Daimler to spend $1b on stake in McLaren

By Bob Pearce

DaimlerChrysler, the world's fifthlargest car maker, plans to spend close to $1 billion for a share of a business spawned in a Remuera garage.

The German company is expected to pay $US465 million for a 40 per cent stake in the Tag McLaren Group, which has mushroomed from the small company New Zealand racing driver Bruce McLaren set up in 1963 to produce cars of his own design.

Since then it has grown into one of the most successful Formula One racing car manufacturers, with more than 100 grand prix successes to its credit.

Some of the first racing cars designed and built by Bruce McLaren Motor Racing were sportscars for the CanAm series in the United States. The McLaren Group has also built racing sportscars and an exotic road car, the McLaren F1.

Now DaimlerChrysler wants to use McLaren expertise to develop its own line of Mercedes sportscars to go on sale in 2003.

DaimlerChrysler told the Sunday Telegraph in London it had an option only to buy the 40 per cent stake and the terms of the purchase would only be disclosed when all details had been completed.

"This is another element of our strategy to enhance products and differentiate the Mercedes-Benz brand in an increasingly competitive market," said chief executive Juergen Schrempp.

The two companies have been Formula One racing partners since 1995, when Mercedes started supplying engines for the McLaren cars.

Bruce McLaren's interest in cars developed in the family service station in the Upland Road shopping centre in Remuera in the 1950s. His first racing car was a 1928 Ulster Austin Seven, bought for sterling 110.

He graduated through the ranks in New Zealand and then in Europe and when at the age of 22 he won the United States Grand Prix in a Cooper-Climax, he was the youngest driver to have won a Grand Prix.

He combined driving with input into the design of the cars and in 1964 he set up his own company with his wife, Patty, and fellow Kiwi, journalist Eion Young. The New Zealand complement was always high with drivers Denny Hulme and Chris Amon later joining the ranks.

In 1968, McLaren won the Belgian Grand Prix in a McLaren M7A of his own design and Hulme won the Italian and Canadian Grand Prix in the other team car. Even more spectacular was their success in the CanAm sportscar series where McLaren and Hulme reigned supreme from 1967-69 in their spectacular orange cars.

After McLaren was killed in a testing accident at Goodwood in 1970, the company continued successfully under the management of Phil Kerr and Teddy Mayer. In 1980, Marlboro engineered a buyout which led to control for the current supremo, Ron Dennis.