The international "super car" entrepreneur
Chirag Shah is the chairman of écurie25, one of the biggest “super car“ clubs in the world, which allows its members to share ownership of some of the most sought after luxury cars. With bases in Australia, Dubai, the U.S. and UK, Bdaily spoke to Chirag to find out more about the business.
Hi Chirag, so how did you get into the luxury car industry?
“I’ve worked in the automotive industry most of my life – first as a Manufacturing Engineer and later as a Management Consultant. At the age of 30 I started my first business in the dotcom boom and I’m onto my fourth venture since then.
“I have a degree in Engineering from Cambridge University complemented by an MBA from Insead which was sponsored by the Sainsbury Management Fellows”
Very impressive! How did the business idea for écurie25 develop?
“ Credit has to go to former F1 World Champion Damon Hill who founded a similar business in 2000. Supercars are luxury toys. They are very expensive to own and operate, and due to their uncompromising design they are only enjoyed by their owners very occasionally.
“A typical Ferrari ownership experience involves owning a car for 2 years during which time the owner drove it about 4000 miles and suffered about £75,000 in depreciation. A cost of over £20/mile once insurance and maintenance costs are included.
“écurie25 offers its members the opportunity to share in the ownership and operating costs of such cars whilst also providing a greater variety of cars than just owning a single vehicle.”
The business has clubs all over the world, where is the main base for the firm and how do you see it expanding?
“We’re truly a global business. Founded originally in London, today we have as many members in Australia and USA as we do in UK.
“As Chairman I am based in Dubai and take the lead on corporate finance, joint ventures and M&A activities. The CEO is located in Australia and runs Marketing and Operations from there and our President is based in USA and manages Brand Partnerships and franchise activities.”
So écurie25 allows people to make money from the supercars, and allows people to drive the cars without owning them. This “asset light“ theme is one we’ve seen in many businesses, such as online music service Spotify.
How have you seen this trend of renting, rather than owning, grow?
“I think this trend has really taken off only in the last few years; for a couple of reasons. Firstly, the Global Financial Crisis has made luxury consumers really question what value they are getting from their high value material assets and consider whether there are smarter ways to extract the same value – the trend is going on in property, boats, jets and now of course we are bringing the same ideology to cars.
“Secondly, I think there is a wider shift amongst consumers from ‘ownership’ to ‘experiences’; we are seeing the dawn of the ‘Watch Me’ Generation – there’s nothing cool about posting a picture of your Aston Martin sitting in your garage on Facebook – you want people to see you driving one with the top down over the alps.
“So businesses that offer these kind of services in a cost-effective manner stand to grow very rapidly. The concept is so popular, even supercar owners are offering us to take their cars and use them in exchange for a share of the profit just as you might let your holiday home through a real estate agent.”
The product is a obviously a very luxury product – who is your target market?
“Most of our clients are owners of small to medium sized businesses, partners in professional services firms or medical professionals. This group make enough money to own their own supercars but they also like to keep a low profile in terms of their wealth and public reputation.”
Where do you see the business in 5 years time?
“As market conditions improve, and the network effect of having more and more clubs starts to take effect, we are opening clubs all over the world more and more quickly. As Chairman my focus is now turned to how we can leverage both our capabilities in asset-sharing and our global network of members to diversify into related segments, such as boats, luxury condos and maybe even jets.”