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A Car Guy Cashes in by Transforming Clunkers

April 30, 2013
URL: http://www.entrepreneur.com/article/226303

Luxury and ruggedness don't always go hand in hand, but they converge beautifully at Icon, a company that produces artisan-quality, custom-made rides out of scrapyard-bound vehicles.

Housed at an industrial complex in Chatsworth, Calif., Icon's headquarters stands out thanks to the dozens of beat-up, rusted Toyota Land Cruisers and Ford Broncos lined up in the parking lot. "They're our ladies-in-waiting," jokes founder and CEO Jonathan Ward. Each one will be transformed, via reverse-engineering and low-volume manufacturing techniques, into a fully customized vehicle.

Ward, a self-described "purist geek" when it comes to cars and design, founded his first brand, TLC, with his wife, Jamie, in 1996. A small automotive shop focused on restoring Toyota Land Cruisers, TLC led them to the idea for Icon, which has grown into a 28-person, $5.2 million business. Ward expects revenue to triple over the next three years.

Wanderlust and a wager inspired the restoration business. "During my travels, I saw that the more remote the terrain, the more people were devoted to their Land Rovers," he says. "I thought there had to be a much larger market." He started tinkering with the idea of quality restorations of four-wheel drive vehicles. Then, while attending a University of Southern California business extension class, another student bet him $1,000 that he couldn't increase demand for restored vehicles by improving the quality of the supply.

Ward took the bet. He and Jamie advertised their services in local auto-sales magazines, then traded their first restored Toyota FJ40 in exchange for design of their original company website. Soon Universal Pictures ordered five matching FJ60s for the movie Dante's Peak. In 2000, the Wards got another big break--a call from Akio Toyoda, president of Toyota Motor Corp. Toyoda had heard about the business and hired Ward to help with preproduction designs for what would eventually become the 2007 FJ Cruiser.

"The process left me yearning to see the prototypes as I envisioned them--hyper-engineered with unnecessarily cool parts," says Ward, who took the money from the Toyota contract and built the first pure Icon vehicles, tricking them out with top-of-the-line components, including LED diodes used in jet planes; windows made of skyscraper glass; and upholstery designed in partnership with New York-based Chilewich.

Icon Reformer 1965 D200 1. The Icon Reformer 1965 D200 Dodge Crew Cab.
2. Modified Dodge gauges, updated to flow with the new design.
3. Stainless steel mirrors, one of many custom design details.
4. Icon's lizard mascot, found somewhere on every build.

And for each customer, bespoke details: like the Wyoming cattle farmer who wanted the farm's brand featured as a design element. Ward's own ride--a 1952 Chrysler Town & Country wagon--still has a vintage shell, but under the hood is the engine of a 550-horsepower supercar, as well as an 18th-century whiskey bottle used as an overflow reservoir.

It's not just car buffs and Toyota that have taken notice of Icon. Ward is involved in a $1.1 million project with Ercole Spada, design chief of Aston Martin's original Zagato; he's also working on converting a vintage gas vehicle into an electric plug-in, with support from General Motors. In 2011 the Icon Bronco was named Car of the Year by GQ. Ward has even collaborated on car parts with designers from Nike.

Though Ward was initially worried about the high price point--models start at $108,000--the company's biggest problem these days is that some inventory is sold out until the fourth quarter of 2015. "Demand is far outstripping manufacturing capacity, and it kills me," he says. "I'm losing sales every day." He is looking at the best ways to raise capital and to scale (up to now, he has been investing revenue back into the company), and is hopeful for the passage of legislation that would establish a class of "low-volume motor vehicle manufacturers," allowing him to build cars from scratch, rather than salvage.

As for that bet, Ward says he never collected his $1,000--but he's OK with that. With Icon, he's more than proved his classmate wrong.