An entrepreneur started the Morgan company in 1909. The same spirit is needed today, writes Jonathan Moules
Amid the trophies and framed motor racing photographs tacked to the walls of Charles Morgan's cramped office is a small Union Jack flag and a bumper sticker with the motto: "First and last of the real sports cars."
The Morgan Motor Company has been making its iconic vehicles in the Malvern Hills since 1909, when Henry Frederick Stanley Morgan built a three-wheel runabout in his village garage. "It was the iPod of its day," says Mr Morgan, the founder's grandson.
The challenges facing Morgan and its four-seater sports cars today are not that different to those facing the founder, Mr Morgan adds. "Essentially, as a small business in a niche, what we have got to do is offer something different as well as relevant and reliable."
Morgan is competing in a very different car market to that in which it started.
Small production-run cars are money pits, not least because of the costs needed to satisfy government safety standards and develop new models to maintain sales.
Bugatti, the French supercar manufacturer, this week warned that it could be driven out of business if it is forced to comply with the latest US requirement for airbags that can differentiate between adults and children.
Morgan exports 70 per cent of its cars, many of them to the US. But the company is hopeful that it will get a three-year exemption on the "smart" airbag rules, giving it enough time to come up with a relatively inexpensive solution or copy whatever the rest of the industry devises, according to Matthew Parkin, sales director.
"You have got to pay for the legal guys," he says, noting that close to 5 per cent of the company's €26 million turnover is spent on ensuring that the cars meet legislative requirements and development costs. "We do not do profits," Mr Parkin adds. "If that money wasn't spent we wouldn't exist."
The fact that the family is still willing not just to manage but also to bankroll the business is critical.
Most of the great British car marques have either disappeared or been swallowed up by foreign manufacturers. This is partly because of the cost of safety standards, but is also due to the expensive and risky business of new model development, according to Mr Parkin.
"One reason we are still here is that we have never attempted to make our own engine," he says.
The Morgan Roadster is powered by a 3 litre V6 motor also found in a Ford Mondeo ST220. BMW supplied Morgan with its latest design software giving it instant access to engine specification changes by the German carmaker.
"We have got the latest generation ABS braking system developed by Bosch, BMW and ourselves," Mr Parkin boasts as he points out the technology on a half-finished Morgan 4/4 chassis resting on wooden trestles.
"Bosch sent us the stopping times and they were better than a Ferrari."
Mr Parkin is defensive about the state of Britain's car industry. Although Morgan uses parts from foreign-owned car companies, most items are built by local parts manufacturers, he notes.
"We offer a product that couldn't be more British. We use BMW engines, but they are made at Hams Hall just outside Birmingham."
Morgan faces other challenges, such as raising the number of repeat purchases of its cars.
When Mr Parkin joined the company nine years ago, 80 per cent of Morgan customers were first-time buyers. At most car manufacturers, this was the percentage of customers that returned to acquire a second.
"Our customers are unique in that they form a relationship with their car in the way other people would do with a pet," Mr Parkin says. "Asking them to replace their Morgan would be like asking them to upgrade their dog."
By developing new models and tweaking some of its classic designs Morgan has been able to encourage many customers to buy a second vehicle. Now repeat purchases are 50 per cent of total sales.
New models in the pipeline include a limited edition AeroMax Coupé, costing £94,000, in time for Morgan's centenary celebrations in 2009, and a zero emission car developed with Qinetiq, the defence technology supplier.
Charles Morgan says the key challenge for his family's business in the future will be to keep producing unique cars that combine a classic look with new technology.
"When grandfather started, the business was completely entrepreneurial. We still need to be like that today."