McLaren is set to enter the luxury SUV market with its first-ever SUV model as part of a broader strategy to boost sales and expand production in the United Kingdom. The British sports-car manufacturer, backed by a £500 million investment from its Abu Dhabi-based owner CYVN Holdings (now rebranded as L’imad), aims to leverage this new vehicle to reverse years of financial losses and grow its market presence.
The SUV, which is expected to be launched within the next few years, will feature a hybrid powertrain. While specific details about the model have not been disclosed, McLaren’s chief executive Nick Collins emphasized the significant market share SUVs command globally, particularly in the luxury segment. “There’s not a region that I can think of where the SUV hasn’t taken very significant market share,” Collins said.
Currently, McLaren produces all its cars at a factory in Woking, Surrey, which has a production capacity of roughly 3,000 vehicles per year. The company sells just over 2,000 cars annually—less than half its record 4,800 vehicles sold in 2018. To accommodate expected growth from the new SUV model, McLaren plans to build a second assembly plant in the UK, with Sheffield, home to its carbon-fibre manufacturing facility, reported as the favored site, though no final location decision has been made.
Michael Straughan, McLaren’s chief operating officer, described the SUV launch as a “critical” step for the company, with potential to double sales. He noted the model is intended to appeal to a broader customer base, including wealthy Formula One fans who may not currently own McLaren supercars. Straughan highlighted the SUV’s practicality, noting that two-seater sports cars can be limiting for families. The new vehicle is expected to compete with existing luxury SUVs such as the Bentley Bentayga, Aston Martin DBX, and Lamborghini Urus, all of which typically start above £200,000.
The push into the SUV market aligns McLaren with other European luxury carmakers including Ferrari, Lamborghini, Bentley, and Aston Martin, which have similarly diversified their offerings with high-end SUVs contributing to increased sales and profitability.
Despite the recent merger with the UK electric vehicle startup Forseven Holdings, McLaren does not currently plan to develop a fully electric vehicle. Collins stated that the company would consider an EV when customers demand it, but at present, “they’re not asking.” This approach comes amid UK government plans to mandate zero-emission vehicle sales by 2035.
The investment from CYVN Holdings follows its acquisition of McLaren Automotive from the Bahraini sovereign wealth fund Mumtalakat last year. CYVN has committed to investing $2 billion over five years to support McLaren’s turnaround, including in supply chain manufacturing such as engine and transmission development, carbon-fibre capabilities, and paint shop upgrades to meet growing personalization demands.
McLaren Automotive, founded as a road car producer in 2010 after decades of racing heritage, faces ongoing challenges including a drop in demand from the Chinese market, which has impacted many European luxury car manufacturers. Nonetheless, the company’s sister entity, McLaren Racing, has enjoyed recent success with two consecutive Formula One constructors’ championships.
The launch of the SUV and the planned factory expansion have been welcomed locally, with Greater Manchester Mayor Andy Burnham describing the investment as a sign that the company is “doubling down on Britain.” However, the growth of SUVs also raises concerns amid ongoing discussions about vehicle size increases and rooftop pedestrian safety risks associated with larger cars.