By Jo Winterbottom
PARIS (Reuters) - Luxury sports carmaker Lamborghini sees no recovery in its markets until 2011 after a 30 percent drop in sales in the first five months of this year, Chief Executive Stephan Winkelmann said on Wednesday.
Still, first-half figures would be positive, and the company, based in Sant'Agata Bolognese in central Italy, would achieve a full-year pre-tax profit, Winkelmann told the Reuters Global Luxury Summit.
"We could stay profitable with sales that are dropping at 40 percent (in 2009). We are foreseeing a scenario that is staying on the same level next year and coming back in 2011," he said. "I'm prepared to face another tough year in 2010."
Known for its low, sleek designs and high top speeds, Lamborghini identifies itself as "uncompromising and extreme." Its badge carries the image of a bull.
"We are the bad boys," Winkelmann said. Its main competitor is Ferrari, owned by Italian carmaker Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz).
Lamborghini was founded in 1963 by Italian Ferruccio Lamborghini. It is now a unit of the Audi brand (NSUG.DE: Quote, Profile, Research, Stock Buzz), owned by Europe's biggest carmaker, Germany's Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz).
Lamborghini sold 2,430 cars in 2008 and prices range from 170,000 euros to 360,000 euros, Winkelmann said.
Its biggest market is still the United States despite a fall in sales of over 40 percent there in the first five months. Winkelmann said he expected China to overtake Italy as its second-biggest market in the next three to five years, up from ninth-biggest last year.
Lamborghini boosted pre-tax profit by 27 percent in 2008 to 60 million euros ($84.66 million) on revenue up 2.5 percent to 479 million as it cut costs.
Winkelmann said the company had cut production by 30 percent in line with the sales fall this year. But even so, waiting time for deliveries had fallen to 6 months from over a year.
DEEP CRISIS
Lamborghini is in "constant dialogue" with its suppliers to help them "bridge a difficult situation," Winkelmann said. It has temporarily laid off workers for seven weeks in total so far under an Italian state-supported scheme.
"We are in the middle of the line between suppliers and dealers and we also have to deal with the unions," he said.
The company has lost customers in real estate and investment banking markets which have been hit very hard by financial market turmoil and the credit crunch.
"I think the crisis is very deep," he said. Continued...
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