About The Authors

Friday, May 1, 2015

Lambo: A Rampage of Conspicuous Consumption

mike smitka

If vehicles were purely practical devices to get from point A to point B then car enthusiasts would not exist. Colors? – everything would be gray, easier than white but cooler and less prone to showing dirt than black. Acceleration? – why? Comfort, yes, critical for the commuter, and autonomous cruise control would be part of every vehicle, overriding any attempt at aggressive driving while eliminating rear-end collisions. Perhaps seats could be customized for those unusually tall or short, or for the minority with trim physiques. Sizes, well, there surely would need to be a range, from 2-seat commuters to soccer mom SUVs. And cost! – without superfluous variety, engineering and tooling would be spread across production runs of a few million, while advertising would be unnecessary. There'd be no need to maintain much inventory in the system, either -- in contrast to the 60+ days of inventory in the system today, and the megadealer with 300 vehicles on their and hundreds more off-site. Repairs would be cheaper, and so would insurance, so depreciation aside, the cost of ownership would be lower. Used cars would likewise be a commodity, carrying a minimal markup, and easy to sell.
Linked from the Lamborghini Museum web site
Think VW Beetle, and the underlying vision of a "Volkswagen", a People's Car or Kokumin-sha / Guomin-che (国民車) that bureaucrats in China or India or Japan or Russia made the focus of their industrial policy. Fortunately (?!) for consumers, in the long run these bureaucrats failed to get their way, while in Germany Fordwerke and Opel [and later BMW and Mercedes] provided alternatives. In the US you have perhaps 600 new models to choose from, and even more in China. Europe is surely similar.
The reality is that "our" motor is a status symbol, a statement of personality, a consumption good independent of its value as transport. Indeed, this is central to the industry's business model: profits depend on it.
So let's contemplate the opposite end from that of quotidian transport, a vehicle as a pure status symbol, a la Thorstein Veblen.
Think Lamborghini.Note What matters isn't the vehicle itself, but that you have one.
First, such a vehicle has to be visually distinctive. That doesn't mean pretty. The Prius succeeded in the US because of its cult status, not because of its value proposition, as its fuel efficiency is far short of what would be required to justify its price. But to gain that status, you had to know what it was, and it was ugly. To reiterate: being ugly was absolutely critical to its success. No one copied the styling. No one wanted to! But while Toyota later offered other hybrids, at markups lower than that for the Prius, those were all versions of existing models indistinguishable from the plain gas version. None sold. Supercars are even more visibly distinctive. By happenstance, and unlike the Prius, some of them are also beautiful.
Second, as a pure status good a vehicle has to have exclusivity. That means price. A Prius is partly an affirmative purchase, commensurate with the self-image of a Yuppie with a social conscious, owned by many with similar affinities. Toyota can and does charge a premium: it sells mainly the loaded trim Levels IV & V, in contrast to the subtle message that it's an economical vehicle, not an extravagance. So it's not exclusive, though also not what a sensible person on a tight budget would purchase. There's no doubt though that a Lambo is a wildly expensive, in-your-face, I-can-afford-it drive.
Third, it helps if the status good at hand is, well, not very good. Let's face it: a Lambo is impractical, verging on useless. It's small, noisy, uncomfortable, and requires a modicum of attention to what you're doing. Texting while driving??? - no way. It's not good for a quick shopping trip, not good for a long drive, and (if you have performance tires) not good in inclement weather. Let's not even think about insurance and maintenance, because it's a statement that you have the wherewithal to own an expensive vehicle that sits in a garage 99+% of the time, with something else as your daily drive. A supercar wouldn't have the same cachet if the designers made compromises – a bit of soundproofing? – to make it a practical vehicle.
So to what extent is your drive visibly distinctive, overpriced and impractical? Surely almost every vehicle has a bit of that, including the '88 Chevy truck that sits in my drive for a week or more between uses, but lets me blend better in my neck of the woods even though I don't have it up on blocks. [OK, for two months I lent it as a daily work vehicle to a friend who is a contractor…it isn't a practical vehicle for me.]. We – even I – care about status. We also care about having consumer products that fit our self-image, and that fit our neighborhood. Both, of course, are obvious sub-texts in car ads.
A Lambo, though, is pure conspicuous consumption.

Note: I would have used a Porsche 911 as an example, except that, while acknowledging how impractical it is, it's the daily drive of one former student.