Two Words

There’s a classic joke where somebody will say “I’ve got a great idea! Two words:” and will then proceed to tell you the worst possible combination of words (if not actual ideas) they can think of. It’s a take-off on the Hollywood standard of pitching an idea for a new movie or television show in as few words as possible (“Wagon Train – in Space!” was the one for the original “Star Trek,” for example). The basic concept is that if you can express the idea in less than even one full sentence and it still makes sense, then it is probably a good idea. In real life, of course, we know that only a handful of all movies released ever become commercially successful, and only a handful of the movies produced are ever actually released for public viewing. The sad truth is that it takes more than just an idea you can summarize into a couple of words to make a successful motion picture, and the same can be said for most other business enterprises. Unfortunately, somebody out there apparently thought “Lamborghini SUV” was a good idea…

You can pick up the original story from the (London) DailyTelegraph website if you want to, but the headline pretty much says it all: the Italian supercar manufacturer is resurrecting a concept it originally launched in the mid-1980s and tooling up to produce a four-seat, four-wheel-drive vehicle predicted to feature a V10 engine developing about 600 horsepower. The automotive writer at the Telegraph also notes that both Porsche and Bentley have successfully entered this segment in the last ten years, and since SUVs are the largest-selling class of automobile it isn’t unreasonable to find other high-end companies trying to get in on the action. All of which is true, of course, but the last Lamborghini SUV only sold about 300 units over seven or eight model years, and give the rise in gas prices and general malaise of the economy the super-luxury market is not particularly healthy at this time. An even bigger issue, at least from where I’m sitting, is who exactly is going to buy an SUV that costs as much as seven or eight full-size American-made units – and what would you use it for if you did?

Now, I realize that no one goes around purchasing supercars of any style for functionality or utility. If you had that level of disposable income you might do so because you love the aesthetics of the design, or because you are fascinated by the workings of high-performance exotic engines, or even because having the words “I have way more money than you, neener neener neener!” spelled out on your clothing in handfuls of diamonds is considered in bad taste – but you still wish to get this message across. If you live in a place like Los Angeles, or certain parts of Europe, owning such a vehicle might confer instant status on you – although whether that would be worth the 2,000% price markup or the attendant danger of carjacking would be up to you. What I question here is whether the cost of setting up production of this specialty model will be worth the return the company can expect in purely economic terms – because anything else is just scruffy blogger snark, and not real business analysis…

In the long run, it doesn’t matter what you or I think about the new Lamborghini Urus – unless you are one of those very unusual people who not only has several hundred thousand dollars of disposable income but is also willing to spend it on an essentially disposable product (cars have a five-year depreciation, and a supercar typically has a lifespan of 25,000 miles or less). I’m being dismissive of the idea because I don’t see where the added value to the purchaser will come from, and because the previous attempt by the same company to enter this market segment was unsuccessful. But I acknowledge that the people at Lamborghini have sold a lot more cars than I have – and they thought this pitch was worth a try…