McLaren bets on first SUV, new factory and £500 million UK investment for next growth phase

McLaren is preparing for its biggest expansion in years, with the British supercar manufacturer developing its first SUV and planning a £500 million investment across its UK operations. The strategy is aimed at expanding the brand's customer base, increasing production scale and moving the company closer to the profit margins achieved by rivals such as Ferrari.

SUV changes McLaren's formula

Unlike McLaren's existing line-up of supercars and grand tourers, the upcoming SUV will target a much broader luxury market. The company has not revealed its name, specifications or launch timeline, but CEO Nick Collins said the model would still follow the brand's established approach.

"We'll do it very much in a McLaren way," Collins said of the SUV. "It will bring something unique to the segment, which we think the customers will value."

The move reflects the growing importance of SUVs in the performance-luxury market. Lamborghini has used the Urus to expand sales, while Bentley's Bentayga has become its biggest-selling model. Ferrari has also entered the category with the limited-production Purosangue.

For McLaren, adding an SUV is expected to be the starting point for a wider expansion of its portfolio. Chief Operating Officer Michael Straughan said increasing volumes would also help the company lower material costs.

£500 million expansion in Britain

The product push will be backed by £500 million of investment in McLaren's British manufacturing and engineering facilities. The plan includes a new assembly plant, alongside in-house development and production of engines and transmissions.

McLaren expects the programme to generate about 1,000 direct and indirect jobs by 2032.

"McLaren Automotive is doubling down on Britain," UK Prime Minister Andy Burnham said in a statement.

The investment is supported by McLaren's ownership structure following its restructuring. Abu Dhabi-based CYVN Holdings acquired the automotive business last year, while L'IMAD became its main shareholder. L'IMAD has committed £1.5 billion to McLaren over the next five years.

Building after a difficult year

The expansion comes after McLaren sharply reduced production and dealer inventory during its restructuring. It dropped one of the two shifts at its Woking assembly facility and changed to an order-led manufacturing approach intended to reduce discounting and support residual values.

That transition contributed to sales falling to around 2,000 cars in 2025, from just under 3,300 units in 2024.

McLaren has remained loss-making, but Straughan said the company believes its margins can eventually reach the level of leading luxury performance manufacturers. "We can equal the best, but we've got a long way to go," he averred.

Electric cars not a priority yet

McLaren is also taking a different approach to electrification for now. While Ferrari has introduced a fully electric model, the British manufacturer says it will not pursue an EV until its customers show sufficient demand. "We will do an electric vehicle when our customers ask us for one," he said. "And they're not asking."

(With inputs from Reuters)

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