Horsepower Freaks (HFP), originator of the turn-key E46 M3 turbo platform, went out of business in early May. I didn’t find out until just recently and the news came as a huge surprise. I’m sure everyone feels the same way. There’s not too much details because there has not been an official press release. It’s hard to differentiate between the facts and the rumors. From what I have pieced together, there has been an ongoing lawsuit against a former employee who has embezzled somewhere in the neighborhood of $200,000. HPF lost the battle and only got a small amount of financial retribution, not enough to sustain the business.
I’m not familiar with the business but I don’t think $200,000 can sink a company. I think it’s just the last straw that broke the camel’s back. There has been increased competition from other tuners on a E46 M3 turbo package. Ones that are cheaper and equally fast. The E46 platform is aging and the R&D for the new E9x platform has been a slow ongoing process. Expanding the operation and facility probably didn’t generate enough revenue to cover the added expenses. Investing on the shop cars can be costly. There are a slew of other factors that could have contributed to HPF’s demise.
The real loss goes to the customers who has paid for service or parts. It’s a mess over at HPF and with the business shut down, it’ll be a difficult and lengthy process to sort things out. However, a handful of individuals (some ex-employee(s) included) have volunteered their time and effort to return refunds to the customers. Unfortunately, the person who should be taking responsibility of this is the owner, Chris, and he is nowhere to be found.
There are also speculations that a HPF customer, who has invested in the company, has the rights to the turbo kit design and he will be bringing it back to the market in one form or another.
Also, an HPF employee has allegedly stolen/taken the R&D for a turbo E9x M3 platform and is collaborating with another shop/tuner. The kit is rumored to be nearing completion and will be launched within the year.
There’s a lot of drama revolving around HPF. Hopefully we can hear the truth and all the customers are made right.
UPDATE: I’ve been told that plans for the HPF turbo E9x M3 kit never materialized and hence, never stolen/taken by any individul/ex-employee. It’s just another rumor that has stemmed from the drama.