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Focus: Car world's fabulous baker's boy

ON A hot day in the summer of 1962, in a house in Cavilda, a village in the heart of the Argentine Pampas, a seven-year-old boy showed his mother a balsawood toy car he had just made. He told her that one day he would build a real car, and that it would be the best in the world. The reply from his mother, the wife of the village baker, is unrecorded, but it is believed she smiled, looked out at the poor, rustic heartland surrounding her house, and sighed fondly, hoping for the best for young Horacio.

At the Geneva Motor Show in April this year, one machine was attracting more attention than any other. It was a brand-new, pounds 190,000 sports car that outdid even the Lamborghini Diabolo for sheer outrageousness. Its bodyshell was made entirely of advanced carbonfibre composites, like a Formula One car, it was capable of 210 mph, and the quality of its detail engineering, according to those present, was as good as any car in the world. It was the belle of the show.

Dozens of orders were taken from around the world, a message of congratulations came over from the Ferrari stand, and motoring magazines featured the new car on their next covers. Standing proudly next to the new exhibit was a dapper businessman from Modena in Italy. His name was Horacio Pagani, and his progress from being the son of an Argentine baker to a doyen of the world of supercars was complete. The car, the Pagani Zonda C12, is taking the motoring world by storm, though at that price the interest is mainly from drooling motoring journalists and Saudi princes. Britain's Evo magazine calls it "the most advanced sports car in the world" and Germany's motoring bible, Auto Motor und Sport, says it is "a technical masterpiece".

Building a supercar is one thing. A multimillionaire with money to waste can always employ some engineers to screw together a fast, expensive vehicle. Motoring history is strewn with the corpses of companies that had grand schemes, and sometimes even built fine cars, but eventually went nowhere: Bugatti and DeLorean are just two recent examples. What marks Pagani out as different is, in the words of John Barker, editor of Evo, that "he seems to realise making cars successfully is primarily about business, not glory. This is a serious operation".

Pagani himself designed the car from the ground up. Pagani's car may have just appeared on the market, but it is being built by his own, long- established company, Modena Design, which makes carbonfibre composites for Formula One cars and clients like DaimlerChrysler, Ferrari and Aprilia (makers of Italian racing bikes). Pagani himself owns 75% of Modena Design, which he set up a decade ago. Industry sources say the company has no debt, a rarity for an exotic machine manufacturer.

The 40 employees are all working on both the cars and the composites side, which brings in tens of millions of pounds a year. "I worked towards building the car very slowly," says Pagani. "I funded it entirely from my own operations, and I was careful not to rush to make something I could not afford. If nobody wanted to buy the Zonda, we would carry on making very good profits from the other business."

Unlike some specialist manufacturers, the cars are not financed by the taking of deposits from new customers. A greying, slim, slightish man with an intense expression, Pagani is standing in the atrium of his company's headquarters, a modern two-storey building that he designed himself, in an industrial estate on the outskirts of Modena. With his glasses, inscrutable expression and grey suit, he looks like an accountant, the sort of man who would frown at the excess of the gaudy machine parked in the lobby like a mad sculpture. "I always knew I would build the best car in the world," he says, in a tone more bloody-minded than arrogant.

After a series of ever-more sophisticated childhood models, Pagani built his first car at 17, just before going to study industrial design in the Argentine town of Rosario, constructing a track racer out of resinated wood and engine and suspension spare parts. At college, he made more track racing cars, "working day and night, obsessively", he says. His first, looking like a cross between a go-kart and a miniaturised Formula One car, sits in a corner of the atrium today. "I built them all from scratch, I had to do it my way," he says.

His lucky break came when Juan-Manuel Fangio, the Argentine racing driver, spotted one of his cars and gave him advice and encouragement. But, even though success beckoned in his homeland, Pagani's ambitions were far greater. "To build the world's best car you have to be in Italy, because that's where all the resources are, the designers, the engineers, the technicians," he says.

One day in 1983, Pagani and his wife Christina flew to Italy. "We were penniless," he recalls. "We lived in a caravan near Como and survived by doing menial jobs." Pagani rang the head engineer at Lamborghini, makers of the fastest cars of the era, and pestered him for a job. "He finally said I could come in and sweep the floors in the engineering department. I said, fine, but one day I'm going to make a car that is better than yours. He just laughed." Within a few months Pagani's training and obsessive workaholism were recognised. He was put in charge of the company's composites division and by 1987 was one of its top designers. In 1988, he started his own company, Modena Design. The town of Modena, on a plain 100 miles south of Milan, is close to the Ferrari and Lamborghini factories and a large supply of market expertise.

"I knew I had to make the business successful in itself before I started making any cars," Pagani says. An important client base was established, and in 1991 - just as the world market for exotic cars was collapsing in the recession - he told his accountant he wanted to produce the world's most exclusive sports cars.

"My accountant said, `I think you'd do it brilliantly. Now come and see my psychiatrist,'" Pagani jokes. Pagani already has 30 orders, worth almost pounds 6m, for his cars, despite the fact that only two have been made so far and it has been on the market for six months. His design company's reputation for quality is such that Mercedes-Benz agreed to supply the specially-tuned, V12 engine that powers the Zonda, something one industry source says "small manufacturers can only dream of".

"I think it's a good time to be in the market," Pagani says. "I don't think people will buy my car as an alternative to a Ferrari. They will buy it in addition. It's like when one of my clients said to me: `I have 20 Rolexes, now I want a Patek Phillipe. Your car is a Patek Phillipe."

He is also sticking to the management philosophy he taught himself, somewhere between Cavilda, Rosario and Modena. "I have never taken out a loan, and I never will. We will finance only what we can afford. And I know that even if a disaster happens to the car market, we have one of the leading composites manufacturing companies in Europe."