Speaking at a press conference held in Rome Wednesday, Winkelmann said, “This is a proud moment for everybody in Lamborghini. The introduction of a third model line endorses the stable and sustainable growth of the company and signifies for us the beginning of a new era.”
Automobili Lamborghini first unveiled the Lamborghini Urus sport-utility vehicle concept with a preview at a Volkswagen AG event in Beijing, in April 2012. But the automaker announced Wednesday for the first time details of its production plans.
According to The Wall Street Journal, the decision to go into production was taken after issues of cost and design were resolved through negotiations between Lamborghini, the Italian government and trade unions.
Lamborghini was able to obtain concessions – such as tax breaks – it needed to get approval from its parent company Audi – a subsidiary of Volkswagen AG – to build the car at its main plant in Sant’Agata Bolognese in Italy.
Audi acquired Lamborghini in 1998.
The Italian government awarded Lamborghini more than 80 million euros (about $87 million) in tax breaks and incentives, Motor Authority reports.
Decision to go ahead with the plan to produce the car was delayed since 2012 when the company first unveiled the Urus sport-utility vehicle concept, due to uncertainties about the global economy and ongoing negotiations with the Italian government and trade unions.
Lamborghini’s target markets for the new vehicle are the U.S., China, Middle East, the U.K., Germany and Russia, according to Fortune.
Lamborghini says it plans to produce about 3,000 SUVs in 2018. This will more than double the car maker’s total output of 2,530 vehicles last year.
To meet the production plan, the company plans to expand its facility at Sant’Agata Bolognese, Italy – including production line, warehousing and R&D department – from 80,000 square meters to about 150,000 square meters and add 500 new employees.
But while the new SUV will be assembled in Sant’Agata, most of the components will come from other Volkswagen factories around the world, including the group’s factory in Bratislava, Slovakia.
The new Lamborghini SUV will not be the company’s first. Lamborghini produced the LM002 – dubbed “Rambo Lambo” – in 1986, as part of efforts to secure a military contract to produce Hummer-like vehicles. Production of the vehicle was short-lived due to poor market acceptance as a result of poor fuel economy and other business-related issues, according to ABC News.
But the U.S. military found use for the LM002 in a car bomb experiment when it blew up a model belonging to Uday, Saddam Hussein’s son.
Matt DeLorenzo, managing editor for Kelley Blue Book, told ABC News, “The Lamborghini SUV is a big deal because it marks the Italian automaker’s return to this segment since the long-ago departed LM002, which was more like a Hummer than the luxury SUVs we see today.”
Although, Lamborghini has not indicated a price range for the SUV, DeLorenzo believes it will be in the range of $200,000 or higher.
Lamborghini’s latest move positions it to fight for a share of the global growth in the luxury utility automobiles market. Major luxury car makers are scrambling for a share of the high-end SUV market.
Sports-car makers, such as Porsche, have ventured successfully into the market. Porsche now has two SUVs, the Cayenne and the Macan, and currently sells more SUVs than traditional sport cars, WSJ notes.
Akshay Anand, analyst for Kelley Blue Book, said the Lamborghini SUV will help the company to command customer loyalty because customers who want an SUV won’t have to go elsewhere for one.
“Loyalty is extremely important to automakers, and SUVs are critical for all brands to maintain loyalty as world markets continue to shift towards SUVs. Other exotic car companies have announced or will announce SUVs, and Lamborghini was certainly going to be a part of this wave.”
Bentley and Rolls-Royce have also announced plans to begin production of luxury SUVs; Bentley, later this years.
