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Gearing up for more Spyker cars

Updated Wednesday 18th September 2013

How will Spyker's operations need to change if production of their sports cars increases tenfold?

Spyker Aileron on test track Copyrighted image Icon Copyright: BBC I am Dutch, and in a curious way talking about Spyker makes me beaming with some kind of national pride!

Sure, one may have reservations about some of the business decisions of Spyker’s charismatic CEO Victor Muller. Neither the 2006 buyout of the F1 Midland racing team to establish Spyker F1 team nor the bold takeover of SAAB Automobile in 2010 seems to have done the company much good.

Yet at the same time, through Muller’s vision, the company has produced a series of highly remarkable cars. Few will be able to resist turning their heads when a Spyker drives by.

This is no run-of-the-mill German sports tourer or screaming Italian racehorse but a handcrafted piece of automobile art, capable of catching considerable attention, regardless whether driving on the misty Dutch polder roads, the sunny boulevards of California or in the exclusive neighborhoods of Moscow, Beijing or Dubai.

But ok, let me put aside my excitement about the latest addition to the list of conversational topics that comes up when one says that one is from Holland—that small country in the north of Europe known for its windmills, cheese, that little boy who stuck his finger in the dike to save the country, coffee shops and—I am almost embarrassed to admit—for coming up with the Big Brother TV show.

Spyker CEO Muller is currently facing an interesting challenge, perhaps one that he should have given priority to much earlier rather, than getting involved in racing cars or turning around SAAB. He needs to increase production to strengthen the position of the company in the market and take it to the next level.

When talking about the market for Spyker cars and his ideas for a new model, Muller asserts that at least 10.000 people will like what he likes. And he is probably right…

With the introduction of the new B6 Venator the company seeks to increase its annual production to around 500 cars. From the current setup, however, 500 cars represents a tenfold increase in production, and from the perspective of the people in Production, this will result in considerable changes in how they make the car.

Even when Spyker has no aspirations to become like Ford—i.e. a mass producer of cars—a production increase like this will imply taking a very different approach to the production process. Producing near one-of-a-kind cars is not the same as producing a larger series of near-identical models, and the impact of this change on the people in Production should not be underestimated.

Because Muller plans to put a price tag on the B6 Venator car that is nearly 40% lower than that of its only other model, the C8 Ailerion, the design and manufacturing departments have their work cut out. Spyker will have to explore all the available avenues for cutting costs.

Efficiency gains through increased production numbers will result in savings, introducing simplifications (when comparing it to the C8 model) will result in some more. The biggest opportunity for cutting costs, however, will come from where the car is produced, either in its entirety or parts of it.

In other words, Spyker will have to actively explore the opportunities of outsourcing. Outsourcing, however, may clash with their carefully built image of a being a Dutch producer of hand built automobiles (for the time being, only the car’s engine is explicitly sourced externally, from Audi).

But it can be done. Porsche has outsourced the entire production of its Boxter and Cayman models and these models are not considered less Porsche for it. They are considered the entry models of the brand, just as the B6 Venator will be for Spyker.

For the moment, the biggest hurdle in achieving its cost target may be Muller himself. His habit of making design changes up to the moment that the cars go into production will have to be reigned in.

Outsourcing is like flying low cost airlines. To get the best deal you need to commit well ahead of time and refrain from changes of any kind, or face the penalty. For Spyker this means freezing the design well in advance of production to allow the planning and purchasing departments to source inputs at the lowest possible cost.

Muller will have to learn to save up his new ideas for periodic facelifts rather than implementing them instantly. Would I like the Spyker B6 Venator less for it? Probably not. Will the target customer for the B6 Venator do so? I doubt it—but I could be wrong.

For the time being, Muller has been able to get the B6 Venator to the market his way. But production has been limited to a concept car to be shown at leading automotive events—still a unit production. However, as far as some potential customers are concerned, he has nailed it with the B6 Venator, and that must mean a lot to Muller.

In the end the Dutch word for nail is ‘spijker’ just like the original spelling of the brand (which was changed in 1903 to be able to market the brand better in foreign countries). Great job Victor, you’ve “Spykered” it!

 

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