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REVIEW SUMMARY
Company. Speedster Motorcar Sales
Industry. Auto manufacturing
Key. Controlling overhead and investing in new technology are two ingredients for success.
Florida's industry recruiters like to joke there aren't any carmakers in the state.
They're wrong.
Speedster Motorcar Sales is a small Largo company tucked away off Ulmerton Road that has been building antique replica cars for about 30 years. Now, it's got big plans to break out of the replica-car niche by building electric cars with technology developed by a neighbor in St. Petersburg called EVnetics.
“That's the future,” says Jeff Akins, Speedster's director of marketing whose father, Michael Akins, started Speedster decades ago.
Challenging times such as these bring companies like Speedster and EVnetics together because both are looking for ways to diversify their operations. In Speedster's case, a decline in sales forced it to look at new opportunities it didn't have time to explore during the boom. For EVnetics, it is looking for new ways to take advantage of the alternative-energy craze that's sweeping the car industry and giving startup companies like Tesla a leg up on the giant lumbering automakers.
For both companies, these times offer a way to collaborate and challenge well-established carmakers with new technology. “We're going to come out and mop up,” says Sebastien Bourgeois, a French Canadian economist who heads EVnetics.
Speedster's signature cars are replicas of Auburn Cord Duisenberg automobiles that were popular in the mid- to late-1930s. It manufactures kits for customers who want to build them and also sells them assembled and ready to drive.
But these hand-built cars take as long as four months to build and the market is so limited that Akins recently started exploring ways to diversify and grow the company. What's more, sales fell 80% as customers pulled back on these specialty cars that cost as much $110,000.
Just down the road in St. Petersburg, Bourgeois was wondering how he could expand his solar-panel business called Techno-Solis. Akins and Bourgeois met through the small web of manufacturers in Pinellas County and started talking about how to collaborate.
It's the kind of economic development that happens naturally in business. “Everybody knows everybody else,” Bourgeois says.
Electric show
Speedster's venture into electric cars wasn't initially a new business strategy. “We wanted to do something that attracted attention at shows,” says Akins.
Antique-car shows are big business. Speedster exhibits its cars at the largest such show in Auburn, Ind., on Labor Day weekend. Other shows include Daytona Beach in March and November.
To stand out from the crowded field last year, Speedster fit a large electric motor capable of powering one of its cars to speeds exceeding 88 mph, equivalent to a V-6 gasoline engine. EVnetics' engineers designed a controller, the brain that allows the driver to speed up or slow down. The car has 14 batteries that allow it to travel up to 45 miles on a single charge. To date, Speedster has invested $250,000 in its electric car, a coffin-nose replica of a 1937 Cord.
In a departure from its antique replicas, Speedster is designing prototypes of electric cars that include a small utility vehicle for parks and recreation departments, a mid-sized SUV and a flashy sports car. Drivers would charge the car by plugging a power cord into a common wall socket. Akins estimates each car will cost $500,000 to develop.
The idea behind these electric cars is that they can be built with pre-molded parts in an assembly line. For example, it would take a couple of days to build the small utility vehicle.
Akins knows what he's talking about. Speedster has been building cars from scratch for decades, buying few parts from outside vendors to maintain quality. “We build most everything in house,” he says. “It's the only way to control it.”
Unlike larger manufacturers, Speedster is exempt from having to spend millions of dollars to comply with government regulations for safety and emissions because it builds fewer than 500 cars a year. What's more, Florida law allows Speedster to title a new car for the year it represents, not the year it was made. For example, if it builds a replica of a 1937 car today, the title will show the car is 73 years old. That's important because it doesn't have to comply with impossibly strict emissions standards for new cars established in states such as California.
Besides building cars, Speedster makes kits that lets auto aficionados build their own. The kits cost about $12,000, one-tenth the price of the same car Speedster can assemble in about four months.
Downturn forces new thinking
But in the last several years, fewer customers are buying pre-assembled cars because they're not spending money on such luxuries. During the boom years of 2004 and 2005, Speedster was building 45 to 50 cars a year and had stopped selling kits because its employees were so busy.
Now, Speedster builds about five cars a year and sells five to 10 kits. To bring it additional revenues, the company also restores old cars. Revenues have declined from between $4 million and $5 million annually during the boom to about $1 million today.
To remain profitable, Speedster cut its staff in 2008 and moved to a smaller facility. Except for two cars, the company has no inventory and builds cars only when a customer orders one.
The Akins family has been through this before in the company's 30 years in business. “We know how to cut back, we know how to survive,” Akins says in a matter-of-fact tone. “Overhead is the killer.”
Meanwhile, Bourgeois is funding development of electric-motor controllers with profits from his solar-panel business. “I'm really not good at asking for money,” Bourgeois jokes. “Luckily for me, I've surrounded myself with excitement.”
Bourgeois, who has two engineers working on the project, says he has invested a couple hundred thousand dollars on the controllers and Speedster allows him to test the technology on new cars. “We couldn't dream to build a car as nice as they build them,” he says.
Akins and Bourgeois say they're not worried that large automakers will overtake them. “Now the market is so big that there's a lot of room,” Akins says.
What's more, the technology is still so new that small companies like EVnetics could corner the market. “There's no technology available to the level of power we're looking at doing,” Bourgeois says. “What we're developing now is a whole new line of products.”
Watch out, Detroit. Here comes Florida.
Jean Gruss covers the Lee-Collier region. He can be reached at [email protected], or at 239-415-4422.
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