Fast cars, lean times

Is opening a supercar club in a global credit crunch a good idea? Arabian Insight visits the UAE's first, Scuderia 250, to hear the case for the defence.
Fast cars, lean times
The club, which is called Scuderia 250, will eventually own a fleet of approximately 40 of the world’s best road cars such as the Ferrari.
By Administrator
Thu 30 Jul 2009 04:00 AM

Is opening a supercar club in a global credit crunch a good idea? Arabian Insight visits the UAE's first, Scuderia 250, to hear the case for the defence.

"Nothing handles like a hire car," I tell Tim Conniff as we leave the warehouse in which he stores about two million dollars worth of supercars, supercars he will shortly be allowing members of the public to drive.

His eyes widen. "No, no," he says, "the people who say that sort of thing are exactly the type of people we don't want. We want car enthusiasts, people who love cars - not idiots who are going to thrash them to death."

Conniff is on the brink of establishing the UAE's first supercar club, with his business partner Alan van Wordragen. Today, the cars - all sleek and expensive expressions of power and grace - sit silently in the warehouse, fully insured and ready for action. The lease on the warehouse is all paid, Conniff says, and members are starting to sign up to the club.

In fact, he has paid for everything up front, mostly out of his own pocket. All he is waiting for on the day that Arabian Insight meets him in late June is to receive his business licence from the Dubai Municipality.

"I'm at a very nervous point, but I am also at a very positive point," he says.

This is the concept: the club, which is called Scuderia 250, will eventually own a fleet of approximately 40 of the best road cars on earth. Members of the club, who will pay between AED75,000 and AED120,000 annually, can drive any of the cars they please for a temporary period, up to a maximum of two weeks at a time. The maximum number of members will be 250, and each membership package is worth a number of points and kilometres, which can be redeemed against the cars on offer.

So, for example, a member who has paid AED120,000 for the top tier "Monaco" package will have 1,500 points to spend over the course of the year, and an allowance of 10,000km. If he wanted to take out the club's top of the range Bentley, doing so would cost him 20 points a day during the summer months, or slightly more during the winter months. The Ferrari California would use more points, the Porsche possibly less. And so on.

It's a nice idea, certainly if you're rich enough to be able to spend AED120,000 on a hobby - AED120,000 for which, after twelve months have elapsed, you will have precisely nothing to show. But then, Dubai is full of that sort of people, isn't it? It certainly used to be. Given the world's current financial landscape, is it still? Surely, membership of Scuderia 250 in 2009 is a luxury to make a billionaire blush...

Not so, says Conniff. He argues that if you're a fan of driving beautiful cars, then membership of the club makes perfect economic sense, and is more defensible, financially, than actually owning a supercar.

He says: "It makes perfect economic sense to join the club. People who love their cars, one way or another, they are going to get behind the wheel. Look, on average, someone who owns a Ferrari 430, he will probably only drive it for an average of 3,000km to 5,000km a year. It's normally their second, third, or fourth car.

"Now, factor in depreciation on an annual basis, servicing costs, insurance, maintenance... let alone buying it. A Ferrari 430 costs 800,000 dirhams. Depreciation is more than twenty percent, but let's say it is twenty percent, that's 160,000 dirhams straight away. Then, insurance is five percent, minimum. It adds up to 200,000 dirhams a year. Forget the cost of buying it. The car hasn't even moved yet, and you have spent 200,000 dirhams. You haven't even serviced it. But our top tier membership is 120,000 dirhams, and for that you can drive as many cars as you like."

Membership of the club, if you are a car lover, is like being a child in the proverbial sweet shop, he says. One day, you can and drive a Lamborghini, the next, a Rolls Royce, and the day after that, an AC Cobra. What's not to like?It's hard to argue with him. AED120,000 a year is about AED2,310 a week, or weekend, which is probably not much more than most wealthy men spend on pursuing their hobbies at the weekend.

Conniff makes a point of mentioning often during the interview that as soon as the club is up and running, there will be plenty of track days organised at the Dubai Autodrome. At these, he says, members will be able to fling all this expensive metal around a racetrack, under the guidance of an instructor. Certainly, AED2,310 for a weekend of racing cars on an F1 specified racing circuit is cheap at twice the price.

He says: "Most car clubs are about road cars and road cars alone, but what we have noticed here is that a lot of people really want to be on the track. We have access to the Autodrome - we are going for a test day this Friday, actually. We have a Seat Leon all kitted out for racing. Also a Suzuki Swift, and a soon we'll have a KTM. They are all fully track ready. At the top end of the track cars, we are having a Porsche GT3 Cup car delivered. But track sessions won't start until September or October."

Conniff, who looks as if he is in his early forties, made the money with which to set up this business working as a property developer in the Algarve. Given that he says he is buying and insuring all the cars upfront, and that so far he already has over two million dollars worth, with several more (Ferrari 599, Porsche GT3 etc.) inbound, property developing in the Algarve must have been lucrative work.

At this he shrugs nonchalantly, and says: "It wasn't too bad. But I sold up and got out of it two years ago when I saw hard times coming. It's a bit bleak there now, to be honest. After that, I moved to Dubai because it is tax free, and I'd been coming here on holiday with my family for years. I knew I'd find something to do.

"This is important, actually, because a lot of people at the moment are worried about start ups in Dubai - they wonder if they'll be here in a year. But with us, the beauty is that all of the cars are paid for in cash, and so are the premises. We intend to be here in the long term."

The sorry state of the economy hasn't all been bad news - cars are now available more cheaply than they were 18 months ago. So, if there are 250 people in Dubai with a sufficient love for cars and enough cash to be able to part with circa AED 100,000 of it, how is Conniff going to track them down?

He says advertising for something like this is ineffective - it doesn't get to the right people, and is missed. Rather, he wants to target individuals specifically, and demonstrate to them that the club has a strong social element to it (the first floor of the warehouse is in the throes of being converted into a lounge for watching motor-racing), in the hope that word of mouth will bring in the members.

He is targeting Emiratis and expats alike, he says, particularly regular weekend visitors to Dubai from other Gulf states, and Russians.

Besides, 250 members isn't such a huge number, is it, even in these strange times? Perhaps it is. Conniff will find out over the coming year.

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