What price a turbo conversion?

[MattPerformance]

Ladies and Gentlemen
As many of you will know, Silverstone Performance is no more but many of its products live on - in particular, the very well received turbo kit.

Whilst the MR2ROC forum is not an exhaustive representation of the market, it seems pretty clear to me that most people here regard £5k as too much money for a kit.  That is not to say that people don't understand the value of this kit at £5k (it is, after all, exceptionally well engineered and developed, and proven) but it seems that this amount is just more than people are willing to spend – particularly once you factor in a clutch and some kind of exhaust upgrade (which is what most seem to want).  I also see a lot of second hand kits changing hands for sensible money so there is clearly demand.  The frustrating thing with some of the second hand kits out there is the problem of ECUs and remapping requirements plus the odd mechanical gremlin that comes to light during installation – that is to say, all too often the £2500 kit ends up costing more than £3k, plus the cost of installing it.  Now that's not soooo far away from where I think it might be possible to get the cost of a new SP kit.

The kit is now available in three forms (retail prices incl 2010 VAT in brackets):

1)   Low output (+/- 190bhp) T25 turbo, piggy back ECU (stock clutch compliant) (£5030)
2)   High output (+/- 235bhp) T25 turbo, piggy back ECU, electronic boost control (£5280)
3)    Stage II (+/- 265bhp-330bhp) T28 turbo, chargecooler, standalone ECU (£7530)

In each case the kit effectively comprises a hardware kit of mechanical parts, uprated injectors and an ECU reprogramming solution.  Then there is installation and optional upgrade parts (notably clutch and exhaust).

The only real difference between 1) and 2) is that 2) needs a high flow back box and clutch upgrade and the boost control solenoid – the actual kit and injectors are otherwise the same and so the price is much the same.  Option 3) is far more complicated however with a vastly more expensive ECU and air cooling system (which takes a lot more time to install).  The standalone ECU is also more expensive to map.

I also recognise that engine swaps (2zz, V6...) are very desirable and competitively priced however the absolute performance gains are not so great and the installations are not reversible (in the same sense) and so do not have the intrinsic resale value of a turbo kit.  SH turbo kits generally fetch £2k-£3k so you'll always have that to offset the initial investment.

Anecdotally speaking, most seem very interested in a significant increase in power on their '2 but very few go this far.  And yet, many spend much time and money pursuing N/A tuning with varying degrees of success which have little intrinsic resale value and the same downsides regarding insurance and saleability (i.e. selling "modified" cars is difficult).  This process can be approached piecemeal though breaking the financial investment into bite size chunks.  So is finance the issue and would a finance deal on a turbo kit be viable?

I believe that everyone who has experience of the SP kit has a very high regard for it but simply shaving a few quid off the retail is not going to be enough to get more people to take the plunge!  So what price would people realistically pay, and what compromises (compared with the current "one stop shop" full warranty etc.) would they accept to get to that price?

Note to Moderators: Whilst this post is clearly aimed at promoting a product which I market, I believe the opinions/ advice that I am canvassing are in the interests of the members and equally relevant to the market as a whole.    s:) s:)

[aglassinthesink]

well personally i would be more tempted to go down the turbo road if finance was available on it. if i had £5,000 in my account i'd buy another motorbike instead (burning a hole in my pocket). the only real thing i wouldn't like is paying the £5,000 out in 1 go. i don't doubt that the kit is good value as i know the amount of work that goes into them but at the same time £5,000 for a modification to a car that isn't worth much more than that is a little steep IMO. i'd probably be more tempted to wait for a 2nd hand one to pop up on here.

another factor for me is insurance. Being under 25 my insurance is already ludicrously steep, chuck a turbo in the mixer and it would make the car almost impossible for me to run financially. i'm not ruling the turbo out as i love my car to bits and i have been teasing myself with glympses at 2zz and turbo options but it would be at least a year down the line

[markiii]

you know that you can go straight to teh finance company for finance on pretty much anything don't you?

[stargazer30]

Matt,

I'd focus on driving out the cost on the 190bhp kit (PS why is it 190bhp, mine made 200bhp on low boost  s8) s8) )  That way no need to change the clutch assuming its not already worn, and no extra costs for sports cats etc..  Plus the low boost/200bhp still keeps the very linear delivery that suits the roadster so well.

Potentially save some cost by keeping the stock air intake maybe?  I recon that could flow enough for 200bhp.

Price wise, if you were doing a starter kit for £3500 I recon people would be queueing up!

