RESIDUAL VALUES Insights & Opinions from Automotive Industry Leaders

Interview with Bruce Canepa

What’s your backstory? How long did you run your dad’s dealership? My dad was a car dealer, so it didn’t take me very long to get totally I ran it for 4 years. My dad had a typical passionate about cars. As a little kid, dealership, buying and selling new and I remember standing on the front used cars, and servicing them. I had my seat of his car – before cars had seat own passion and vision, and wanted to belts – and naming all the cars on the create a business in more specialized highway. Although I grew up in Santa fields. I had a taste of German cars “We’ve built a Cruz – a legendary surfing town – and based on trade-ins at his dealership, team based on did a little surfing, I was not a surfer. and after driving Porsches, Mercedes I played sports in high school, mostly and BMWs, realized there was a big craftsmanship as football, but my passion was cars, like difference in those cars compared to the performance all the time, and that’s never ended. American cars at that time; less so I had no problem with academics in today, but a lot back then. I wanted standard.” school; my conduct was the problem. I to expand the business and go in that was just kind of a crazy, wild kid. Riding direction, while dad was trying to slow my motorcycle in school or doing - Bruce Canepa down and do less. So I went out on my burnouts in the parking lot, I did all own in 1981, when I was 31 years old. Founder that stuff. Canepa Design My dad eventually sold his dealership Santa Cruz, California and retired, and lived to be 94 years Did you work at your dad’s old. dealership? What challenges did you face My dad let me work in his shop when I was about 12, and the first thing I did when you went out on your was sweep the floors. Then I got to own? wash cars, and then I got to detail cars, Initially, in the 80s and early 90s I had and then I learned how to do body and dealerships that sold Porsche, Audi, paint work, and then mechanical work. BMW, Lamborghini and Maserati I worked in every department, all the marques. None of those stores were way through sales, and then ultimately very profitable, and there were all ran his dealerships in my late 20s. kinds of issues to stay afloat. It wasn’t The lesson my dad taught me is that as much fun as when I had worked for you have to be patient to learn your my dad. It was less personalized, and trade from the bottom up, and that more of a commodity business. So, to succeed you need to have a strong in the early 90s, I changed direction work ethic. RESIDUAL VALUES Insights & Opinions from Automotive Industry Leaders again. I got out of the dealership take the time to do a job perfectly. I what’s involved, and why those business altogether and set up a don’t care about getting things done things take time. My standard advice company based exclusively on doing quickly. I want it done right. We’ve to clients is, “The last 10% of the job collector, exotic, historic race cars built a team based on craftsmanship is 50% of the work. So be patient.” sales, restoration, and custom design as the performance standard. projects. There was no model for How did you get started as a building this type of business, and You’re more than a serious race car driver? it had a lot of challenges. But we restoration shop. You create learned by trial and error. things as well. I was around 11 years old when I first drove a go-kart, and started How were you able to grow We create and re-create cars. For racing them in the alleys behind my such a different business example, we’ll take a 356 Porsche, parent’s house. My first real race model? and give it 170 horsepower instead took place when I was 15 years of 70, give it GT seats, wider wheels old, at Watsonville Speedway, a We grew through word of mouth, and better brakes. The fun part is quarter mile dirt track on the Santa based on the quality of our work. To that people are driving these cars; Cruz County Fairgrounds. I started this day, we either do things right, or not just putting them on a trailer to in a jalopy that was owned by the we don’t take the job. Our reputation put them on a lawn to show them. body shop manager at my dad’s grew fairly quickly, because people And they want them to be fun to dealership. It was a beautiful ‘58 all- knew that if I bought a car, it was drive. I tell people, “I don’t want black Ford, and I crashed and tore it going be as close to the best as my 356 Porsche to be blown off by all up on the first night. Over time, possible, and if I sold a car, it was a Prius. I want my 356 to beat that I started racing a sportsman car going to be even better. That’s the other guy’s Corvette.” which was a NASCAR-type car; then way we’ve always done things, and eventually drove super-modifieds we’ve built a whole business around What’s the secret to working when I was 19, and when I was 25 that concept. with some of the wealthiest I drove sprint cars, which were my and most demanding clients favorite cars to drive. How do you build and in the world? maintain a culture based on I went straight from a sprint car to craftsmanship? There’s a lot of different personalities, a 935 Porsche at the time, but the and most of them can buy probably cars were very similar. Sprint cars The most difficult task is finding anything they want; but they can’t were around 1,250 pounds and 800- qualified craftsmen. There are far buy time. So we try to be extremely plus horsepower when I drove them, fewer real craftsmen in the world productive, and that’s why we do and you’re basically sideways all today, and unfortunately, there’s everything in-house. I might have the time in that car, and not driving not enough trade schools teaching one guy working on the body, straight very often. You really learn people the various disciplines another guy working on interior the ultimate in car control, and how correctly. We hire people based on components, and another guy to manage your car with the throttle their experience and the references working on mechanical components all the time. I used to joke that the they bring. Most of our new hires at the same time. We don’t take a car steering wheel was just something to love what they do, have been doing and send it off to different specialty hang on to when you flip over, and it for at least 10 years, and are highly shops. That’s the key to managing you will flip over. I still believe it takes qualified journeymen. But I tell them these jobs. Our customers want their a professional grade driver to drive that they’re not going learn our stuff, and they want it right away; so a sprint car, and is as demanding as disciplines overnight. Everyone who I do spend a lot of time explaining any type of road racing. works in my shop knows they can RESIDUAL VALUES Insights & Opinions from Automotive Industry Leaders

