The past year has been a rocky time for the US auto industry, but the high-end has been more insulated from the recession. Automobili Lamborghini, owned by the Volkswagen group, recently announced that it actually experienced 1 percent sales growth for 2008, when orders increased to 2,430 from 2,406 the year prior.
A new breed of companies is looking to tap this demand by making the high-end, turbocharged experience more affordable. One company, New York-based Gotham Dream Cars, maintains a fleet of 18 super cars and offering a range of products, from exotic rentals and club memberships, to the increasingly popular "Dream Car" tours—a six-hour, 150-mile journey allowing drivers to experience multiple cars in a single day.
There are similar companies across the country. Rent A Vette has operated in Las Vegas for 28 years, and Gotham founder Noah Lehmann-Haupt calls it the originator of the dream-car tour. A newer player in the market is DFW Dream Cars, an elite auto rental in Texas.
Here's how this lucrative, high-end business operates and what goes in to a "Dream Car" tour. Click ahead to check it out!
By Paul Toscano & Oliver Quillia
Posted 8 May 2009
With prices starting at $595, Gotham's tours allow clients to rotate between the company’s Ferrari 360 Spyder, Ferrari F430 Spyder, Maserati Quattroporte, Lamborghini Murcielago (pictured), Lamborghini Gallardo and Gallardo Spyder, spending 20 to 30 minutes in each car.
On any given tour, the company has six to 10 clients, with the past four tours completely selling out. The popular “Dream Car Tour” takes drivers on a six-hour, 150-mile cruise along public roads.
Founded in 2004 by Noah Lehmann-Haupt, Gotham Dream Cars experienced near 1000-percent growth in its first three years, generating $2.9 million in revenue for 2007, the most recent numbers available. This rapid growth earned it a spot on the Inc. 500 list of fastest growing companies.
Lehmann-Haupt started Gotham Dream Cars by purchasing a single car. Since its inception, the company has grown to offer a diverse range of supercar-related services. His personal favorite: the Ferrari F430 Spyder (pictured).
The route of the tour is a strategically planned mix of highways, mountain roads and side roads—a course through New York and New Jersey that Gotham has refined down to a science. Although it may sound interesting to drive these cars through New York City, or any urban area, the company found that for an experience like this, drivers prefer to stay on open roadways instead of idling in urban traffic.
The company recently trimmed their fleet from 22 to 18 vehicles. While still profitable, the company's year-over-year sales are down 10 percent from 2008. Like most American companies, they’ve trimmed expenses, cut costs and run a leaner operation.
The company’s fleet consists of a variety of Lamborghini models, Ferraris, a Saleen S7, several Bentley Continentals and other models from Rolls Royce, Mercedes, Maserati and Aston Martin, among others.
The most expensive car in the fleet is the Saleen S7, a rare super car commanding a price tag of about $400,000. The rental rate is $2,750 per day, and $13,000 per week.
The most popular car in the fleet is the Lamborghini Gallardo — “Simple, and the least expensive exotic we offer, and right now people are seeing that as the most bang for the buck,” says Lehmann-Haupt. Gotham’s rental rate is $995 per day, or $4,990 per week.
Depending on the model, maintenance can range from 50 cents to $2 per mile, with each car getting plenty of use — anywhere from 10,000 to 30,000 miles per year.
The company also employs a full staff to maintain the vehicles on a day-to-day basis, in order to ensure that the cars are in top shape prior to driving. Cars of this value and performance require specialized service and equipment.
One might think the company’s customer base would be pegged to the likes of high-rolling corporate heads and investment bankers, but Lehmann-Haupt has observed a more eclectic group of customers.
"There is no single type of client. The only common denominator is that it’s just people that love cars,” he says. “There isn’t a typical customer; there isn’t a typical customer behavior. The only thing that is consistent is that 98 percent of the people who drive are male. We’ll get 21 year olds, we’ll get 81 year olds.”
Despite the diversity of clientele, participating members gave similar reasons for taking the May 7 tour, noting they had received the tour as a gift, celebrating either a birthday or an anniversary.
Some clients said they hope to own a Lamborghini or Ferrari some day, but the less-costly dream tour is a better fit, for now.
Though the company began as a high-end car rental service, it has effectively expanded into a range of products surrounding these super cars. The variety ranges from the dream car experience and rental service to luxury car transport and the "Dream Share" membership club, which allows members access to the company’s cars throughout the year. Annual membership costs range from $18,000 to $49,000.
"Any one of these products may not be profitable alone—we can only conduct our business because we have a multitude of products, and it allows our company to be diverse and flexible, especially in times like these," says Lehmann-Haupt.
He also notes the most profitable part of the business is the dream car tours, which makes more use of the "down time" during weekdays, as much of their sales are made over weekends.
Typical rentals are over weekends with average rentals lasting no more than one or two days. Lehmann-Haupt also notes that one of the cars was recently rented to a client in Washington, D.C., for 45 days, with a discounted rate for extended use.
The company gives an extensive safety and usage orientation where the rules of the road and use of the vehicles themselves are explained. The tour is conducted on private roads, and the drivers are responsible for obeying speed limits and driving responsibly.
By getting behind the wheel, the driver becomes responsible for all parking, traffic, speeding or other tickets or violations issued while the vehicle is being driven. When renting the cars, a driver must pay for any fees, penalties, towing charges, or impound costs.
"The goal is that everyone is going to be able to drive at a fun pace. The cars move with traffic in a safe way, without breaking the law," says Lehmann-Haupt.
Accidents, although extremely rare, have happened. During the orientation, a few mishaps were brought up as examples, and although no one has ever been hurt in a Gotham car, the driver is responsible for damages incurred. In one extreme case, a car was totaled and the driver’s insurance was required to foot the bill.
As a result of increased demand from enthusiasts, Gotham is holding its first-ever Legends Car Tour June 9-10 in New York. The tour will feature Lamborghinis exclusively and famed test driver Valentino Balboni will be on hand, driving with participants on the tour. The company hopes to increase the volume of this kind of event, but has only one "Legends Tour" currently on the calendar. The cost of participating in the inaugural tour is $1,495 per driver.