Also as insurance has been mentioned as a concern, the less aftermarket bits the better.  In my case the insurance would have been a fair bit cheaper without larger injectors (sky loaded the premium the same amount for the injectors as the turbo!), again if the 200bhp solution would run on stock injectors its a double win.

David

[aglassinthesink]

you know that you can go straight to the finance company for finance on pretty much anything don't you?

a loan was my plan all along  s;) s;)

i was just thinking that having pre-arranged finance set up there and then (ie i just turn up and sign a piece of paper) would be quite appealing as it's an easy option: turn up, sign a piece of paper, get a turbo

[manchestermatt1986]

I'm kinda in the same boat as Paul here. Im 24 and spent so much on te car already it stand me at miles more than I'll ever get bk. And being under 25 insurance is a problem. Iv pesterd quiet a few ppl on here already about 2zz n v6 n turbos, iv even nearly sold the two to buy an s2000 because I just want the speed to go with the looks. But to cough up 5000 is alot in one go, and then especially to cough up that for what looks like the start of the turbos, if your going to do it, do it properly, some people would say. N 7000 is nearly what I paid for the car. N as much as I love the two, can I really justify living with my parents n sacrificing so much to have a mr2 standing me at close to £16,000 on the drive??   s:roll: :roll: s:roll:  

But yes I want the 2 turbo'd   s:) s:)

[Goeman]

I think David (stargazer) has pretty much summed it up. Option 1 needs to be a cheaper entry level kit because option 2 almost makes option 1 redundant. If you're willing to pay £5k you're probably willing to pay that bit extra for the clutch and probably have the exhaust already.

Is there any part of the option 1 kit that it could live without?

I'm working on handling at the moment but I'm going to get to the stage where that's done and I'll want the power to match. I will and am struggling to justify spending £5k.

[markiii]

you really dont want to run boost through the stock rubber intake pipes

[kentsmudger]

The problem is not the price of the kit, it is the price of the cars. I suspect sales are just going to be slow because you are aiming at a tiny segment of the market. The car was not a massive seller, I can go for a week or so without seeing another. It is no longer made and so those out there are only getting older and cheaper so will be being bought by people with much smaller budgets. Only a small percentage of owners even know there is an option to add a turbo, let alone get interested enough in doing that to find that your company supplies them.

As an example -  A quick trawl through the Autotrader suggests that my '02 car could well be worth less than £3000 (and, having had it 3 years, I have lost £5000 in depreciation and spent another £1500 on mods.). Even believing, as I do, that yours is a very well sorted conversion, and often tempted by the lure of more power, I cannot justify spending another £5000 on a £3000 car.



So, I am enthusiastic about the car, know about the turbo kit, quite like the idea of fitting one and believe yours is the best, but still won't be buying one. I am very close to fulfilling all the criteria of your ideal customer, but still cannot justify it.

Keep plugging away pitching to all the branches of the community and if your product is as good as I hear, then there will be sales - But not many, I am afraid.

[FGrob]

I must admit when I saw Matt's kit at Anglesey, it was very impressive, although I never actually went in it   s:wink: :wink: s:wink:  

I've certainly considered the turbo route for a few years now, but to be honest the price as always been the pull back, even more so now you take into account the actual values of the car - has Kent's said, the 2 is no spring chicken, with some pretty rock bottom prices and that's whats attracts a lot of people to the car.

You see second hand kits floating about on a fairly regular basis and these sometimes take time to sell, even at £2k, so £5K is going to be very difficult, on top of that you have the PE kit which is about half the price - again does the job as several people will certainly confirm.

But I think some people have already realised that simply just bolting on a turbo can be a dangerous thing to do, you really do need to consider better suspension, bracing and braking mods - which again adds to the cost, OK up-grade your clutch but that's not going to get you round a bend or stop you when you've over done it and of course don't forget your tyres.  

I think this last part is the most important, once you start up-grading / modding it has a knock on affect in other areas, so you £5K turbo becomes a £8 - £9 K mod, which puts you in TVR / S2000 / Lotus areas.

Any way just my thoughts - it's taken me 5  1/2 years to get the car where I want it so costs have never been to bad, the biggest outlay for me was / is suspension.

Sorry for being negitive about this Matt - but you did ask.

Rob

[Wabbitkilla]

At the same time we are seeing new interest in the car from the MK2 gang.
Now they are interested in Turbos as it's what they're used to .. and certainly the MK2 makes more power than the basic MK3 - at the same time they're realising in the MK3 you don't need massive power. So like body kits I see an improving market for the Turbo kits, maybe it is the right time for more to be available.