Like all sprint car drivers, I had my Sounds like sprint cars for me. It was so much fun, I know share of flips and crashes and injuries. that Indianapolis was a place I would don’t get the respect they When you race that many races and have loved to have driven. deserve. that aggressively, you’re going to have some tumbles in those cars. But , , A. J. You hold a Pikes Peak record there’s something inside that allows driving a Kenworth Big Rig. Foyt, and all the racing legends went me to test the limits without tearing from sprint cars to Indy cars. If you everything up to do it. I was doing Kenworth’s design work, can win in a sprint car and drive one and the president of the company successfully, you can drive anything. Is there a race that you asked me if I would race their 1999 Sprint car races are intense, with 25- T2000 truck at Pikes Peak. We 30 cars driving wheel-to-wheel, with passed up, or didn’t have modified that truck so that it drove wet dirt and stuff flying around. It the opportunity to compete like a 13,000 pound sprint car. The takes incredible reflexes and mental in, that you regret? truck had almost 2,000 horsepower, discipline, everything, to go fast 4,300 pounds of torque, and got in those things. You’ve got to be I would’ve liked to have done the 24 up to 100 miles an hour pretty good to survive. When I moved from hour Le Mans, and was asked to do it quickly, which is pretty amazing sprint cars to a 935 Porsche, all of a on two occasions. The problem is that on a gravel road. I wanted to slide sudden, I had a car with a windscreen my business takes up a tremendous into Pikes Peak’s 156 corners, pick and visibility, I had brakes and no amount of my time. In the 70s, 80s, up the throttle and have it rotate dirt flying, and a pavement surface. 90s you could show up on a Thursday, like a sprint car does on dirt; then Sprint cars tend to drive with a lot do your practice, qualify, race and fly pick the throttle back up and keep of oversteer and drive fairly loose, home Sunday night. Then be back to going without having to nearly stop and they go real fast. I was already work on Monday. it at every corner. The first year up comfortable with all that, so for me, there, we took two minutes off the the 935 just seemed like a really Today, whatever the sport is, including record. If you’ve seen the video, I sophisticated sprint car. racing, it’s a full-time job now; not a part-time pursuit. If I really wanted to drove pretty much sideways all the way up the mountain. We still hold How do race car drivers deal do Le Mans, I would need a month to go to France, to get comfortable, the Big Rig Tandem Axle record for with fear? prepare my mind, and have nothing that race. Every driver has different levels of in the way of distractions. I would fear. They need to figure out how to not want to just participate; I would Your love affair with the 959 monitor it, so it doesn’t bite them. want to be successful. I don’t like Porsche is legendary. I’m totally comfortable in a car, and running anywhere but in the front. at high speed I’m really comfortable So I could not race in Le Mans simply I was fortunate to have access to and pretty relaxed. When things go by deciding to do it. a 959 in ‘87 when they were first wrong, there’s fear, but it typically produced and the car came to the occurs after the fact. If I were afraid, If I had the opportunity, I also would country on a tourist visa. I got to I don’t think I could drive, honestly. have done the Indy 500, because drive it for a year, and at the end Fear is probably always there I love speed. In 1982, I drove the of that year, Microsoft’s co-founder subconsciously, but only as kind of March 82G GTP car at Daytona with Paul Allen shipped it to his home a safety net to keep you from going and Jim Trueman. We in Europe. He told me, “Get one of too far. At the same time, if you’re an were going 225 – 239 miles per these 959s for Bill (Gates), because aggressive driver, then you’re always hour through the banking, driving this is a car he could drive.” I got testing the limits. as fast as that car could go, and a 959 for Bill Gates and the rest is there was nothing stressful about it history. RESIDUAL VALUES Insights & Opinions from Automotive Industry Leaders

