Tony Joseph vividly recalls his first tour of McLaren’s British headquarters when the supercar company recruited him to launch its foray into North America.
He marveled at its orderly and pristine production facility, where just under 5,000 cars will be handmade to order this year. He passed by skilled technicians fine-tuning heart-stopping Formula 1 race cars.
And he strolled along a boulevard lined with every trophy the company owns.
“You have to remember that McLaren’s the only team that’s ever won every major race event,” he said about the visit that sealed the deal for joining McLaren in 2009. “They had trophies lined up. The actual trophies.”
McLaren requires its drivers to give up trophies to the British company, he was told. Winning drivers are given replicas.
“The rationale is the team won the trophy, not just the driver,” he said. “And it's truly the philosophy of the company.”
Fast-forward 10 years and Joseph is the executive who steered McLaren’s North American headquarters from New York City to a 33,000-square-foot location in a business park in Coppell near DFW International Airport. Its 21-employee team is expected to grow to about 30, including its port operations that handle deliveries from the U.K.
It’s not the biggest corporate relocation to North Texas by any measure, but it’s an alluring brand that sees Dallas as a critical market to raising its profile with sports car buyers. After Southern California and South Florida, sales in Dallas are neck and neck with Toronto, Joseph said.
McLaren makes two-seat sports cars that appeal to enthusiasts who crave styling and performance, with models ranging from $215,000 to $1.5 million. It recently introduced a GT series, billed as the first McLaren that can accommodate a set of golf clubs.
North America accounts for more than $300 million of the company’s $1.6 billion in annual revenue, which McLaren generates from its automotive, racing and applied technologies divisions. The latter works with airports, hospitals and non-automotive industries to adapt McLaren technology for other uses. A few years ago, for example, it helped develop an ultralight bicycle using carbon fiber technologies common in race cars.
Joseph made the move to Preston Hollow in August and already considers Dallas his long-term home. He said he likes the region’s business friendliness and affordability, something his employees also are enjoying after moving from the costlier East Coast.
Joseph, the president of McLaren’s North America operation, sat down with The Dallas Morning News to discuss the company’s relocation, its appeal and what it does to build customer loyalty. His answers are edited for brevity and clarity.
How did the relocation to the Dallas area come about?
When we set up as an organization, I was the only international employee in 2009. We didn’t sell our first car until December 2011, so we were completely starting from scratch. We’re a U.K.-based company, and the head of the company said set up the office wherever you want. I always claim I did it for the cachet of being in New York. But more honestly, I did it for selfish reasons. I didn’t want to move, and I was living in New York. Looking back at it, it didn’t make a whole lot of sense because we were in a high-rise on the 24th floor, and we’re a car company.
For the first couple years, it seemed like a good move because we didn’t have any cars. But as we continued to grow, it became more and more evident that we needed more space. And we had fewer and fewer senior people living in New York. If we had a meeting in the city, it was so difficult to get to New York. It’s not difficult to fly into New York, but it’s difficult to get into the city once you’ve flown into New York. We needed to look at other alternatives.
We hired KPMG to do a search, and Dallas was one of the places they came back with. It’s very business friendly. It’s centrally located. The airport is one of the easiest to get in and out of. It made perfect sense. Dallas is a growth city. It’s a strong market for us, and there’s even more potential here. Texas is home to the only F1 race in the U.S. in Austin. By being in New York, we were focusing more on eastern dealerships. The person who loves this move the most is our diagnostic manager — our flying doctor. When he used to travel to Vancouver, it could take him three days to get there and back. Now to go from Dallas to Vancouver and back, he could be there in a day. So he’s loving life at the moment.
What did you tell KPMG you wanted in a headquarters city?
Business friendliness, an international airport, quality of life, the ease of finding a location that met our needs. And we wanted to be accessible to customers or dealer staff. All of those factors went into it, and it was really no contest. It came down to Atlanta and Dallas. Throughout my career, I’ve lived in Atlanta three separate times, and Atlanta is a great city. However, the traffic in Atlanta is crippling, and it puts you back on the East Coast. Whereas in Dallas, you can go in either direction.
