Halo Cars That Shine
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A halo car is a showcase vehicle, typically intended to represent the best of a manufacturer's talents, such as Daimler Chrysler's's (DCX) Dodge Viper or the new Saturn Sky from General Motors (see BW Online, 5/31/06, "Sky High") All the performance and styling a brand can muster are wrapped into one drool-worthy, rare, expensive package. "Traditionally, these vehicles are intended to epitomize everything a brand stands for, everything a brand can do," says Wes Brown, a partner in the Los Angeles consumer marketing-research firm Iceology. "But they're also supposed to draw traffic to the showrooms."
That sounds simple enough, but it's a risky play if the car fails to live up to expectations. Halo cars are often expensive and impractical roadsters, and manufacturers keep production low to maintain the cachet of exclusivity. "Cost-wise, it's a matter of priorities," says Lonnie Miller, director of industry analysis at RL Polk, a Southfield (Mich.) marketing firm that specializes in collecting auto-industry data. "You can't look for an immediate return on investment when you're building a brand; it's long-term equity. It's about the 'what's to come.' "
Analysts say the risk lies not in production and marketing costs, but rather in the possibility of manufacturers failing to meet consumer expectations set by halos. "A halo car is a promise," says Brown. "A promise of what great things are coming down the road from the manufacturer. But if that promise falls short the people who took a chance will be slighted and will probably never come back."
Both Brown and Miller acknowledge that in order for the halo coup to succeed, follow-through is vital. "You've got to be able to move consumers from wanting a Viper to actually buying a Neon," says Miller. Brown adds, "It only works if the promise is met. The rest of the showroom has to be up to snuff."
Since 2003, Ford (F) introduced three vehicles that had varying degrees of "halo" success -- the Thunderbird, the GT, and the redesigned Mustang. The T-bird, the original retro muscle car re launched in 2002, was axed a mere three years later following a botched introduction and disappointing sales. The next attempt, the Ford GT -- a $150,000 super car capable of getting to 60 in 3.3 seconds, while widely praise by reviewers and fans around the world, is also being put to bed this year.
Not all halo cars have to be manufactured in low volume. Ford insiders say the real story is the new Mustang, a car that was not developed as a traditional halo car. It's been a welcome smash hit for Ford. Not only was it the best-selling convertible in the country last year, according to RL Polk, but total registrations for the Mustang convertible were 44,065, an increase of more than 11,000 from 2004. Now Ford is readying an ultrahigh-performance model to take over halo duties for the entire brand, the Mustang Shelby GT 500 -- which is due out this summer (although by most accounts that date seems overly optimistic).
Tim Owens, the Mustang's marketing manager, says that the new car is intended to wow enthusiasts, purists, and die-hards. Ford hopes that jazzing this type of customer will have amplified effects, trickling down to average car consumers. "A good halo generates excitement among enthusiasts," Owens says. "What we're really after are those enthusiasts' recommendations to other customers. They're stronger than any ad we can do."
One of Chrysler's biggest sellers has been a halo. The 300, which starts at $24,450 and debuted in 2004, initiated a series of aggressively styled cars, such as the Magnum, Challenger, and Charger, that have all enjoyed enormous popularity, although none has seen the same kind of sales volume as the 300, which sold more than 52,000 in the first four months of this year.
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GM, meanwhile, has rolled out sibling roadsters based on the same platform to three of its ailing brands -- Pontiac, Saturn, and Opel -- in a bid to polish tarnished images. Brown points to Pontiac's Solstice as an example of a halo car that, while great in and of itself, may not have the showroom follow-through to sustain momentum. This week, Pontiac announced that it was considering producing only performance-oriented rear-wheel-drive cars to recapture its former racing image. That's a move Brown contends wouldn't be necessary if the rest of Pontiac's lineup could toe the Solstice line.
Saturn's Sky, however, which closely resembles the Solstice, has better chances according to both Miller and Brown. "It's about the brand context," explains Miller. Brown adds, "Looking at Saturn before the Sky, honestly there wasn't too much to be happy about. But the future models they've been showing really pick up where the Sky left off. That could work well for them."
Foreign manufacturers throughout the industry employ the halo tactic in varying flavors, too. Famous Japanese halo cars that helped establish strong brand reputations in America include the Acura NSX and Nissan's (NSANY) Z. Other companies have focused on creating halo performance marks that can be applied to multiple vehicles. Examples include the M badge from BMW, AMG from Mercedes, and Honda's (HMC) new Si line.
The tactic is by no means new, going back to earlier days of auto history which includes storied halo hits like the 1947 Chrysler Town & Country and the 1957 Cadillac El Dorado Brougham. Indeed, looking back, the potential peril becomes apparent. Once-venerable American brands Studebaker and Olds mobile shuttered plants for good after releasing widely heralded halo cars -- a duo in Studebaker's case -- which failed disastrously to meet expectations. Under that halo there sometimes lurks an imp.
To see a lineup of today's hottest halo cars, click here.