Maserati North America CEO James Selwa, the former President of Rolls Royce stateside, recent conducted an in-depth interview with BusinessWeek where he discussed the recent successes and future prospects for the Trident brand in the USA.

James Selwa - BusinessWeek interview by Marty Bernstein

Jim Selwa, a 31-year veteran of the auto biz, could be called a beneficiary. He has moved around some in the automobile business based on an enviable record of success. In fact, Selwa just might be the poster boy of upward mobility in the rarefied atmosphere of luxury and super-luxury automobiles. His luxury vehicle career began in the mid-80's when he handled the marketing for Rolls-Royce and Bentley at an advertising agency; in the early 90's Selwa owned and had a significant turnaround in Lotus in North America; later in that decade, he ran Land Rover marketing when it was owned by BMW.

After a brief stint with ASC as CEO, the not-shy, soft spoken or bashful Selwa took on a major challenge and the prestigious car job of car jobs: the American reintroduction of Rolls Royce, serving as President of the North American division. Now, that's an impressive business card anywhere, tasked with the responsibility of leading the world's most famous and prestigious brand of motor cars. I've known Selwa for several years and have spoken with him often, both on and off the record. Well, actually never off-the-record, not with his candour, frankness, pertinent observations, knowledge and accomplishments in the industry. A recent session was no different.

MB: First, tell me a little about you your experience at Rolls? What did you accomplish?

JS: Within 18 months of the launch in America, Rolls-Royce became the clear leader in the ultra luxury market. The Rolls-Royce Phantom out sold the Maybach by a wide margin. We sold more Rolls-Royce motor cars in 2004 than any other period since 1991. And did it from scratch with minimal budgets, less dealers and internal staff than the competition.

MB: OK, but why the switch to Maserati which had not been having great years?

JS: I never really wanted to fit into the big car company mould -- never aspired to run a company like GM, but I have developed an entrepreneurial approach and style that seems to work well within the big car company environment. I don't think I'm going to change my style at this point, I don't think I can change.

MB: Style comments acknowledged, but I'd still like to know why?

JS: Maserati brought me in because of who I am and what I've done. This is small entrepreneurial company with not a lot of pomp and circumstance and bureaucracy. They wanted someone who could move fast and sell cars. I can run in that kind of environment.

MB: So, basically it was the personal and professional challenge?

JS: At this point in my career it was a great honour to be asked to run Maserati -- to restore the image and raise the consumer profile of this great automotive brand. Ferrari provided all the engineering to build the best product for the market segment. That's a great starting point.

MB: What are your priorities?

JS: My task, my challenge is to strengthen the dealer network and launch new products on a very tight budget, raise awareness in North America, and obviously, increase sales of Maserati vehicles.

MB: Don't you think that market segment, the US$100K+ group, is getting a bit over-crowded with offerings?

JS: I have always specialized in niche markets, as they use to be called, since the mid 80's when I handled the marketing for Rolls-Royce and Bentley, in the early 90's when I owned Lotus in North America and then again in the late 90's when I ran Land Rover marketing. It all boils downs to figuring out how to be the market leader - running fast and staying lean.

MB: There are only so many millionaires in America who can afford what most people would consider an ultra-luxury car at one-hundred grand or more. Hasn't the marketplace become overcrowded and saturated?

JS: Think about this fact, Rolls-Royce and Bentley combined never hit 900 units in the past five years. In 2004, including Maybach, the numbers totalled to just over 900 units and that is at the very upper end of the price bracket." So in the US$100,000 plus price range where we sell Maserati how many customers could you possibly have -- 5,000 to 6,000?

MB: In the few months you've been at the helm, what sales progress has been made?

JS: Maserati is enjoying record sales growth. We're riding a hot streak. This is the first full year for the Maserati Quattroporte and production for North America is at a record level. Our stylish US$110,000 Quattroporte has exceeded sales expectations.

MB: Things appear to looking good for Maserati, Sales are up, but you are in a price range occupied by some tough competition -- Porsche, BMW and Mercedes -- and of course Bentley and Aston Martin. Those are pretty tough challenges aren't they?

JS: One of the biggest challenges is that we are selling in a segment that hasn't been fully explored. Six months ago we had a debate about whether we'd be able to sell over 2,000 cars in the U.S. on an annual basis. This year we are on target to surpass that number.

MB: And beyond?

JS: The challenge in this segment is to determine how big it can be. The traditional approach to sales-planning doesn't work so well. You can look at all the numbers and see how big the segment has been, but it is hard to determine your target percentage and to establish volume.

MB: A planning or forecast error could be very significant, couldn't it?

JS: The biggest challenge is making sure you don't push the volume too high and broaden the product range too far down market. Look what happened to Jaguar and the X type. People that pay over US$100,000 want exclusivity. BMW and Mercedes are becoming mainstream brands. A low end 7 series looks just like a 760 that you pay US$100,000 for to the untrained eye. The Quattroporte has established the price point, differentiators and class leading qualities. Our main challenge is to attract the right clients and make them happy.

MB: Is the United States the single biggest market for Maserati? How many cars will you sell here in 2005? And, what is the projection for 2006?

JS: Yes, North America represents over 40 percent of the worldwide volume for Maserati. In 2005, we sold 2,100 cars, about 1,550 Quattroporte's, the balance in Coupe, Spyder and GranSport models. Our sales target for 2006 is roughly the same as 2005.

MB: Has Maserati made much progress in reducing the production time and waiting list for the QP.

JS: In general terms, it takes about three to four months get a car. Most of our customers personalize their cars- hence such a time frame is necessary. On the other hand there are some dealers who order cars for stock and can probably get you a car without a wait.