However having said that, the MK2 guys have been put off for some time by the cost of the MK3 and the car is now getting within the range they want to spend. I think the cost is crucial if you're going to attract buyers, there is a growing market but it's only just beginning. I've seen this kit myself and love the efficiency of the design, but it had tough competition with the PE kit at that price. But the PE kit does need charge cooling and a better ECU adding to it to get the best out of it, so will probably end up at a similar price when that is achieved. These are things you can do in stages though to reduce the cost and I think one thing all the kit manufacturers are missing a trick on is making the kits available in parts allowing buyers to use their own after market ecu's etc.

I know though that you're selling the complete kit as a fully tested and supported package - you can give guarantees about its reliability that way.

I certainly come back to considering a turbo on occasion, but would rather have a GT Garrett than the T series - again more expensive but probably the better unit.

Just my thoughts Matt ... you have a market but it's only just beginning.

[MattPerformance]

Thanks for the feedback and please keep it coming!
My initial reaction to the comments so far:

Offering finance is an idea I have played around with before, but there's a lot of hoops to jump through for me to be able to do this so I need to be sure it's a worthwhile investment.

I accept Rob's comments about the "rest of the car" upgrades when you go turbo.  I don't think it's a negative notion but I'd mention this:  on later cars, the chassis is so much improved that it is perfectly capable of handling even 235bhp unmodified.  Earlier cars need some help with bracing and possibly suspension refreshing and ideally wider rear tyres but they're a bit lighter so go even better!  Also bear in mind that the typical car owner who would go down the turbo route is already predisposed to carry out mods to their cars so may well already have bracing, suspension, exhaust, wheels etc.
As for the PE kit as a competitor, is it really a significant player?  How many people have them?  The SP kit is considerably more expensive than the PE, and so was the TTE kit before it and yet between them they have massively outsold the PE as I understand it, so I'm not convinced the price is the only issue (accepting that many of the TTE sales took place a while back when the cars were worth more).  That said, price will always be an important factor.

I also see that the current value of the cars is a big factor, although I do see it a slightly different way.  If you've got a nearly new '2 then spending a several £k on modifying it can make a lot of sense.  If on the other hand you want to achieve a certain type of sports car (e.g. Lotus type handling, MR2 type running costs/ reliability, TVR-esque performance) then a £2k-£3k MR2 Roadster is a great place to start.  Think of it like a kit car approach.  The crucial thing is to get the pricing right.  The slightly frustrating thing for me is that when you start with the MR2 "donor" car, the only thing that has massive potential improvement is the engine performance!  Everything else is already very good.  Sure, suspension can be improved.  But £1200+ for some top-line suspension is a lot of money, and the improvements are relatively subtle.  Stock brakes are well up to the job (but if you go for a serious upgrade for track work you're into £1500+ for 'some' improvements).  Extra bracing, quickshifts, wheels/ tyres, exhausts... They all offer some improvements but the improvements are ACTUALLY quite small compared with the amount they cost, albeit that the amount is a sum that is manageable to most.  Whereas a substantial engine upgrade (such as a turbo) offers a massive improvement on a car that is already well sorted.  Not so many people here have expereince of running TVRs or Lotuses (I can't speak for VXs though) but I do, and they cost a fortune to run so when you say the words "well, by the time I've fitted a turbo to my '2, I might as well have bought a Lotus" think again!!  s:) s:)

I aslo come back to the crucial point that a large part of the intital investment for a turbo kit can be recovered when you sell it on.  Makes me wonder whether a buy back arrangement could work?

[loadswine]

I think part of the attraction of the "TTE" kit was the fitting and its warranty aspect, where ,for all but a few, the PE kit was DIY installed.
If you could sensibly offer the buy back idea, I think that may attract interest, as you've quite rightly pointed out the drawback ( if that's the right term   s:wink: :wink: s:wink:  ) of the engine conversion route. Many owners appear to want a return on their mods come resale time, whether that be realistic in market terms or not. The idea of a return on the turbo kit might appeal in that area.  I've always seen my 2 as an indulgence, not an investment, but its not a view shared by that many.
I wonder if the emphasis was shifted to a "kit" for self fitting would attract buyers. What do you reckon the prices would be then?

