Ferdinand’s Mexican Standoff

Herr Piëch, about that recent Lamborghini acquisition…. do you have a moment?

Lamboghini Latinoamerica Coatl.  (c) favcars.com

Desperate times sometimes call for desperate measures, but can result in unwise decisions. Lamborghini has never been a stranger to challenging episodes- the relatively young company having changed hands several times before eventually landing on safe ground within the VW group.

In 1995, Automobili Lamborghini was owned by MegaTech, an Indonesian company with (former Lotus CEO), Michael Kimberley at the helm. MegaTech had purchased Lamborghini from Chrysler for around 40 Million (USD) the year before but was having trouble making the enterprise profitable.

In august of 1995 a licensing contract was signed by Michael Kimberley and Robert Braner (then president of Lamborghini USA) with one Jorge Antonio Fernández García (better known in the automobile world as Joan Ferci), owner of the Mexican company Automóviles Lamborghini Latinoamérica S.A. de C.V. Ferci previously was a successful supplier of electronic equipment for Chrysler and later became Lamborghini’s representative for Mexico and Latin America.

Joan Ferci. (c) Gatsbyonline.com

The agreement allowed Automóviles Lamborghini Latinoamérica to sell merchandise with the Lamborghini trademark, but crucially also contained a clause giving Automóviles Lamborghini Latinoamérica the right to “carry on the promotion and worldwide sale of the vehicles which are manufactured or assembled with its own restyling within the Territory of the Mexican United States, and/ or Latinoamerica for a period of 99 years.”

Ferci comments in an interview: “South America and especially Mexico represented a market that was of little interest to Lamborghini at the time -in 1995 I had sold only 23 vehicles for them – so they agreed to grant me ownership of the trademark rights for Latin America for a period of 99 years“.

Initially Ferci limited his activities to various Lamborghini-branded merchandise, so the risky clause faded from memory. However, 1998 saw the Asian financial crisis wreak havoc among the businesses in the region and MegaTech was no exception. Luckily for them, Volkswagen Group was on a buying spree initiated by Ferdinand Piëch at the time. VW snapped up Lamborghini for a reported 110 Million (USD).

Now under German (Audi) ownership, efforts immediately commenced to make Lamborghini a serious and profitable player on all counts in the supercar field again – a potential rival for Ferrari.

Lamborghini Latinoamerica Logo

Not long after the deal was done, VW’s lawyers discovered to their horror the existence of the previously signed contract with Joan Ferci. Who wouldn’t have loved to be fly on the wall as the poor guy summoned to inform Ferdinand Piëch of this ‘minor setback’ walked into the Dark Lord of Ingolstadt’s office?

Unsurprisingly, Piëch was not amused but it appeared the contract was legally binding. Ferci’s Latin American operation may have been miniscule compared to the giant VW group, but even if something is small in stature it can still be a major irritant – as anyone who has ever tried to get some sleep in a room with one seemingly untraceable mosquito can confirm.

Things got really ugly -literally if the looks of Lamborghini Latinoamérica’s first automobile creation are taken into account – in 2000. For this was the year that Ferci introduced his first restyled Lamborghini (based on the Diablo) named Coatl. Mechanically, the V12 engine was given more power – 635 Bhp, allowing a claimed maximum speed of 385km/h. The bodywork was totally restyled with only the doors and glasshouse unaltered.

The result was of questionable taste at best and VW was appalled that this contraption legally carried the Lamborghini name. Lawyers were sent to discuss the matter with Ferci on neutral ground in New York but he refused to surrender his rights. The Coatl was not exactly a sales success; two were sold (one to Belgium and one to Germany) and the third one remains the property of Lamborghini Latinoamérica.

Ferci claims that shortly after he was forced to move his operations from Mexico to Argentina (and later Uruguay) because VW Group created
financial and political obstacles for his business by interfering in local government. No solid proof that this actually happened is provided however. More recently, Automóviles Lamborghini Latinoamérica presented the Alar- again based on the Diablo. Its looks are an improvement on the Coatl but even so, not nearly up to the standard that Piëch or anyone at VW Group would approve of.

In 2014 however a concept named Vision LA, styled by Japanese designer Daisuke Iguchi, looked much more in step with the current Lamborghini design language. It also was up to date technically as it was fully electric with a claimed total 1000 Bhp. At the 2016 Uruguay Auto Show the Vision LA was shown for the first and until now last time.

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Neither Lamborghini nor VW are prepared to openly discuss the matter, pointing to legal sensitivities. The latest is that a new lawsuit is in preparation by VW against Ferci and Automóviles Lamborghini Latinoamérica with the aim of bringing this strange and grotesque tale to a definitive conclusion – if only to appease Dr. Piëch’s restless spirit.

Editor’s note: Since the article was completed, the author discovered that the website of Automoviles Lamborghini Latinoamerica -which was among the sources consulted while preparing this article- is now offline and showing only a 404 error message – and rather curiously remains so at the time of going to press.

7 thoughts on “Ferdinand’s Mexican Standoff”

  1. Volkswagen seems to have had some problems with its trademark law department at that time.
    Remember the troubles they had after acquiring Rolls-Royce only to discover that BMW owned the name via its aero engine arm?
    They also had similar trouble after the acquisition of Bugatti whose name had licensed to all kinds of businesses and had to be bought back and where one clothing manufacturer stubbornly refused to have his trademark agreement terminated despite of being offered a sizeable sum by VW.

  2. You can imagine Piech’s displeasure on learning about this clause – and who can blame him?

    Financial difficulties or not, who on Earth signs a contract allowing a third party to design and build products of their own and pass them off under your brand?! Madness.

    1. Speaking of the wrath of Piëch, I was put in mind of a story told of former Irish premier, Charles J. Haughey in his 1980s pomp. Holding court in his top floor office at Leinster House (the seat of Irish government), he summons a junior minster for a dressing down over some misdemeanour or other. Having verbally eviscerated him, the hapless minister, groping for the exit, enters a utility closet by mistake. Still fumbling for the correct door, Haughey eyes him coldly, then growls; “try the window”…

  3. Fabulous story, Bruno. But you do realise that somewhere in deepest Europe not one but two of these, ahem, Lamborghini’s roam ? I’m hopeful they are still under a cloth in a lead lined basement and the caretaker has lost the key.
    Do you think the fellow who had to inform Piëch lost their job or given the most menial of positions in the furthest factory away? Don’t consider he’ll dine out on that story, even now

  4. The problem is that VW got it wrong yet again: they shouldn’t have tried to buy out the Latin-american gentleman from the Lamborghini name, but recruit him as a business partner. Hope that’s okay to say here, but F. Piëch probably haven’t even thought about partnering up with a Mexican due to his old-fashioned Übermensch-thinking (in the classic Volkswagen-ian way). Okay, these are ugly enough to make such a co-operation risky, but the rebadged VW 4×4 utility Lambo is ain’t much prettier either.

  5. Cracking story, and totally new to me. Knowing VW, there will have been a team of 200 working on nothing else for 20 years, plus a warehouse in Wolfsburg full of reams of documentation and racks of hard drives. VW has probably hired the BND to track down the three examples and ensure they are all obliterated.

    Naturally, it goes without saying I want one much more than a ‘real’ Lambo…

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