What exactly is being relocated here?
We’re moving from a 4,500-square-foot facility to a 33,000-square-foot facility. We’re moving our North American operations — finance, marketing, sales. We will have a service area for diagnostics, and we’ll maintain our own press and marketing fleet and cars for the track programs we run. We’ll have a diagnostic manager who can address any problem a dealer is having or customers are having. We’ll have an area that we call McLaren Special Operations, the customization customers can do to their cars. Customers can come in and spec out their vehicles. Each and every Senna [its most expensive car] customer is involved in a spec session because it is so uniquely built to the customer’s taste. Over the last year and a half, we’ve been doing training in Dallas. It’s centrally located, so it’s easy for dealers to come.
How many dealers does McLaren have in North America?
There are 25 dealerships in the U.S. and three in Canada, which is about half of what other niche brands have. Our strategy has always been to go with fewer dealers and grow as we go. We launched with only nine dealers in the U.S. and Park Place in Dallas was one of them. The chairman of Park Place, Ken Schnitzer, is a very good operator. He’s the dealer representative we worked with to roll out our dealer agreement. He had the respect of other dealers. If we got him on board, we could get the other dealers on board. He was very important to us. In our second year in business, we had very few dealers around the world. But that year, Dallas was the No. 1 dealer in the world. That would have been 2013. Since then, Park Place has consistently been in the top five.
How important is the North America market to McLaren?
We’re going to be probably 46% of global sales. We’ve had a little bit of a slowdown in China and the Middle East this year. Overall, we’ll sell just under 2,000 cars this year in North America.
Who’s your typical buyer, and where does the new GT fit in?
We looked at the GT as a segment with potential for us. It’s McLaren’s interpretation of a GT, meaning it’s a much more comfortable road car than we’ve ever built. But it still has all the performance attributes of any other McLaren. It’s 612 horsepower, which is significant in that segment. And you can fit golf clubs in it. We expect it to be an everyday driver for some.
Our customers are very diverse. I was traveling back from an event we do every year in Pebble Beach, the Concours d’Elegance. I was sitting in the airport, and there was a couple behind me and this woman came up to them and said, ‘Wow, I love your sweatshirt.’ They were wearing McLaren sweatshirts. She said, ‘How can I get one of those sweatshirts? I’m on my second McLaren. I love my McLaren. I drive it everywhere.’ After she finished the conversation, she went back to her seat, and I walked over to her and said, ‘Sorry, I eavesdropped on your conversation.’ I gave her my card and told her I’d send her one of those sweatshirts. This woman was 75 years old and lives here in Dallas. She’s very much an enthusiast. She drives her [McLaren] to Walmart, Costco, Tom Thumb. She drives it everywhere. I would not have put her in our normal demographic.
We also see a lot of kids bringing their fathers to McLaren events. They know the brand from video games. We consider ourselves to be innovative and cutting edge. I think customers see that and that’s what attracts them to the brand. There’s no question we are performance-oriented. But the car offers three suspension modes — comfort drive, sport drive and track mode. You could drive to the mall or the grocery store in comfort mode. It provides that level of comfort as well as performance.
A lot of our customers are very loyal to the brand. We do lifestyle-type events, a lot of rallies, a lot of get-togethers. The customers are very genuine and like talking about their car. We have a lot of customers who want to know what their car can do on the track. It is an amazing car to drive. When our dealers give somebody a test drive, we tell them to make sure they go for a 25- to 30-minute drive so the customer can feel the different suspension modes, the handling, the performance, the acceleration.
Let’s talk a bit about your background. How did you go from Subaru to Porsche to Maserati to Ferrari to McLaren?
