Million-Dollar Hypercars Lure Elite to Swedish Craftsmanship 

Sept. 30 (Bloomberg) –- If you like very fast, very expensive cars, you'll love boutique Swedish car manufacturer Koenigsegg. Founded 20 years ago, it's delivered just 100 vehicles to wealthy enthusiasts around the world, with top speeds approaching 300mph and world record-breaking acceleration and braking. Bloomberg speaks to founder Christian von Koenigsegg at the manufacturer's headquarters on an old airfield in southern Sweden. (Source: Bloomberg)

A photo in Christian von Koenigsegg’s office shows one of the 41-year-old Swede’s limited-edition supercars -- a 2011 Agera R, in fire-engine red -- alongside a sparkly gold abomination that looks like it drove off the set of “Chitty Chitty Bang Bang.” The latter is a recreation of the car von Koenigsegg first saw at age 5 in a stop-motion Norwegian film called “Flaklypa Grand Prix,” which tells the story of a small-town bicycle repairman who builds a race car from scrap parts and -- in the face of doubt and ridicule from established automakers -- goes on to win the 24 Hours of Le Mans.

Von Koenigsegg watched the film dozens of times and, with each viewing, became more certain of its message: Anyone can make a great car, Bloomberg Pursuits magazine will report in its Autumn 2013 issue.

More from the Autumn issue of Bloomberg Pursuits:

“I just thought, ‘If a bike repairman can do it, so can I,’” von Koenigsegg says in his office at Koenigsegg Automotive AB, located on a former Swedish Air Force base on the country’s verdant south coast.

Von Koenigsegg’s stocky frame is clad in slim-fit designer jeans and a tailored blue oxford with a small CvK monogrammed on the breast pocket -- though these aren’t the first things you’d notice about the man. He suffers from alopecia areata, an autoimmune disease that causes the body to reject hair and can result in partial or total follicle loss. The precise cause is undetermined. In early company photos, von Koenigsegg has a full head of dark hair; however, for many years, he’s been not only bald but also lacking eyebrows and any other visible body hair.

“Maybe it’ll come back,” he says with a shrug. “I don’t really know.”

Bond Villain

Von Koenigsegg’s bald pate and his mellifluous, lightly accented English, not to mention his headquarters on a remote, decommissioned military base, bring to mind a Bond villain. And the association is apt, for while von Koenigsegg’s ambitions may not be malevolent, he’s nevertheless bent on world domination, at least in the realm of seven-figure supercars.

The automobile industry is littered with the skeletons of failed startups driven by a single man’s all-consuming vision. Think Tucker, DeLorean, Fisker -- and those are just the famous ones. (A major recent exception, of course, is Elon Musk’s Tesla Motors Inc. (TSLA)) Conventional wisdom holds that it’s essentially impossible to create a car company from scratch and actually make it work. The costs are too high; the barriers to entry, too great. Yet that’s what von Koenigsegg has done.

$1.4 Million And Up

Koenigsegg Automotive’s cars -- which start at $1.4 million -- are today some of the most exclusive and sought-after assembly-line vehicles on earth. In the best of years, the company builds only 12 or 14, each one tailored to a specific buyer.

Earlier this year, the company built the 100th car in its 19-year history. Nicknamed the Hundra (Swedish for Hundred), the 1,030-horsepower, carbon-fiber Agera S was constructed from more than 4,000 custom parts and finished with stripes of 24-karat gold leaf, applied by an artisan flown in from Italy. It’s bound for a customer in Hong Kong.

Asia is definitely our biggest market,” von Koenigsegg says.

Koenigsegg Automotive’s only effective competitors in the so-called hypercar space (loosely defined as limited-edition, handbuilt cars costing in excess of $1 million) are Italy’s Pagani Automobili SpA and France’s Bugatti Automobiles SAS; the latter currently dominates the category with a whopping annual output of 30 to 35 vehicles.

