What Has Four Wheels, Costs $1 Million, And Goes 240 Mph?

Clark Gable drove one in the 1930s, and so have later generations of rock and movie stars. They all slid behind the wheel of high-priced Interceptor and Jensen-Healey sports cars from Britain's Jensen Car Co. But this year, the luxury-car maker has run out of petrol. It has sold just one car in the past six months--a $200,000 Interceptor. Now, about all that stands between the company and the liquidators is a devoted fan: Peter Gardner, 49, owner of two Jensens and a machine-tool company near Liverpool that makes Jensen parts, is offering $1 million to keep the carmaker alive. "If I don't buy it," he says, "it could go extinct."

These are dark days for Europe's exotic-car industry. With weak economies turning even the rich into penny-pinchers, it's harder and harder to find buyers who'll cough up $100,000-plus for flashy, superfast models. In the value-for-money '90s, many car enthusiasts, even if they have cash to burn, opt for more fuel-efficient, trouble-free cars. The downturn has halved the worldwide market: Sales this year are estimated at 5,000 cars, vs. 10,000 a year in the late '80s.

As the market shrinks, staying in the race requires clever maneuvering. Exotic-car customers aren't exactly the sort who respond to TV ads hawking $2,000 rebates. Buyers are demanding new products with the latest technology, limited production to preserve investment value, and easy access to servicing facilities. That spells big money. It gives an advantage to companies with powerful backers, such as Jaguar Cars, owned by Ford Motor Co., and Ferrari, 90% owned by Fiat. It has money-losing Rolls Royce Motor Cars Ltd., now owned by Vickers PLC, on a global search for an automotive partner.

Exotic-car buffs are watching to see how Ford steers its two battered British luxury cars--Jaguar and Aston Martin--through the recession. They're impressed Ford management allowed Jaguar's supercar XJ220 project, conceived three years ago, to continue. Now, the $750,000 coupe that zips along at up to 212 mph--the fastest car in production--is rolling out to rave reviews. All 350 copies of the limited-edition Jaguar have been presold. "There's room up there for a number of competent players with a good product and worldwide distribution," says Karl E. Ludvigsen, an auto-industry consultant in London.

Other makers of supercars are following Jaguar's lead. Next year, Britain's McLaren International Ltd., known for its Formula One racing expertise, will deliver the first of what it bills as the ultimate driving machine: the $1 million F1, a limited-copy three-passenger sports car, where the steering wheel is in the middle of the car, rather than on either side. It's rumored to have a top speed of 240 mph. Not to be outdone, Yamaha Motor Co.'s British subsidiary, Ypsilon Technology Ltd., has unveiled a sports car code-named OX99-11, powered by a modified Formula One engine. Yamaha will make about 100 of the cars, priced at $1 million each.

HALO EFFECT. Despite the fancy prices, supercars aren't big money-makers. But they provide vehicles for testing high-tech, high-performance parts that could be converted to mainstream cars. And the halo effect helps sell lowbrow models while burnishing the reputation of large parent companies.

Reputation, after all, is what it's all about in the exotic-car business. Rolls Royce, one of Britain's most enduring symbols of manufacturing excellence, proved as much when it relaunched the Bentley line of grand touring car, selling them for up to $350,000 each. Bentley's Continental R two-door coupe now has a two-year waiting list. Ford's Aston Martin Ltd. tried to compete against the new Bentley coupe with a $250,000 car called the Virage, but sales have stalled, as the buyers in this rarefied world prove their fickleness. The Virage, says World Sports Cars editor Darren G. Styles, "frankly isn't particularly good-looking."

Some companies are betting that constant updating is the way to survive. Italy's Ferrari is offering a 512 TR coupe at $262,000, the latest of the Testarossa line. It also plans to come out with a high-tech, limited-edition roadster and a new four-seater--a rarity in sports cars. And there's more: a convertible version of the less-costly 348, which sells for about $157,000. In contrast, Lamborghini, owned by Chrysler Corp., draws criticism for not offering more new models. But its new $309,000 Diablo roadster has been well received.

Jaguar and other builders of supercar collectors' editions acknowledge that the era of the 200-mph sports car may soon be over. Their research is focused on lighter, more fuel-efficient--and slightly more practical--cars. Even so, the Peter Gardners of the world needn't worry. There will always be exotic cars for those with megabucks to spend on fancy wheels.

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