Personally I like the cars fitted with these kits, also the PE ( owned one for a year). Driveability was the big attraction.
Still remember the enjoyment of my demo lap round the Silverstone GP circuit in the rain in the SP car, Ace!!    s8) s8)

[markiii]

the PE kits biggest weakness is the fact that it has no engine management out of the box

the manual actually tells you to unplug the knock sensor to prevent the stock ecu getting its knickers in a knot

not a good idea

add a piggyback and tuning costs and thats the thick end of amother grand to do.

however the end result with nigh on 190bhp, no lag andd no intercooling is probably enough for most people.

the problem becomes when people inevitablly get the i have a turboi its easy ot get more power idea, just because there mates impreza can be tweaked for more power easily they think they can do teh same

trouble is if you start with a PE more power means, bigger injectors, better exhaust, chargecooling, and then you realise the stock turbo itself is too small

and round you go again

[ChrisGB]

To be clear, are the prices above fitted or hardware only?

Chris

[MattPerformance]

To be clear, are the prices above fitted or hardware only?

Chris

The prices I have quoted are all fitted prices with a full warranty.

That said, because I could potentially operate as a sole trader I could eliminate VAT on a big chunk of the price (certainly the labour, the "profit" and the cost of certain components that I source from small non-VAT registered suppliers).  The warranty cover could be reduced and the profit could be reduced a little.  Producing kits in much bigger numbers could also yield some significant cost savings but this is a BIG risk because of the outlay involved.

The main thrust at the moment for me is to try to identify what the market wants to pay (ignoring the obvious answer of "as little as possible"!) and then seeing what I can do to achieve that.

The "SP" kit was originally offered in kit form (without injectors or ECU), incl. intercooler and sports cat at around £3250.  I have never sold one like this.  I have sold one kit as a DIY kit with ECU and injectors and that went very well (there were a few teething problems with the instruction manual but that was all).  The complete DIY kit was around £4000 IIRC (not totally sure as I discontinued this option and my PC has crashed meanwhile so I lost a lot of data  s:( s:(  ).

[michaelasaunders]

Matt,

I'd focus on driving out the cost on the 190bhp kit

I agree with Stargazer, this to me is the option for the 2 owner that uses it for everyday use, but wants a bit more power. I think the key issues for this type of owner are:
1 - Reliability (Stressing the engine and other bits)
2 - Manageable power (Not too much so as to make the car scary to drive in all seasons)
3 - Running costs  (mpg and insurance) I am assuming mpg would be better than the other 2 options, plus cheaper insurance?

On the subject of finance, If I did not have the cash in the bank, the last thing I would be considering buying is a turbo kit. Its something I would only consider if I had a lot of surplus cash.

However, I am not considering a turbo yet, probably a few more years ownership and a newer engine... maybe then.

[ChrisGB]

I don't see enough differentiation between the stage 1 and 2 kits in terms of pricing. Much cleaner idea IMO is to make the pricing structure reflect the requirements of each kit.

So for the stage 1 on stock clutch and exhaust, maybe something around £4000 fitted and set up.

Stage 2 needs a clutch upgrade and other bits, so why offer it at £5280 when it wont work without the other bits? Add them into the cost as a complete package. You then get margin on the parts and the labour to fit them. The customer gets a transparent price, which is nice.

Stage 3 is again, a price for the basic kit, but it takes huge amounts more than stuffing fuel and air in to make reliable power at these levels and I would offer bespoke specifications with the price starting at whatever it costs to drive out with 265bhp sorted.

There are two areas to consider:

The potential market is small, the MR2 is not a hugely popular car in the UK and they stopped making them years ago. The price has dropped a lot and buyers coming from Mk2 tubbys are likely to be more in the DIY mould than the people who bought the TTE kit for their new or nearly new roadster.

Which brings us to the competition. PE kit is fine for a DIYer and can be had for just over £3000 in the UK. Add in a cheap piggyback and new injectors and that takes you to reasonable performance for around £4000. MRWs kit will appeal to people who want more power. This kit is actually a little cheaper than the PE kit, and includes an intercooler. Combined with an Emerald ECU, I see no reason why 250+ bhp is not possible on a stock engine for less than £5000. If you have a well built engine, this kit will run the bigger outputs too.

So while the SP kit is most likely the best engineered, developed and supported kit available in the UK, or anywhere else for that matter, the US market has a lot more roadsters, so can make the economies of scale needed to draw the cost down. This makes it attractive for UK DIYers to import the kits from there and fit them. For people who want drive in / out solutions, your proposed kits represent good value for money IMO, but the product is only worth what the market will pay for it.

