David and Goliath: Ariel Motor Company has succeeded by staying small
Ariel Motor Company is a small business that has a big impact. The company’s legendary cars have outperformed Ferraris and Lamborghinis, despite costing a fraction of the price.
Founded in 2000, Ariel adopted the name of a British engineering company that built the world’s first bicycle and went on to innovate historic cars and motorcycles.
Ariel’s flagship car, the Atom, shot to fame in 2004 when it gave Jeremy Clarkson a “facelift” on Top Gear. It then went unbeaten around the show’s test track for two years.
Staying small is integral to Ariel’s ethos. Operating from humble premises in Somerset, the family business has 35 employees and builds just 120 cars every year. The waiting list for an Ariel car or motorcycle currently stands at two years, however its customers are more than happy to wait.
In the latest episode of It’s The Small Things, we spoke to founder and director Simon Saunders about his engineering process, the benefits of a small team and the importance of good relationships in business.
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An artisanal approach to engineering
What marks Ariel out from other car manufacturers is its artisanal approach to engineering. There are no production lines or robots at the company’s factory; each car is hand-built by one engineer from start to finish.
Simon admits that it’s not the most efficient way to build cars, but it does have its advantages. Firstly, customers can watch their car being built, something that would be impossible on a production line. Secondly, every car is unique and the engineer has their name embossed on the completed vehicle.
The same person is responsible for the car right up until the time the customer takes it home. It’s something that’s become essential to the Ariel experience and ethos.
“It's not just about producing something as efficiently and quickly as possible. Part of that is down to quality, because we want to keep our guys interested, and part of that is because the customers enjoy being able to come here and see their cars being made, which you couldn't do in a Nissan factory,” he said.
“If we had a time-and-motion chap here with a clipboard, he would be in tears fairly quickly because there would be more efficient ways of doing it. But actually, the way we do it has a lot of positives, both for the guys working here and for our customers, which is the most important thing.”
Simon Saunders – Ariel Motor Company
Simon Saunders cut his automotive teeth as a designer for Porsche, Aston Martin and GM
The perks of staying small
Ariel’s approach to growth is to be big or be small, but avoid the middle ground in between.
The company builds around 120 vehicles every year, which is roughly what Honda produces every 20 minutes. However, staying small has its perks. Not only does it enable the company to create bespoke cars, offer a personalised experience and pivot easily, but it provides stability.
“There are things that we can do as a very small company that the big boys can't. There are obviously things the big boys can do that we couldn't even dream of. I tend to think the worst place is to be somewhere in the middle, where you're no longer small enough to be small, but you're not big enough to be big,” Simon said.
With Ariel’s vehicles in demand, people have advised the business to raise its prices or scale up production.
However, Simon has seen many businesses scale up to meet demand only for the demand to fall away, leading to cutbacks and redundancies. Plus, a long waiting list ensures that Ariel vehicles hold their value.
“It's not a business that we want to grow and grow. Our optimum size is probably bigger than we are, particularly if we're introducing other vehicles, but not a whole lot bigger. It will allow us, for instance, to move into new premises and then my hope would be to never ever move again.”
Simon Saunders – Ariel Motor Company
Customers are able to visit the workshop to see their car or bike being built
The power of good relationships
Simon takes relationships seriously at Ariel and treating suppliers, employees and customers as friends has always served the business well.
With regards to suppliers, Simon pays everybody on time religiously. And while the company could save money by shopping around, he believes it’s worth paying a little extra to deal with people he trusts.
Ariel also has a low staff turnover, which Simon hopes is a good indicator that people are happy working there.
“There's a lot of pride in the work, especially with the fact that there's one guy building a car and he has to sign it off. If he's not happy with it, he'll redo the bit he's not happy with. They're not under pressure. In other dealers, you get an hour and a quarter to change a clutch and you’d probably get shouted out if you don't achieve your hour and a quarter. They don't have that sort of pressure here,” he said.
When it comes to selling to customers, Simon describes the Ariel team as “probably the worst car salesmen in the world”. Rather than focusing on the upsell, the team typically talks customers out of upgrades such as superchargers if they don’t think it's right.
“Our ambition is to make sure that the customer gets the car that's right for them. We're not looking at the bottom line and thinking, ‘Oh, we can sell this guy this and sell him that’. We actually want the customer to be happy with their car.”
Simon Saunders – Ariel Motor Company
New product development has included a motorbike, seen here with its Ace model
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website: https://www.arielmotor.co.uk/
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location: South West (England)
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business type: Manufacturing
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business size: 10-49
Top takeaways
When it comes to business size, aim to be big or be small. The middle ground can be a tough place to operate.
Nurturing good relationships with customers, suppliers and employees will pay off in the long run.
Simon knows that Ariel could increase its efficiency, but it would risk compromising its unique, hand-built offering.