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Callaway Hopes to Rev Up Sales with Lamborghini Partnership

Tom Rotunno|CNBC Producer
Thursday, 30 Sep 2010 | 11:21 AM ET

Forged Composite. If you are golfer and you don’t know those words, Callaway Golf is looking to change that. Preferably by the time you begin your holiday shopping.

Looking to rev up slumping sales in the beleaguered golf industry, the company announced today a strategic partnership with automaker Lamborghini in a quest to find the strongest, lightest and most durable materials.

The alliance was announced at the 2010 Paris Motor Show by Automobili Lamborghini President and CEO Stephan Winkelmann and George Fellows, President and CEO, Callaway Golf .

In a joint statement the companies said the agreement will allow their R&D teams to “collaborate and develop innovative technologies and materials designed to enhance the performance of each company’s products”.

Source: lamborghini.com

For Lamborghini, a partnership with a golf manufacturing company is a natural fit. “We see power-to-weight ratio and weight reduction as the keys for future super-sportscars and carbon fiber as the material to achieve these goals” said Winkelmann. “Callaway’s expertise in specific technologies is strategic for our research projects.”

For Callaway, it's hoping to lead the golf industry down a new path and give golfers a reason to trade in that old driver for a new one. Callaway is well known for setting trends in the marketplace, first with the original Big Bertha (made of steel) 20 years ago and later with oversized titanium drivers via the Great Big Bertha in 1995.

Titanium is now the dominant material design with over 95 percent of all drivers on the market today made with an all-titanium construction.

Callaway has long been looking for the next great material. Recently, carbon fiber materials have been the focus, with lighter and stronger metal alloys compared to titanium. The problem has been precision, which carbon fiber lacks. The company hopes it has found the answer in Forged Composite, the first material to result in its collaboration with Lamborghini.

Callaway Looking to Rev Up Sales
Callaway golf and Lamborghini are making a big bet to rev up sales of both companies, with CNBC's Darren Rovell.

Callaway says the material is the lightest, strongest and most precise material it has ever employed. Despite having just one-third the density of titanium, Forged Composite allows for a greater load carrying capacity per unit mass in bending. For golfers, that means greater power upon impact, resulting in longer and straighter drives.

Lamborghini is using the Paris Motor Show to unveil the Sesto Elemento, its first design made using the new material.

“The introduction of the Forged Composite technology allowed Lamborghini to realize the monocoque and the suspension arms of the Sesto Elemento with groundbreaking quality and costs levels,” said Maurizio Reggiani, Director Research and Development of Lamborghini. “Our next challenge is to make this technology a standard for low volume productions.”

As for Callaway, it's betting big that Forged Composite will forever change the way it makes golf clubs going forward. For now, it’s already changing how the company does business—for the first time since 1995, Callaway will not be offering an all-titanium design in its upcoming product line.

The new Forged Composite driver is being released in November—you guessed it—just in time for the holiday shopping season.

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