Most Popular Hypercar

Koenigsegg controls about 25 percent of the market but has the influence of a far larger brand, at least among exotic-car aficionados. At April’s Geneva auto show, the Hundra was named “Most Popular Hypercar,” beating out highly anticipated masterpieces by Automobili Lamborghini SpA, Bugatti, Ferrari SpA, McLaren Automotive Ltd. and Porsche SE.

Koenigsegg Automotive is known especially for performance. The company holds the world record for acceleration (zero to 300 kilometers per hour in 14.53 seconds), for braking (300 to zero kph in 6.66 seconds) and -- the one that makes its founder proudest -- for both acceleration and braking: zero to 300 kph and back to zero again in 21.19 seconds, a number that suggests outstanding overall performance rather than just raw power.

Darren Jablow, a supercar connoisseur and founder of online car-buying site Speedlist, describes Koenigsegg cars as the “manic, peel-your-face-back, fighter-jet hot rods of the hypercar world.”

Seven-Figure Sculptures

The field of hypercars swells this year with the unveiling of seven-figure sculptures on wheels by Ferrari (LaFerrari), McLaren (the P1) and Porsche (the 918 Spyder). Von Koenigsegg isn’t concerned.

“Out of 7 billion human beings, 100 a year are buying hypercars,” he says. “We’re already a big player in a tiny segment.”

And although von Koenigsegg plans to ramp up production for 2014 and beyond, it won’t be by much.

“We could live very well on 18 to 20 cars,” he says -- a number so minuscule the company barely registers within the wider automotive industry. Ferdinand Dudenhoeffer, director of the Center for Automotive Research at Germany’s University of Duisburg-Essen, estimates that about 67 million cars are sold annually worldwide and that even an exclusive automaker such as Rolls-Royce Motor Cars Ltd. is selling some 4,000.

“A company like Koenigsegg,” Dudenhoeffer says, “is more a hobby than a business.”

Born Tinkerer

Von Koenigsegg grew up in the suburbs of Stockholm, the son of a serial entrepreneur and a haute couture hatmaker whose clients included Sweden’s royal family. A born tinkerer, von Koenigsegg took apart toasters and tape players before moving on to go-carts, mopeds and motorbikes. Even as a child, he says, he wouldn’t just look at a side mirror and think, “Cool!” Instead, he would wonder precisely why it was constructed as it was.

“I never say I’m a car designer,” says von Koenigsegg, who didn’t bother with college and has no formal training in design or engineering, on a tour of his surprisingly quiet factory.

The two-story space housed Saab fighter jets for the Swedish Air Force until 2003; the squadron’s logo, a ghost, has been appliqued on the back window of every Koenigsegg built since the company moved in.

“I like to say the car designs itself but that I’m the guide,” he says.

Napkin Squiggles

Most anything that ends up in a Koenigsegg vehicle begins in the founder’s brain, often expressed as a squiggle on a napkin. The shape of Koenigsegg cars today is still basically the same as the one that von Koenigsegg first imagined in August 1994: a midengine car with short front and rear overhangs, large side air intakes, a round windshield and a detachable hardtop. It took von Koenigsegg two years to make a running prototype of that car, which would become the CC (for competition coupe).

“Let’s say the vision has stayed intact,” he says, opening the door of a royal blue Agera R with black accents.

Von Koenigsegg has just returned from Singapore -- he’s fighting fatigue, as well as a cold -- where he personally delivered an Agera S to that country’s first-ever owner of a Koenigsegg. (Because of Singapore’s high automobile taxes, it cost the buyer $4.5 million.)

“They say it is the fastest, most powerful car ever sold in Singapore,” von Koenigsegg says, noting that the speed limit in the tiny city-state is 90 kph -- 300 kph slower than the top recorded speed of an Agera S.

Rethinking Everything

The model for most automakers, especially small ones, is to take existing parts -- brakes, engines, transmissions -- and combine them in a car of proprietary design. It’s far cheaper and typically more pragmatic from an engineering perspective to buy parts from companies that have already spent thousands of hours and millions of dollars on research and development.

Von Koenigsegg looks at things differently. His company not only makes its own brakes, engines and transmissions but also nearly everything else in the car, right down to the titanium bolts, every one of which is stamped with the company logo, a stripped-down version of the 900-year-old von Koenigsegg family crest.

