Sunday, January 21, 2018
Business

After Carroll Shelby's death, Shelby American still in fast lane

In the first two weeks after Carroll Shelby died, the phones at his Shelby American car company didn't ring once.

"And then when they finally did, we had people with urgency in their voices, asking if they were still going to get their cars," said John Luft, president of Shelby American, based in Las Vegas.

The short answer is absolutely. The company that Shelby founded 50 years ago to build specialty cars like Mustang GT350s and 427 Cobras is "planning for the next 50 years," Luft said.

"This is ground that had never been walked — life without Carroll," he said. "But Apple's not going anywhere, and Steve Jobs is no longer alive. We are focused on the next 50 years, not the last 50."

Shelby, a legendary racer who developed Shelby Mustangs and Cobras and was a lifelong entrepreneur, died in Dallas in May after a long illness. He was 89.

Shelby American is a subsidiary of Carroll Shelby International, a publicly held company that trades over the counter.

Even before Shelby's death, the company was in transition.

Although Shelby worked with longtime partner Ford to develop the Shelby GT500 Mustang, those cars were built in Ford factories and sold by Ford dealers.

Before the economic downturn, Ford had a program with Shelby American in which Ford sent thousands of Mustang GTs to Shelby American to be converted to Shelby GTs, sold at a healthy markup by Ford dealers.

After the market for specialty cars plummeted, the Shelby GT was discontinued. Shelby American still builds specialty Mustangs, but people have to buy cars first and then send them to Shelby to be converted into a GT350 or a Super Snake. Shelby additions can be $30,000 or more on top of the cost of the car.

The company continues to build the Shelby 1000, the last Mustang that Shelby helped develop. It's a $200,000 monster that can be ordered with more than 1,000 horsepower.

Luft is refocusing Shelby American on selling more parts to modify Mustangs, whether they are Shelbys or not.

Parts currently account for about 20 percent of revenue, and Luft wants to increase that to 50 percent within two years.

"The days of our building 7,000 cars a year are long over," he said. "Carroll always said forget the highs and lows. Identify your sweet spot, and right now, our sweet spot is 400 to 500 cars a year. And as we continue to develop the parts side, we may find that the sweet spot is 300 cars."

Automotive News recently reported that Shelby American expects earnings this year of about $2.5 million on sales of roughly $22 million.

"Shelby American was profitable last year and will be more profitable this year," Luft said.

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