenge, but I think that the industry it's not holding things back to the extent of other industries. What about when it comes to resales, Uh, that the problem there is is lack of inventory. Um. Now people

are willing to sell. But you know, if if somebody was willing to sell for twelve million, you know a year ago, now I like fourteen millions. So we've actually seen fifty nine on our yacht co dot Com MLS database. We've actually seen fifty nine price increases just in the past month, which is unheard of. Um. Normally a price increase in yachting is an anomaly, um, and it usually

doesn't send a good signal to the market. But um, you know, for the first time in my career, uh, we're seeing you know, an extraordinary number of price increases on a regular basis. Tim's really curious about what, Yeah, how do you find people to work on these boats right now? Because we see a labor shortage happening in many different industries. But if you are one of those people who's lucky enough to get your hands on on one of these yachts, how hard is it to get

a crew? Yeah, I mean, the the availability is there. Um, you know, the the the usual channel is to go through a professional crew agency. Um. There's a good pipeline and um, you know, the the the the real thing. I guess the big difference UM in the yachting industry is that which I think also attracting a lot of people to you know, to their boats and to purchase and charter is the fact of a secure environment where you know, you can control the environment of the people

that you're in. There's defind boundaries UM and you know, making sure that everybody is vaccinated U on board, etcetera. So we're seeing people with spouses that that aren't even so interested in the in the boating program that suddenly are now spending the majority of their time on board UM and uh, you know, spending less and less time

at home and more time on board. Uh. And of going to further and further remote locations like the Antarctica and Antarctics and um Norway for example, just far, far reaching places, but the crew are there um and UM. Yeah, So we're not seeing a major problem in that respect. In my next life, I think I just want to be a crew member of a gorgeous yacht and just kind of sail the world. Stephen, Hey, sit tight for

Zeke and Uh, I know you're there in Miami. We're gonna do a little bit of news and we'll come back and talk some more. We are talking with Stephen Meyers. He's the founder and CEO of Yacco. You are listening to Bloomberg Businesspeak. Still with us. Is Stephen Meyers, founder and CEO of Yako, still with us on the phone in Miami. All right, Stephen, I've been on your website checking out. No, no, no, I'm good. I'm good. I'm

actually really good, right, um? But did I am? And I was just looking at some of your different boats. You guys, though, actually do have a fair amount of boats listed. Yes, Um, However, that inventory is definitely down worldwide. Um. You know, at any given time, we typically have over ten thousand UH Central exclusive listings for sale. Um. And at the moment we're you know, probably seeing decrease um in in actual volume of availability of yachts for sale.

So it is significantly down. Um. But you know, I think I think within the next twelve months we'll we'll start to see more, you know, inventory increasing as the as the new boat availability comes back on, you know, comes back available and starts cycling again. I'm looking at this old criss craft Man that is just gorgeous Criss

crafty uh an old woody. Um, I'm curious he's buying. Uh. Well, we're seeing uh, we're seeing actually a big increase of new twenty to thirty year olds coming into the market from tech and crypto and blotching and yeah, so we're seeing that. Um, you know a lot of them are starting off with with chartering. In fact, um uh yeah, so, um,

we we're seeing that and uh yeah. In fact, I was gonna say that I actually, um, I have a boat here that was in Miami about seven years ago, and there was a very famous um founder of a tech company that I was seeing the roster of the people that chartered, you know, uh, my boat, and it was it was somebody very famous, but it's usually in our industry we kind of try to always respect confidentiality, so I won't mention the name, but it was. It

was a household name, and I was very surprised. And anyway, I'm sure he's onto much bigger, better things than uh than my uh my day boat, but it was it was nice to see, uh, you know, in the emergency of the new market that's coming, uh that's coming into the industry. Well, let's stock price range here in terms of most expensive boats that you have available on yacht co and and also what we perhaps consider entry level,

what's the range? Well, I mean, you know, entry level can can be you know, we we have boats that are tenders to yachts, etcetera. So you know, you could be looking at anything as small as a ten thousand dollar tender all the way up to you know, we're we're getting close to the you know, going over the half a billion dollar range. But you know, at any given time, for sure there's two d and five million