The other big problem is that a lot of other cars have got cheaper too. The VX220 Turbo costs roughly what you could sell an MR2 for and add to it the cost of a stage 2 kit. Add in chassis upgrades on the MR2 and the better car argument makes a lot of sense to the buyer. Obviously the VX has its issues too, it is far less habitable than the MR2 and can cost a lot more to keep it running, but it is an option.

Hope this helps and wish you success.

Chris

[MattPerformance]

I don't see enough differentiation between the stage 1 and 2 kits in terms of pricing. Much cleaner idea IMO is to make the pricing structure reflect the requirements of each kit.

So for the stage 1 on stock clutch and exhaust, maybe something around £4000 fitted and set up.

I've done some work on this, see my next post...

Stage 2 needs a clutch upgrade and other bits, so why offer it at £5280 when it wont work without the other bits? Add them into the cost as a complete package. You then get margin on the parts and the labour to fit them. The customer gets a transparent price, which is nice.

Three reasons why it's without the other bits: 1) because some already have their clutch uprated, 2) because people want their own choice of exhaust (or want to stick with what they already have) and it's not possible for me to give options to meet every need and 3) to keep the published price down so as not to put people off!

Stage 3 is again, a price for the basic kit, but it takes huge amounts more than stuffing fuel and air in to make reliable power at these levels and I would offer bespoke specifications with the price starting at whatever it costs to drive out with 265bhp sorted.

The only reason the Stage 3 version exists is because some people have a long game and whilst it isn't the cheapest way to get to 265bhp (i.e. chargecooler and standalone ECU) it is futureproof up to 330 bhp with a built engine which makes it unique (off the shelf).  The reality of the "long game" principle is that most people don't know what their ultimate target is when they start out because it changes as they go along, but I'm sure pretty much everyone on here with 300+bhp didn't start out thinking that's what they would end up.  So give people a 265 package for a bit more than whatever else they could get 265bhp for but in the knowledge that they can go up if they want to.

I think, as people are already remarking, it's the circa 200bhpo package that most people would be aiming for so maybe this is the area that requires the most work in terms of repackaging.  So here goes...

[MattPerformance]

Based on a few changes to the existing package I can reduce the cost of the entry level package.  The changes are these:

Smaller (& cheaper) 400 cell cat in lieu of large 200 cell sports cat (which is obviously 235bhp capable)
Use stock injectors
6 month warranty on all parts
Full installation by me (allow two days) (£350 - can be deducted if doing DIY installation)
Plug and play map 190-200bhp

This would enable me to offer the kit at a TOTAL PRICE of £3600.00

To upgrade to 200 cell large sports cat would be a £150 option to at least make it a little bit future proof (to buy the sports cat pipe after the event is £400).

What do people think?

[Peter Wright]

Plug and play map 190-200bhp

Why do you need this as the PE kit reaches 195 bhp on stock ecu

[MattPerformance]

Plug and play map 190-200bhp

Why do you need this as the PE kit reaches 195 bhp on stock ecu

I'll invite comments on that statement as I wasn't aware that it did.

[aaronjb]

Plug and play map 190-200bhp

Why do you need this as the PE kit reaches 195 bhp on stock ecu

I'll invite comments on that statement as I wasn't aware that it did.

I think it's the difference between (IMHO) a bodge (PE) vs a proper job .. But yes, the PE can be run with the stock ECU - fuelling is achieved by fitting a rising rate FPR (presumably 1:1) by modifying the fuel tank and fuel delivery system, and then disconnecting the knock sensor to prevent the stock ECU retarding the timing and killing all the power.. it's certainly not a solution I'd want to be providing a warranty on..

[Peter Wright]

Why do you need this as the PE kit reaches 195 bhp on stock ecu

I'll invite comments on that statement as I wasn't aware that it did.

I think it's the difference between (IMHO) a bodge (PE) vs a proper job .. But yes, the PE can be run with the stock ECU - fuelling is achieved by fitting a rising rate FPR (presumably 1:1) by modifying the fuel tank and fuel delivery system, and then disconnecting the knock sensor to prevent the stock ECU retarding the timing and killing all the power.. it's certainly not a solution I'd want to be providing a warranty on..

They now advise you to keep the knock sensor connected !
But this is all above my head   s:? :? s:?

[markiii]

Exactly pe kit is generally very good but the duelling solution is a bodge

But then an emanage blue is a couple of hundred quid these days so IMHO there is no excuse for bodging it