When this magazine initially discussed the world’s ‘first Arab supercar’ nearly a year ago it is fair to say that the idea was a long way from fruition. Lebanese entrepreneur Ralph Debbas had big plans for his company W Motors and its $3.4 million Lycan cars, but they seemed remarkably like pipe dreams. Not so anymore.
The basic facts of the car remain incredible – twin turbo-charging engine reaching 7,100 revs per minute, 0-100 kilometers per hour (KpH) in 2.8 seconds and a maximum speed of 395 KpH. It also looks beautiful and is, as supercars tend to be, exorbitantly expensive and exclusive – at $3.4 million dollars each, they are only planning to make seven, with the designers dubbing it “the most exclusive car in the world.”
But supercars are a niche market – targeting not the world’s 1 percent but the 0.01 percent – and breaking into that market is a daunting challenge, especially with competitors including Ferrari, Lamborghini and Porsche.
It appears that Debbas and partner Sari el-Khalil are getting there. With the backing of FFA Private Bank, they today launched a search for $6 million in investments to finalize the first version of the car, due to be launched at the Dubai Motor Show in early November.
While it may initially seem a strange project for FFA to be involved in, it is part of an increasingly varied portfolio of deals: the bank recently was involved in the financing of the Hollywood blockbuster Two Guns. The bank’s Head of Investment Banking Julien Khabbaz said their involvement, though their first in the world of supercars, was based on solid financial decisions. “It is a great opportunity for investors, with estimated Internal Rate of Return of between 31 and 43 percent,” he said.
While half of investments by private customers are exchanged for equity, the other half are secured debt guaranteed by Debbas’ Lebanese real estate, so risks are also slightly lower than other investment opportunities. Investors will also have priority return over founders through annual reimbursement of the debt.
Khabbaz is confident that the company’s growth targets will be met: “The estimated returns are based on the first seven cars [being] sold in two years but my assumption is it will be faster than that [and yield better returns].” He added that the highest-end luxury was less affected by the current economic global climate as billionaires continue to spend.
Potential investors must have deep pockets, however, with a minimum spend of $100,000. Khabbaz said he was not sure how many investors would be needed to make up the $6 million, as one or two may invest over a million dollars each.
It is highly possible that, with the backing of the prominent FFA, W Motors will find enough investors to get the $6 million needed to launch the first version of the car later this year. The next challenge will be to convince the world’s richest that theirs is this year’s must-have play thing.
To do this they will need to develop a brand, something they are in the process of developing. Pitching itself as the first Arab supercar, Debbas is cleverly trying to tap into pan-Arab sentiments whilst creating a product so good that billionaires globally will want it too. The car is set to appear as a major part of the forthcoming seventh movie in the Fast and the Furious franchise, with much of the film based in the United Arab Emirates.
So while many of the cars features may seem a little gaudy (diamonds and rubies in the lights, really?), they may play well in the Gulf where bling is most definitely still in. And behind the not one but two holograms is the potential for an incredible car, with Austrian firm Magna Steyr responsible for the interior and exterior design and Germany’s RUF Automobile developing the chassis and engine.
With only seven cars to sell, the difference between success and failure is likely to be incredibly fine – with the initial reaction of those lucky (and rich) enough to test it at the end of the year likely to determine whether it is a hit or a miss. Success will lead to a ‘more affordable’ but slightly less exclusive sister car – with 25 of the $1.5 million Supersport version planned. For those looking at investing in the firm, it represents a risky opportunity but a potentially lucrative one.