Company / Analytics

Analytics, 19 March 2021

Lamborghini Profits and Outlook

Despite a two-month shutdown of its Italian factory during the pandemic, Lamborghini had its most profitable year ever in 2020. The Volkswagen-owned brand sold 7,430 cars worldwide in 2020, second only to the 8,250 it delivered in 2019. Strong income came from its highly profitable “limited special series” models. China has also fueled a lot of demand and would overtake Germany as its second-biggest market this year.

About Lamborghini

Lamborghini is an Italian brand and manufacturer of luxury sports cars and SUVs based in Sant’Agata Bolognese. The company is owned by the Volkswagen Group through its subsidiary Audi.

The carmaker had its most profitable year ever in 2020, with strong income from its highly profitable “limited special series” models. The brand sold 7,430 cars worldwide in 2020, second only to the 8,250 it delivered in 2019. Of these, 2,224 vehicles were delivered to the United States, which remains the top market for Lamborghini sales. Germany came in second with 607 vehicles sold while China came in third with 604 vehicles delivered.

Lamborghini’s strong income and highly profitable “limited special series” models, which 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) in 2015.

In particular, Lamborghini’s new sports utility vehicle (SUV) is called Urus and has been hugely successful, accounting for 59% of the company’s sales worldwide last year.

Growth expected to increase in China

After reporting even stronger sales year over year so far for 2021, China could finish the year in the second position, replacing Germany for the first time. In recent times, Chinese car buyers have developed an appetite for ultraluxury SUVs from Rolls-Royce, Bentley, and Lamborghini.

In China, as elsewhere, high-performance, mid-six-figure SUVs outsell the rest of the sedans and sports cars in those manufacturers’ lineups.

Lamborghini’s revenue and Oultook

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 euros ($1.93 billion), down 11 percent from 2019. The brand 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 percent in 2020.

Overall, the outlook for 2021 looks even brighter as soaring stocks and asset values around the world boost the fortunes of wealthy car buyers. Wealth creation from cryptocurrencies, special purpose acquisition companies, IPOs, and company takeovers has also created a new generation of younger supercar buyers. The biggest challenge for Lamborghini is the tightening of emissions regulations around the world and the shift to electric vehicles.

Lamborghini’s parent-company Volkswagen has been working on emissions-free electric vehicles. The company aims to more than double electric vehicle sales in 2021 — matching the roughly half a million electric cars that Tesla sold in 2020 — after more than tripling EV sales last year.

Lamborghini hasn’t announced plans for an EV, but its CEO hinted that announcements could be coming in April.

Can I buy shares in Lamborghini?

Currently, investors cannot buy a stock solely in Lamborghini, as the brand is under the Audi umbrella, which itself has been majority-owned by the Volkswagen Group (the conglomerate, not just the Volkswagen brand) until they took full ownership this summer

There are speculations that Volkswagen has been working to spin off Lamborghini for a while, and an initial public offering may soon come to pass.

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

But asked recently about a possible sale, Lamborghini CEO Winkelmann said that, “I don’t think this is something which will happen soon.” The brand is “very well-positioned” in the VW Group. Mr. Winkelmann added that “Volkswagen Group is the perfect match for Lamborghini.”

Should you buy Volkswagen stock?

The current consensus among 23 polled investment analysts is to buy stock in Volkswagen AG. The 20 analysts offering 12-month price forecasts for Volkswagen AG have a median target of 28.13, with a high estimate of 35.71 and a low estimate of 19.05. The median estimate represents a -21.75% decrease from the last price of 35.95, according to CNN Business.

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