Halo Hypercar, beauty & profit.

The current batch of hypercars has been created out of a fastidious doctrine of hyper-functionalism often extracted directly from Formula One and Le Mans Prototype technology and this comes at a price… but not only in cash terms… but also in aesthetics.

Stretching the boundaries of science for downforce and aerodynamics has often come at the detriment of elegant styling. Gone, it seems are ultra sports cars inspired by classical, aesthetically attractive styling in the pursuit of the ultimate expression of technological performance.

These cars are more at home on the track, less so on the road, though each example launched by the major brands is usually over subscribed, irrespective of price.

At the sharp end of hypercars are two distinct Tiers of activity that feed into and benefit each other providing differing angles of market attack and can be catogorised as follows;

TIER ONE – ULTRA HYPERCARS (HALO)

These ultra halo cars are often created from an original specification that requires extensive investment into design, tooling and advances in drivetrain and are created to showcase long-term technology and brand direction.

Embarking on creating ultimate expressions of a car is hugely expensive with spending levels not often making the public domain.  These cars are often extremely exclusive and therefore built in low numbers and obviously command very high purchase price. Even with £multi-million price tags, these cars actually present little in the way of profit margin to the manufacturer, which is only redeemed in the resale market.

Examples of these cars might be the Aston Martin Valkyrie, One-77, Mercedes AMG Project One and La Ferrari, McLaren P1 and Porsche 918.

Moreover, whilst these cars will be engineering ‘tour de forces’ there has been a gradual primary focus on aerodynamics to the detriment of styling and often directed by the rules of racing not of road. The net result is that these cars are similar performance tools to that available to a Formula One driver and likely beyond the capability of the majority of owners and so ownership is more for investment than ultimate use.

For those who do require to experience the ultimate performance, there are track day versions that come at an even higher premium and purely experiential such as the Ferrari FXX or Aston Martin Vulcan.

TIER TWO – ULTRA SPORTS CARS

This second tier has evolved into a profitable activity and provides manufacturers with the opportunity to amortise costs associated with halo builds into low volume, high margin brand examples.

Manufacturers have identified this market opportunity to maximise profit margins achievable by ultra low volume and high value specials, examples of which are as follows;

The Aston Martin Zagato series constitutes 325 cars that includes 99 Coupes, 99 Volantes, 99 Shooting Brakes and 28 Speedster versions all designed upon end of line Vanquish underpinnings and selling for £500k plus. This presents a gross revenue north of £500m!

The McLaren Senna has a build run of 500 examples and sold for £750k and is in effect a rebodied 720S drivetrain with the heavy lifting development, engineering and tooling costs already absorbed and a high profit margin available.

McLaren have extended this opportunity further with the example of the profitable use of existing underpinnings to create the Speedtail of which the 106 examples are all sold and command a cost per of £1.75m and created from a pick n mix of their existing model suite.

Ferrari are creating the Monza, a Speedster with two models the SP1 & SP2 both based upon an existing model the 812 Superfast and created to fill the void for buyers not successful in acquiring a La Ferrari, and will likely be priced accordingly.

Porsche offer an exclusive run of 77 modernised versions of a 1980’s 935 ‘Moby Dick’ model based upon underpinnings of a GT2 RS model each selling for circa £900k.

These cars achieve high margins and constitute a financially profitable commercial model of variants without the need for engineering original thinking and high development costs so the Tier 1 feeds into Tier 2.

Additionally, the advent of rapid prototyping manufacturing techniques allows for more bespoke and low volume builds significantly reducing tooling costs that traditionally constituted a challenge to low volume builds.

Although both tiers have a nuance in commerciality, the fundamental proposal in both is that the cars have extreme performance levels goals that often come at the detriment of road use making the transition of ownership ‘convenience’ not defined either way.

Doing it a little differently, but can also be catorgorised as Tier 2, are businesses like Singer Vehicle Design whose cars are based upon existing 3rd party OEM underpinnings although a small percentage, around 20%, of the original car is retained the end result has a high price tag.

These cars are exquisitely created utilising modern and classical skills and innovative technology and like Tier 2 market cars, models are hugely desirable and tick the exclusivity box, commanding very high values and high net profit margins.

A feature of both Tiers is that these cars are often sold out at the launch and/or prototype phase, before they even get to production with deposits secured that can pre-fund the creation.

The success of these cars is primarily as a result of the strong brand power, but also the need for ultimate exclusivity by buyers and fans of the brand, but also an inescapable increase in the uber wealthy and their need to express trappings of their wealth with ultra exclusive, bespoke commodities.

The world of halo and hyper car development and creation seems like it will continue to excite and push the technology, but also we hope that the desire for F1 cars for the road, or super fast drag cars bought by brash billionaires, can be expressed with a bit more classical beauty.

The Ed

 

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