to three hundred fifty million dollar vessels for sale. UM. And I wouldn't be surprised if we don't see, you know, within within this decade, you know, the first billion dollar, billion dollar yacht. Um. You know, I think as particularly as as the world is changing with COVID and in this you know, ongoing pandemic, I think you know, we're definitely seeing people spend more and more time on you know,

on board uh. And I think that's going to continue. Um. You know, the the most most billionaires there, their yacht is worth more than their home. And I think that trend is going to continue. Uh. And they're seeing more

and more value by being on board enjoying life. You know, I think one of the biggest things that came out of the pandemic was people kind of took a breather and said, you know what, like life is short, and I better and get the most of most of it now and get get the most out of it now. And so I think people are spending more time, quality time with family and friends and on board and you know, exploring the world geographically. What are you seeing in terms

of buying trends? UH. One interesting thing about Europe is it's turning very green. UM. We're we're seeing you know, UM, a lot of pressure on builders to go green, you know, lower emissions, UM hybrid technology with you know UM and UM recycled materials. So we're definitely seeing the trend UM and and also pressure on marinas for for more green uh, you know, more green services. So UM. Hopefully that trend

will continue worldwide. UM. But you know, it's starting aggressively in Europe, and I think it's it's about to expand. I know at Yatto we're about to UM, we're about to take some initiatives to UM, you know, to push the green trend. UM. We've been running a series on women in yachting, and our next series will move towards UM,

you know, green trends and yachting. It's egesting because I was thinking about we had an earlier conversation UM with Stefan Winckelmann, who is the CEO of Lamborghini, and you know, they're moving towards electrification because and they talked about kind of just pressures between I mean, it's where the world is going, and there's also pressures among your consumers as well. I mean it's a few years before they're all in

an electrification. But that's interesting that you said that. And if anybody sees the environment, is anybody who's at on the water. You really see the impact absolutely, and I think I think you know the yachtsman UM and yachts women, but it's a it's a thank you for them, a longstanding term. It's a longstanding term, and I think it's

inclusive of yachtsmen and women. But uh, you know, I think that UM yachtsman and yachts women are are definitely seeing you know, they're the they appreciate the water and the environment is much, if not more than anyone. And I'm very impressed with the direction that the industry is going, and we're certainly YAKO going to take take our role and try to lead, you know, and and and lead the way and and bring more and more people on board with with UH, you know, going green and being

more environmentally and conscious and and helping Stephen. When we're speaking earlier, you mentioned that this is a cyclical industry and you haven't seen activity since like this since two thousand seven or did you say it exceeded two thousand seven? It's exceeded by by far, has has has surpassed UH two thousand seven. I mean so quote quote quote is you know from the industry veterans have known for over thirty years, I've never seen anything like this. It's on fire. Well,

so what what derails this? What what stops this from from continuing? I you know, I don't see it slowing down anytime soon. I mean the frenzy paste will slow down. UM. But you know we've seen even since the two thousand eight you know, in the upper end of the market, we've seen growth continue. UM and UM you know that trend will continue. I mean you're with with a lot of these yachts, you're looking at five year build times

and um and so you know, the courses plodding forward. Um. You're you're seeing, you know, an increase of high net worth around the world. UM and you know, more and more accessibility to yachting in markets like China and Russia and around the world. UM and UM. So you know you're you're seeing a growth throughout the world. Uh. And I think that the trend is going to continue to expand. Well, this has been a lot of fun and really a wonderful way to end up what's been a bit of

a nutty week. So Steven, thank you so much. I wish I could send you a photo from where I'm sitting right now. Now. We wish we could actually be sitting with you. Welcome on down the Miami Beach, laid our bazzels all weekend and you can enjoy the art and the yacht. We'll come first. We'll definitely confine to Steve Meyer's Stephen Myers, founder and chief executive officer of Yuko, on the phone from a lovely Miami