(“INTERVIEW: Roadster-Maker Wiesmann Carves Niche In Europe’s Tough Auto Market,” at 0930 GMT, misspelled the first name of Wiesmann GmbH co-founder Friedhelm Wiesmann in the 3rd paragraph. The correct version follows:)
DUELMEN, Germany -(Dow Jones)- Scale is everything in European auto making as much of the industry struggles to spread the huge cost of developing new engines and models over sufficiently large production volumes. But Wiesmann GmbH, a niche German manufacturer of retro-styled roadsters, is demonstrating small can be beautiful despite suffering its fair share of pain in the aftermath of the financial crisis.
Demand for Wiesmann’s pricey sports-cars plummeted by about 40% over 2008 and 2009. But as much bigger rivals making mass-market vehicles struggle with high costs and slack demand, the family-owned manufacturer has stayed on the road as global demand for luxury vehicles has recovered fast.
The firm makes “fun vehicles,” said co-founder and owner Friedhelm Wiesmann said in a recent interview at the company’s headquarters in the small German town of Duelmen. “You have to want to treat yourself to these cars,” Wiesmann said.
Wiesmann is now eyeing the Chinese market for the next stage of its expansion. “The sports-car market in China is developing gradually – it’s time that we [go] there,” Wiesmann said. The firm plans dealerships in Shanghai, Beijing and possibly three other cities.
The history of Wiesmann, whose logo is a gecko to symbolize the road-holding ability of the two-seater sports car, goes back to a visit Friedhelm Wiesmann and his brother Martin paid to a regional motor show in Essen in 1985. They felt there must be demand for a luxury roadster engineered in Germany that would compete with the likes of the U.K.’s Morgan Motor Company.
They started to design cars in their private cellar, presented the first prototype in 1988 and started to produce hard-top roofs for other brands in 1989 to help finance their own car-production. After developing the prototype for five years, production of the first car – the MF3 – started in 1993. Wiesmann launched of the GT MF4 model in 2005.
The firm added more dealerships in following years as sales gained traction and opened a larger manufacturing facility in 2008 only months before the collapse of Lehman Brothers triggered the financial crisis.
“The year 2009 was a complete disaster,” Wiesmann said. The owners had to invest additional money to keep the business afloat.
The gamble paid off as the industry recovered faster than expected and demand for luxury cars surged across the globe in 2010 and 2011. Wiesmann has sold more than 1,500 roadsters in total so far. According to the latest corporate filing from the privately-held company, Wiesmann estimated 2011 profit at EUR1.4 million on revenue of EUR37 million and expects significant sales growth this year.
Sticker prices for Wiesmann car start at EUR102,900 for the MF3 model and can easily exceed EUR200,000 for some vehicles and customized versions. The prices in China are bound to be about three-times as high as in Europe due to import tariffs and high taxes, Wiesmann said.
“Our customers are financially independent and drive for example a Mercedes-Benz S-Class or a BMW 7-series as their main car. Our roadsters are often their second or third car,” Wiesmann said.
The Wiesmann roadsters’ retro design is party practical, sparing the firm of cost of coming up with innovative new styling.
And beneath the hood are state-of-the-art engines from BMW AG (BMW.XE). Purchasing certain parts from the world’s best-selling premium car maker was crucial for Wiesmann to establish a financially viable business given cost of engine development.
Wiesmann has no plan for a closer tie-up with BMW. “It wouldn’t be the same company any more,” Wiesmann said.
He recalls that BMW initially was anything but impressed when it first heard that the some small family-run business in the German countryside was assembling cars using its components. “One day we had an order to cease-and-desist in the post,” Wiesmann said.
The Wiesmann brothers went to BMW’s Munich-based headquarters and managed to convinced BMW’s then-technical chief Wolfgang Reitzle, today the CEO of Germany’s Linde AG (LIN.XE), and BMW’s former design chief Chris Bangle of the quality of their cars.
After all, Wiesmann is hardly a threat to BMW which, with record sales of 1.7 million vehicles in 2011, is at the other end of the luxury car-making spectrum.
Copyright © 2012 Dow Jones Newswires