We ended up with about a dozen we’re buying and rebuilding them in everything right. Every performance of them sitting in the foreign trade order to complete our plan to create aspect, whether it’s acceleration, zone in storage. Then we went a limited edition of 50 of these cars. shifting, turning, stopping, handling, through a long exercise trying it does all of them really well; not to figure out how to get them Do you have a daily driver? one or two of them, but all of them. legalized, because they’d never had There’s lots of companies building a crash test or emissions testing in Because of the way we do customer sports cars, but they started with the US. After a whole lot of trying cars, every car that comes into the what I call touring cars, trying to things and a little bit of luck, a rider shop – whether it’s a car that comes in make them into sports cars. Porsche on the Senate Transportation Bill in for work, or a car that we buy to sell – started with building sports cars, ‘98 made them legal to drive. I’m usually the first guy to drive it. I’ll there’s a big difference. make my first list of things, whether From that day forward, we’ve never there’s an air leak or a rattle; if it’s out Do you think electric cars are stopped developing that car, and of alignment; the headlights need the future? still have not found its limits. The adjustment; or the air conditioning 959 was 20-25 years ahead of its is not working properly. I’ll put 25 I don’t believe electric cars are time in terms of its suspension and miles on it and come back with my anything other than the political its all-wheel drive system and just list, then it’ll go in the shop, and go and cultural part of the future. everything it did as a car. Driving through another round of inspections There’ll be something a lot smarter it was magical. We had lots of room and servicing, as well as an elaborate than electric cars sooner than later. to grow the car, and we did. We quality control process and road I don’t believe the battery is a are now at nearly 850 horsepower testing. Then I’m the last guy in practical thing, and it’s dangerous today in our fourth generation of the car before it’s delivered to the to some level. It doesn’t allow you that car. And we’ve upgraded the customer. And so, almost every night, to build a car with a well-engineered suspension, brake systems, power I’m driving a different car. It could be structure anymore, which is what steering, the HVAC system, wiring a 356 one day, a Ferrari 275 the next safety is all about. I also don’t think harnesses, the Engine Management day, or Ford GT, who knows. It’s fun, the real savings to the environment Systems and turbo chargers. but it’s also work. are anywhere near what they claim, if you consider what is takes to make About four years ago, we took one You believe Porsche is the and dispose of the batteries. 959 and disassembled the entire car ultimate sports car. and evaluated every system, and If you’re a manufacturer of high- every single component to decide They really are. The first time I drove end luxury cars, whether it be what needed to be restored, and a Porsche was in 1969 when my dad Mercedes, Porsche or BMW, it must what the shelf life looked like for took a 911 in trade. I got in that car, be extremely discouraging to know what was left on it. We wanted to and took it out on the back roads. I that you’re taking the heart and make it better, and yet keep it a couldn’t believe a car could drive like soul out of the car and replacing it 959. I didn’t want it to be something that. I was hooked, even though I with an electric motor. It reminds different than what it was, because couldn’t afford to be hooked at that me of when I was a kid and had slot it’s still one of the greatest Porsches time. But I bought a damaged one car tracks. You’d buy your electric in the world. So basically, we’ve and fixed it up, and then another motor platform, and then you’d either restored, refurbished or one, and finally got an almost new put whatever plastic body on it upgraded every component in that 911T in my 20s. you wanted. I’m okay with hybrid car in our “re-imagined” 959. We’re technology; that’s a cool way to up to 15 of them now. There are There’s all kinds of great cars in do things. If people want to drive 292 original 959s in the world, and the world, but a Porsche just does electric cars, God bless them, but RESIDUAL VALUES Insights & Opinions from Automotive Industry Leaders

it’s not going be me. I’m going to Is there a transition plan, Any advice for someone keep driving gas cars. or next generation of interested in starting a family members to run the business or following their Your profile on the internet business? passion? claims that you are retired. I’m working on that. I’m confident In today’s culture, everybody wants Who believes the internet? I might there’s somebody out there who to be successful in a year. I was lock the front door of my business loves this business as much as I still failing 10 years after I started and not answer the phone, but do, wants to learn about it, has my business. You need patience, a I’m not retiring. I love what I do, I had some experience in it, and is strong work ethic, and persistence. always have, and I’ll continue to do looking for an opportunity to come You’re going to learn something it. I come to work at 7:30 am, and I on board and carry on our brand. from every failure, and hopefully, go home at 7:30 pm. I don’t go out We’ve established a lot of value you’ll have more wins than failures. to lunch. We’re busy all day, every in our reputation over the past 40 And don’t do anything unless you’re day. And as for car racing, I’ll drive years. People call up and say, “I committed to doing it right. Don’t as long as I’m competitive and as want to buy a Canepa car.” They compromise. has a long as it’s fun. I always want to be don’t say, “I wanna buy a Porsche, saying that I’ve never forgotten: at the front, and when I can’t do Ferrari, or Mercedes.” They want to “Effort equals results.” That’s totally that, then I’ll retire from driving, buy a Canepa car, which is amazing true in everything that you. at least driving from race cars. I’m and rewarding. planning to work on the cars and drive them for as long as I can. Do you have any hobbies other than work and racing?

I do now. I have a granddaughter.

Bruce’s Biography

Bruce Canepa has been fascinated with automobiles, motorcycles, and trucks since his childhood. He started racing as soon as the rules allowed, first in quarter midgets and go-karts, then in super modifieds and sprint cars. In addition to numerous wins in all types of racing cars, he was awarded consecutive “Rookie of the Year” and “Most Improved Driver” in three different race categories. In 1978 he ventured into sports car racing, IMSA and Trans-Am. He finished third overall with co-drivers and Monte Shelton in his first Daytona 24 hour effort.

Since 1980 Bruce has not only piloted powerful race cars, but also managed his own successful automotive companies, Canepa and Concept Transporters. Bruce is very much a hands-on CEO; combining his business acumen, racing intensity, and a focus on detail that has garnered him a worldwide reputation of quality, performance, and style.