I grew up in southeast Michigan. When I got out of college in 1991, we were in a recession in Michigan. I worked construction for a couple of years before I actually got into Subaru. I started in Chicago, and that’s when Subaru was [debuting] the all-wheel-drive Outback. Soon after that, I got promoted to the South, based in Atlanta covering eastern North Carolina. Subaru was a relatively small company at that point. I like to work for small companies because you’re exposed to a lot of different areas of the business. When you work for a large company, especially in the automotive industry, you could take one part of what I do and it could be a full-time job. In a small company, it’s about 15 minutes, once a month. I’ve excelled in that type of environment.
While I was in Atlanta, Porsche relocated from Reno to Atlanta and was hiring a new team. All it had was the 911, and it was getting ready to launch the Boxster. I had an opportunity to move to Porsche. I started as a business management analyst and then moved up to a regional director, which moved me to northeast Ohio. I was responsible for part of the U.S. and eastern Canada. I was there for about four years. As time went on, I would visit dealerships that I thought could be improved upon and it just wasn’t happening. So I took an opportunity to manage a dealership for a couple of years in Pittsburgh.
While I was there, the gentleman I worked for at Porsche went on to run Maserati. Maserati and Ferrari were one company and Maserati was just launching in the U.S. He was vice president of sales and looking for help to launch Maserati in 2003. He continued to call me and ask if I wanted to come back to the corporate side. I eventually relinquished and moved from Pittsburgh to New York. A year and a half later, Maserati and Ferrari split. I was asked to go to the Ferrari side exclusively. They’ve all had a loyalty factor, a niche factor to them.
Porsche and Maserati have gotten into SUVs. Is that something McLaren would consider?
We’re not considering that at the moment. We focus on what we’re good at — the two-seat sports car. Our production facility is essentially maxed out at 6,000 cars. We wouldn’t even have the production capabilities to build that type of car, if we wanted to.
How does McLaren differentiate itself to customers?
We’re such a new brand. We lack brand awareness. If we drove a car down the street here, there’d be a lot of oohs and aahs. But I’m not 100% confident that everyone would know exactly what it was. When we launched, people showing up at events was somewhat sparse. Now when we do an event, it’s completely maxed out. People bring their cars and show them off and there’s excitement. We have about 6,500 owners in the U.S. now. When there’s a Cars and Coffee on a Saturday or Sunday and there’s a McLaren there, it does garner a lot of attention. I was in NorthPark mall not too long ago, and there was a McLaren getting a significant amount of the interest. It is a car that stands out. It is very exotic-looking. It is a supercar.
Do your customers expect a higher level of service that goes along with buying an exclusive car?
They do, and we do our best to provide that. A lot of that has to be done through our dealer network. We have a client service department now, and we’re continuing to grow it. The other day, a customer sent me a message on LinkedIn. He had an older car, and he just had a story he wanted to tell me. So I set up a call and spoke to him. He said just being able to talk to somebody at the company was a huge deal to him. We want to be exclusive, but we want to be accessible. We have customers that never even visited a dealership and the car is shipped to the customer. The salesperson usually goes along with it.
Do electric cars fit into McLaren’s future?
Last year, McLaren launched a business plan called Track 25 that stated by 2025, we will have 100% hybrid technology in our vehicles. That’s our objective at this stage. In terms of full electric, we’re still exploring if there’s an opportunity in some sort of limited capacity or ultimate series capacity. But no decisions have been made.
Describe how you engage customers with your track days.
One of the largest is at Circuit of the Americas [in Austin]. It’s the week after the F1 race. We take cars there, we bring coaches in. It’s pretty elaborate. Circuit of the Americas is the most desired track right now in North America. People want to get on that track. We offer a three-day program and different courses depending upon your skill level. People come from all around for that. We’ll have some people in from Europe. We had a Japanese customer last year. That’s where we can get people — behind the wheel.
What kind of car do you drive?
My everyday car is a Porsche Cayenne. I have a 6-year-old daughter and a car seat. So a McLaren is impractical. It’s my wife, my daughter and me, and only two seats. Occasionally, I’ll take a marketing car for a drive. I very much enjoy the Spider 720s. And there are beautiful roads to drive around here.