The result, Car and Driver editor-in-chief Eddie Alterman says, is a truly artisanal supercar. “He’s rethought just about everything,” Alterman says.

’We’ll Build You a Helicopter’

In total, some 4,000 hours of handcraftsmanship goes into each vehicle. Though Koenigsegg offers standard models -- the Agera S and the Agera R (which runs on biofuel) are his current offerings -- the company considers itself a bespoke shop.

“People often ask, ‘How customized can I have my car?’ If you pay us enough, we’ll build you a helicopter,” von Koenigsegg says. “I think we are capable technically of doing pretty much anything.”

When asked if there’s anyone to whom he won’t sell a car, von Koenigsegg replies that until recently he’d always said yes to anyone who could afford to buy one. That’s changed.

“We now say no if we think they’re not the right buyer,” he says, adding that certain people are simply too much trouble. “It doesn’t happen often, but that’s quite a nice thing to be able to do.”

One thing that isn’t a barrier to entry, he says, is skill. Every Koenigsegg car comes with a full suite of what von Koenigsegg calls “safety nets,” including traction control, stability control and an antilock braking system.

‘Easy to Handle’

“This makes the cars very easy to handle and very safe in any driving condition,” he says. “Anyone with common sense and a driver’s license can safely handle a Koenigsegg.”

All the systems, except for the ABS, can be turned off if the driver feels he’s experienced enough to do so -- which von Koenigsegg does not often recommend. “If the controls are turned off and full power is used, you need to be very skilled,” he says.

“In day-to-day traffic, it is surprisingly docile and easy to drive,” says Jeffrey Cheng, Newport Beach, California–based president of JDJ Investments and the owner of a silver Koenigsegg CCX, a model created exclusively to meet the standards of the U.S. market. Of course, that’s not why he has one. “It’s just brute horsepower when you step on the pedal -- like a locomotive,” he says.

Cheng’s car is one of 12 known Koenigseggs in the U.S. He bought it in early 2013 from Ben Abrams, a Seattle entrepreneur who felt he wasn’t making the most of it.

‘Dating a Supermodel’

“Driving a supercar like the CCX on public roads with speed limits could be compared to dating a supermodel but only being allowed to hold hands,” Abrams wrote on the website eGarage upon selling the car.

Another American owner, a telecommunications entrepreneur from Chicago who prefers to remain anonymous, owns two Koenigseggs. He actually drives them to the grocery store, although he’s also used one to achieve 215 mph on an airport runway, likening the experience to piloting a jet plane.

So coveted are Koenigseggs that even their namesake doesn’t own one.

To take a car off the line would be to take a car away from a customer, so von Koenigsegg instead drives a Saab (SAABB) 9-5 with a cracked windshield. He bought the white four-door -- the last all-new model Saab built -- in 2009, when he briefly led a coalition in a bold attempt to save the iconic Swedish brand. The deal went so far as to be announced in the press before von Koenigsegg and his partners pulled out, after negotiations dragged on for more than six months and promises from various banks and governments went unmet.

‘Right Thing’

“Looking back, it was the right thing to do,” he says. “Many people say to me now, ‘You were lucky that never happened.’ They might be right.”

Still, it’s an intriguing thought: What could Christian von Koenigsegg have done with Saab? And would the ultimate artisanal automaker really have been happy mass-producing automobiles?

“My dream has always been to build cars,” von Koenigsegg says. “I love hypercars, but I’m just as intrigued by the idea of improving a normal car.”

Back in his office, Koenigsegg flips his computer monitor around to reveal a project that will further redefine the concept of a hypercar -- a money-is-no-object venture begun at the behest of his Chinese dealer, who desired something “extreme” to sell to his more demanding customers.

“We are spending thousands of hours of engineering and tooling and testing for a very limited number of cars,” von Koenigsegg says.

One:1

The One:1 is named after its ambition to be the first assembly-line vehicle to truly achieve a one-to-one ratio of weight and horsepower. If successfully produced, it will weigh 1,400 kilograms and put out 1,400 horsepower, a quantum leap over the 965 horsepower of the base-model Agera.

