(Bloomberg) -- Ferrari’s F430 Scuderia was about 60 years in the making. Larry Feherenbaker started tearing his apart in a matter of weeks.
Actually, he hired Ai Design to do it. A custom car shop near Manhattan, Ai installed a roll cage, a fire extinguishing system, downdraft plates, a wing, a new exhaust system, a new suspension and a custom-built nose. In the process, the so-called prancing stallion—shiny and plush off the assembly line—became a rangy, raw-boned creature that was relatively painful to ride.
“If you talk to some people, they’d say I ruined a good Scuderia,” says Feherenbaker, who, at 52, now runs a wine store in New York’s northern suburbs, having made his bones on Wall Street. “There’s no rational reason to do what I did. It was badass.”
There is a small fraternity of car nuts who think of a new vehicle as a starting point, rather than a finished product. The adage about taking care of expensive assets—how one doesn’t own them, one looks after them—doesn’t fly with this fat-pocketed crew. For them, owning a machine means changing it, making it weird, angry, opulent and personal—resale value be damned. And, of course, driving the sweaty devil out of it.
If you are a member of this mad club, sooner or later you will make your way to Ai Design, or one of a handful of shops like it around the world.
Tucked into a small industrial park about 20 miles north of New York City, Ai is hard to find. The sign is tiny on purpose; a potential customer who finds it by accident isn’t a customer Ai wants. The marketing plan, according to owner Matt Figliola, is simple: word of mouth.
Stepping inside is an exercise in covetous math, as a visitor’s brain scrambles to put a price tag on the cornucopia of carbon fiber. Here’s the rough tally from a random Friday in January: $250,000 (Mercedes G500 Brabus 4x4), $230,000 (Ferrari 458), $165,000 (Audi R8), $117,000 (Ford Shelby Raptor), $150,000 (two Cadillac Escalades) and $69,000 (Dodge Charger SRT Hellcat). The equation peters out at the lime-green hull of a 1970s GMC motor home (for a music festival promoter) and a 1969 Chevrolet Camaro pace car, both of which would have been difficult to price accurately.
It’s a Fast & Furious set come to life. As such, each of these rigs has soaked up far more money than the initial purchase.
The floors are hospital clean—probably cleaner. There’s no clutter, no tool out of place. Ringing the motley assemblage of car porn is a range of equipment one would never find in a typical auto shop: sewing machines for upholstery, table saws for making wooden frames, 3D printers and a refrigerator-sized unit for stretching and cutting leather into tiny strips. Ai sourced this from a defunct shoe factory, using it to cover the blades of air vents in suede and Alcantara.
Though Ai will do basically anything, it does have a few specialties—jobs that its regulars order up for every vehicle they buy. First, subject cars are wrapped in a protective film to guard the paint job from errant pebbles and reckless valets. Sound systems are gutted and upgraded, often with custom speaker housings that Ai produces from one of its 3D printers. Finally, there’s a state-of-the-art radar-detection system, which costs about $7,000 and, generally, pays for itself quickly.
“Honestly, I have to have it, man,” says Ai customer Kris Roglieri. “That system has gotten me out of at least $20,000 to $30,000 worth of tickets.” Roglieri, 42, is the founder of Prime Commercial Lending, which finances real estate deals that carry a high amount of risk. He recalls his first phone call with Ai; Figliola had him on the line for 90 minutes. “It wasn’t a sales pitch,” Roglieri says. “It was more of an education on things I didn’t think about.”
Another customer, Ephraim Rabin, is chief executive of Parchem, an industrial chemical supplier just outside of New York City. He says he likes Ai to custom-craft his mobile-phone holders—among other things. “When I buy a car, it either gets delivered straight to [Ai] or I drive it there directly,” he says.
But for those who want a full transformation, there’s the works, which Ai calls a “rotisserie restoration” because the car is affixed to a horizontal pole and picked at by mechanics as if it were a Costco chicken. The 1969 Camaro was near the end of this all-in treatment a few weeks ago—a process that took two years. Ai replaced the drivetrain, chassis and suspension while fully restoring the body. The final touch? Orange houndstooth upholstery and 3D printed door handles. Figliola wouldn’t say how much he was paid for the 2,000 hours of work.
As work finished up on the Camaro, a Cadillac Escalade was parked one bay over, its interior skinned of paneling to expose a sinewy network of wiring. In the center console, a fighter plane’s control stick jutted from where one would typically reach for a Big Gulp. The Ai crew put it there because they figured it would be the best option for controlling the $40,000 infrared camera gimbal mounted in the sunroof.
Why put it there? Because they could.
In the ecosystem of the auto industry, from leviathan manufacturers to scrappy dealers, Ai inhabits a tiny yet prosperous niche. It thrives on a rich, elusive class of customers that are hard to catch and harder to keep. What lures them is innovation. If you can imagine something on a vehicle, odds are Ai can put it there.
The traditional car world, by comparison, has a poor imagination. In a world of human exoskeletons and personal submarines, it’s still relatively difficult to spend seven figures on a vehicle. The fanciest machines are priced on par with starter homes, while the peak of the market—the steampunk spaceships launched by Bugatti—still wouldn’t bankroll beachfront property in the Hamptons.