MB: What's the proper inventory level for a Maserati dealer in the U.S.?
 

JS: People who buy luxury products want to have something that's very special and unique. Once something becomes commonplace and readily available, then it falls out of favour quickly and people move on to the next "hot" thing.

MB: Isn't that a tough thing to monitor, much less control?

JS: The trick is to always stay one car short of the demand and to make sure the quality is great and the residual value stays strong. Our 47 dealers don't have a lot of cars in inventory. We try to encourage them to keep a full selection of cars as demonstrators. Currently, we require a dealer to have one of each model for test driving or at least 5 cars. A dealer selling 100 plus cars will have 10 plus in inventory. That's the only requirement for inventory.

MB: The US$100,000 price range turned out to be a real sweet spot in the U.S. market for Maserati. How long before you get some competition?

JS: What we are seeing is a real market demand this type of car in the US$100,000 to US$200,000 range. Don't think for an instant that we are the only ones playing in that US$100,000 price range. I expect other manufacturers to jump in.

MB: Who do think will be a major factor in this area?

JS: Just look at Bentley in the upper part of the segment -- they are selling cars beyond their wildest dreams.

MB: What will differentiate Maserati from the others?

JS: We have a well focused product with unique attributes: a Ferrari designed- and built engine, a beautiful exterior and interior designed by Pininfarina, and the ability to create a truly bespoke (Brit-speak for custom made) car at this price point.

MB: Tell me a little about the customization?

JS: A major factor in the history of Maserati is ability to create bespoke cars. This tradition is alive today. The interior of the QP can be personalized four million different ways; from the use of exquisite Poltrona Frau leather, to stitching and piping, and the choice of several types of wood. If a customer chooses, they can dictate a particular attribute such as an exterior and interior color. Other types of high quality materials can be used such as carbon fiber and titanium to create a detailed reflection of the owners taste.

MB: Has the QP overshadowed the Coupe, Spyder and GranSport?

JS: We are doing extremely well with those cars. October, last year set a sale record. This year our sales this year will be the best ever. I think the business for our 2 door series of cars is increasing and the volume is going to be somewhere between 650 and 800 units for 2006. We are very committed to building the business for the 2 door range.

MB: The Quattroporte has been on sale for a year now, how is it doing?

JS: It is remarkable how far it has come in a very short time. In fact for 2005 it's gone from being a brand new entry to finishing 2005 leading its segment with a 33% share of the market for sedans with a base MSRP between US$100,000 and US$200,000. The individual models included in the grouping were the BMW 760, Mercedes S600, S55 and S65 and the Bentley Flying Spur.

MB: Do you think interest will remain hot in the U.S. Or, do you see this market cooling?

JS: As we continue to develop our plan, there are recent indications that U.S., consumer interest in our brand is strong and growing. Our online marketing is one example of this. A full two-thirds (66%) of all global website traffic comes from the US, which is over 25 percentage points higher than our global share of sales. U.S. consumers represent more than half (55%) of all traffic to the car configurator, showing a detailed interest in the product.

MB: And how is Maserati doing globally?

JS: Since the new Company began in 1997 with the takeover by Ferrari, the United States is the number one market for Maserati in the world. North America represents almost 40% of Maserati's total volume. Sales success in the United States is mirrored in the global success achieved by Maserati. Maserati sales were up by nearly 25% in 2005 versus 2004, for a total of over 5,600 units. January and February 2006 combined, Maserati has sold more cars than it did for the entire year of 1998.

MB: What are the other important markets for your vehicles?

JS: Riding on the success of the Quattroporte, Italy has become Maserati's second largest market in the world, followed by Germany and the United Kingdom. Our cars are sold in 57 countries on five continents with an overall network of over 281 dealerships. In the primary global markets, Maserati directly controls its subsidiaries, including a joint venture in China.

MB: Any new product for 2006?

JS: We have added two fantastic variants to the Quattroporte: the Sport GT, which develops the already sporting character of the car; and, the Executive GT, which develops the luxury nature of the car while still offering the standard version of our flagship sedan. The two-door range has been expanded with a standard 6 speed Coupe GT, and two GranSport Models at the top of the line: the GranSport LE, which is limited edition and comes with a special set of options; and, the MC Victory, again limited edition, and stylistically modeled after MC 12 in order to honour the multiple FIA GT titles Maserati won last year. We are also offering a Spyder version of the GranSport. The GS is capable of devastating performance, and to experience it in the open air is spectacular. There is not a car on the market that matches the experience.

MB: Will there be application of the Ferrari racing heritage to Maserati?

JS: Delivery of MC12s, a race car to North American customers will continue. It demonstrates the strength of the Maserati brand. None of our German competitors have produced a car which costs 1 million Euros, and is an established champion on the race track. The demand for the car far outstrips supply, but keeps the car exclusive to select clients. Only Ferrari can compete in this arena.

MB: Coming from a marketing/advertising/promotion background, what are some of the plans you envision for Maserati? I've been seeing Maserati ads with dealer names in a couple of publications including The Wall Street Journal.

JS: The ads will continue in this and possibly other publications. And this year Maserati will bring the track experience to our customers with a driving school modelled after our Master GT Maserati school in Italy. It's a thorough driving program designed specifically around our cars- with an elegant stay surrounding it. And our fashion and lifestyle accessories will be expanded to include exceptional items that coincide with luxury sport nature of the brand.

MB: What else can you tell me about Maserati's future?

JS: Maserati will expand the product line beyond the current product offerings. Alfa Romeo may come at some point, but there is no specific timetable for a decision.