Automotive News is reporting that Infiniti has settled on producing a new “halo” vehicle. A halo vehicle is a flagship model which sells in low volumes, perhaps at a loss. Why would Infiniti devote precious resources and money on a car it might actually lose money on? The idea behind building such a vehicle is the “halo effect,” discovered (or invented, depending on one’s views on the idea) by psychologist Edward Thorndike.
Thorndike’s idea was that people’s perceptions of other people are skewed when presented with certain positive attributes about them. If a person is particularly attractive, for example, one is more likely to incorrectly assume that the person is especially trustworthy. Car companies believe that this concept holds true for vehicles. Ford produced the Ford GT with the idea that people would have more positive perceptions about the rest of the brand’s fleet, based on their perceptions of the GT.
I believe there is one key difference between Thorndike’s halo effect and that which auto companies use. While it is clearly incorrect to assume that a more attractive person is more intelligent, it doesn’t seem entirely incorrect to assume that a car company which is able to produce an incredible halo car, such as the NSX, is a better company than one which is not. A lot of the technology from cars such as the NSX and GT end up in lesser vehicles, and the halo cars also prove just how good the best engineers at a certain company are.
What really matters in the end though, is whether people buy more cars because of halo cars (whatever the reason) and specifically whether they buy enough to offset the cost of the flagship cars.
Sometimes car companies don’t know that they’ve produced a halo car. For instance in 1978, BMW released for production the first M-division car for sale to the pubic, the M1. The only reason it even went on sale to the public was because certain production volumes were a requirement of the race. Since then, BMW has a whole motorsport division available for purchase to the public with the pedigree of that original car, which signifies high performance luxury. And the neat thing about it is that those M cars look pretty much the same as the regular cars, which helps to pass down some of the M mystique onto the regular cars.
But I’d argue that the Ford GT40 of the 60’s was a far greater halo car than the one of the mid 2000’s without necessarily trying to be one. It was created as a Ferrari beater and the victories it won at the 24 Hour LeMans showed that an American company for the masses could beat a celebrated European sports car company at its own game. That certainly sends a message to consumers.
The question that I am left with is simply how much money these halo cars make for car companies. I assume that finding such a number is very difficult, and it also could be difficult to measure the impact of not making a halo car (and thus being one of the companies deemed incapable of making one).
Blake, to your point I think the most effective method of examining the value of these cars would be to somehow survey consumers about their opinions of a brand before and after the halo car, and to then assign a “value” to that feeling.
These halo cars not only bring in profit from their own sales, but also bring in customers of every different earning degree who some day hope to own THE Halo Car. For example the Ford GT in the 60’s brought in many more customers for all different brands. The fact that it was a Ferrari beater also helped fuel the cause and everyone wanted to have their hands on one. I will have to agree with Oliver though in saying that the 60’s GT was a far greater halo car.