“Other cars have achieved this but by measuring dry weight -- no oil, no water, no fuel,” von Koenigsegg says.

His number will take into account all the necessary fluids and even the driver. Computer simulations project that the One:1 will be the fastest Koenigsegg yet, capable of 450 kph or more. If the computers are correct, it will also be the fastest car in the world from zero to 200, from zero to 300 and from zero to 400. Engineers expect the last number to be around 20 seconds. To put that in perspective, it takes the Bugatti Veyron 45 seconds to achieve 400 kph. Von Koenigsegg expects to have a prototype by the end of the year.

Land-Speed Record

Prospective buyers should note that the strictly limited production of six has been presold and that there’s already plenty of pent-up demand should any of those lucky few fall through. The price isn’t yet public, but von Koenigsegg says it’s “substantially higher” than that of the Agera S.

Even so, he admits, the company will almost certainly lose money on the project -- which he says doesn’t concern him. Building a hypercar that sets new land-speed and acceleration records will only burnish Koenigsegg’s credentials, and future Koenigsegg cars will likely benefit from the trickle-down R&D originating with the One:1.

Von Koenigsegg toggles through a series of renderings, admiring his imminent creation from various angles.

“No one needs a car like this,” he says, twisting his mouth into a smile. “They just need to want one.”

To contact the reporter on this story: Josh Dean at josh@joshdean.com

To contact the editor responsible for this story: Ted Moncreiff at tmoncreiff@bloomberg.net

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An 806-horsepower engine helped the CCR set the Guinness World Record for fastest assembly-line vehicle. Photograph: Courtesy of Koenigsegg Automotive

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An 806-horsepower engine helped the CCR set the Guinness World Record for fastest assembly-line vehicle. Photograph: Courtesy of Koenigsegg Automotive Close

An 806-horsepower engine helped the CCR set the Guinness World Record for fastest assembly-line vehicle. Photograph:... Read More

Christian von Koenigsegg at his factory, which housed fighter jets for the Swedish Air Force until 2003; the squadron's logo, a ghost, is visible on the back wall and is appliqued on every Koenigsegg car. Photograph: Vincent Fournier/Bloomberg Pursuits Close

Christian von Koenigsegg at his factory, which housed fighter jets for the Swedish Air Force until 2003; the... Read More

The Agera R holds world records for acceleration and braking. Photograph: Vincent Fournier/Bloomberg Pursuits Close

The Agera R holds world records for acceleration and braking. Photograph: Vincent Fournier/Bloomberg Pursuits

Von Koenigsegg makes his own brakes, engines and just about everything else in the car, right down to the titanium bolts stamped with his family crest. Photograph: Vincent Fournier/Bloomberg Pursuits Close

Von Koenigsegg makes his own brakes, engines and just about everything else in the car, right down to the titanium... Read More

The CCX was the first model to meet U.S. safety regulations. Note the company's unique door, which reinvented the gull-wing style. Photograph: Courtesy of Koenigsegg Automotive Close

The CCX was the first model to meet U.S. safety regulations. Note the company's unique door, which reinvented the... Read More

The 1,019-hp CCXR runs on biofuel. It was billed as the world's first environmentally correct supercar. Photograph: Courtesy of Koenigsegg Automotive Close

The 1,019-hp CCXR runs on biofuel. It was billed as the world's first environmentally correct supercar. Photograph:... Read More

Swedish for "take action," the Agera has seven speeds and a twin-turbo V-8 that puts out 910 hp. Photograph: Courtesy of Koenigsegg Automotive Close

Swedish for "take action," the Agera has seven speeds and a twin-turbo V-8 that puts out 910 hp. Photograph:... Read More

Koenigsegg's most recent model, the Agera R, runs on biofuel and boasts a top speed of 440 kph. Cost: $1.6 million. Photograph: Courtesy of Koenigsegg Automotive Close

Koenigsegg's most recent model, the Agera R, runs on biofuel and boasts a top speed of 440 kph. Cost: $1.6 million.... Read More

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