But with cars, as in real estate, renovation budgets know no bounds. This is where Ai comes in.
“The basic math of it is, they can afford to have exactly what they want,” Figliola says. “People with wealth are very used to having something custom-made. This is something that they do with their bathroom, their garage, their desks. Why not do it to their car?”
Most auto shops survive on scale, churning through commodity repairs that don’t require savants under the hood or long conversations with picky customers. Meanwhile, even the fanciest automakers limit custom options to unique paint colors or parts and styling details that can be easily swapped. Last year, the average U.S. car dealer made a profit of about 3 percent on a new car and 13 percent on a used vehicle; Ai’s margin is well over 30 percent. It charges by the hour, not by the project, and those hours add up.
Ai’s most lucrative job was an Escalade; four of them to be precise. The client, a music executive of sorts, wanted perfect sound. He bought two Escalades for Ai to turn into research and development labs. When they finally built the perfect system—complete with a virtual private network and a user manual loaded onto seatback iPads—he bought two more Escalades for the final installation—one for each coast, of course.
All told, the project took more than 10,000 hours. When he talks about it, Figliola gets a little misty-eyed. In a life of tinkering, he considers it his highest achievement. The payout didn’t hurt either.
Picture a quick-witted, flashy street genius like the Tej Parker character played by Ludacris in the Fast & Furious franchise. Now imagine his exact opposite. That’s Figliola.
The 50-year-old master mechanic isn’t Hollywood—he’s East Coast gearhead. Figliola is a big, doughy dude with a thinning pony-tail and a bulky pair of clear-framed eyeglasses.
He owes his shop, and his livelihood, to a hinky train set his uncle gave him as a kid. The crummy gift catalyzed a life of tinkering that progressed from trains to radio-controlled planes to stereos and cars, in that order. Figliola’s formative years, when he got a glimpse of the life he wanted, were spent listening to Rush while cruising around in a Pontiac Sunbird.
Figliola did a semester in college and a few more months at technical school, mostly to humor his parents. As soon as he cobbled together enough money, he opened his own car stereo shop. This was 1992, when such a thing still existed.
In that first year, his crew put a television in a Land Rover seat-back (Figliola is adamant that this was the first time such a thing had been attempted). From there, the jobs got bigger, stranger and more lucrative. Along the way, he picked up new skills, such as welding and upholstering. He became obsessive about the tiniest details. “I was really good at what I did, so the success came easily,” he said.
Today, he runs a crew of 10 guys, almost all of them electrical savants. Some can code, though Ai generally refrains from doing that kind of tuning because it can void a warranty. “If you’re a straight-up wrench at a dealer, you’re not a good fit here, because you’re mentality is all about maintaining,” Figliola says. “Everyone’s mentality here is to put something there that’s never been there before.”
The average tenure at Ai is more than 10 years. When the recession hit, Figliola cut everyone’s salary by 20 percent and laid off the most junior worker; 15 months later, he hired him back and restored everyone’s pay.
Once Ai wins a customer’s trust, there’s rarely any need for a subsequent sales pitch, he says. Matt Kissner, former chief executive officer of John Wiley & Sons Inc., spent about $50,000 renovating a fairly ho-hum GMC Yukon (a vehicle that only costs about $50,000 to start with). First, he had Ai add a sound system, then a supercharger, which required bigger brakes, and finally a paint job and some suspension work.
“Every time I went back there and saw what he was doing, my appetite for more increased,” Kissner says. “When we were finished, it got about 8 miles to the gallon—but it was really something special.”
As electric motors and automated systems take over driving, Ai’s business model may prove the most resilient in a fast-changing auto industry. Vehicles will require less maintenance, and owners will care less about performance. But they might care more than ever about how their whips look—and what they’re like inside. When one no longer has to watch the road, the sound of the stereo and the feel of the seats will matter even more. The baller ride will have air vents sporting blades covered in tiny strips of suede cut by an old shoe-making machine.
Or maybe not. There’s a growing awareness among the upper-echelons of carmakers that there’s more of what economists call willingness-to-pay. Ferrari, for example, is expanding its “one-off” program, wherein it lets its best customers design their own vehicles. The client list includes Eric Clapton, who ordered a fully bespoke car built on the bones of a 458 Italia, which cost roughly 20 times as much as the stock version.
McLaren Automotive, not to be outdone, has a “Special Operations” unit with 100 workers that offer five levels of customization—from swapping out some parts with carbon-fiber to designing a fully unique vehicle. The service is open to older McLarens as well. “We’re meeting customer expectations almost without limits,” says Ansar Ali, managing director of the elite division.
Figliola isn’t worried. It’s hard for a global conglomerate to make money on 90-minute phone calls, but he can. “Car companies only think so far,” he says. “They’ll hit a wall, and that will be it.”
McLaren, for example, doesn’t offer radar-detection systems. And a fighter-plane control stick may be a stretch.
©2018 Bloomberg L.P.