Why automakers are spending millions on concept cars they’ll never make


Have you ever heard of the Spyker D12 or the Mazda Furai? How about the Sony Vision-S, the so-called PlayStation car? They are all concept cars that, despite their hype, will never see the production line. And these are not just sketches on a drawing board. Automakers have spent millions on research, development, and prototyping, not to mention the expense of displaying these cars at auto shows. And sometimes car manufacturers spend this money without any intention of releasing these models, which, at first glance, makes little sense.

What is a concept car?

BMW Vision Efficient Dynamics concept car at the Beijing Auto Show in April 2010 | Feng Li/Getty Images

To understand why automakers are seemingly wasting millions on concept cars, it’s important to first understand what they are.

A concept car is a model specifically manufactured to feature a new design feature, style and/or technology. Automakers showcase concept cars at auto shows to determine consumer reaction to these new features. And depending on that consumer reaction, an automaker may or may not incorporate these features into a new edition of an existing model.

Concept cars have been around for decades, and despite their long history, most never hit the market. In a few cases, some experienced limited production cycles. But usually, the new feature shown in a prototype is adopted in another of the automaker’s brands.

After a car manufacturer has manufactured and introduced these cars, it often destroys them. However, some are in storage, while others turn it into a car museum. And some are sold to wealthy private collectors. Most of these cars are not legally usable, so collectors only keep them for display purposes.

Why automakers are building concept cars they’ll never sell

Concept cars allow car designers to avoid the risk of bringing a new design feature to market prematurely. For example, suppose a car designer has an idea for a new engine design and incorporates it into the brand’s next-generation offering. In this case, consumer demand may not generate the increase in sales needed to offset R&D and production costs. They could spend a lot of time and money adopting the new design according to existing safety regulations, only to lose money because consumers aren’t interested.

On the other hand, when designers present a concept car at a car show, they can gauge consumer reaction to determine whether the new feature is worth adopting. Journalists from mainstream automotive and trade publications can write about exciting concept cars, providing automakers with inexpensive and effective marketing for their unique features. Automakers can also assess whether consumers would be willing to pay extra for new features or whether the buzz could generate enough sales to offset increased production and regulatory costs.

Since concept cars can offset financial risk and generate buzz, it makes sense that many automakers are willing to spend millions on them every year. After all, if spending six or seven figures on a concept car saves or brings in millions for a company, the benefits are obvious.

Some of the most famous cars that never hit the market

Even if you’ve never been to a car show, chances are you’ve seen at least one concept car: the 1954 Ford Lincoln Futura. Although the Futura never saw the mass production, its audience grew far beyond the crowd of car enthusiasts. Twelve years after its debut, it appeared as the Batmobile in the 1966 Batman TV show, where it appeared in front of viewers for years.

Most concept cars don’t become iconic TV props. But many yield models for some of today’s best-selling brands. For example, the Dodge Viper and Challenger, Jeep Rescue and Prowler, and Lincoln Navigator started out as concept cars, Business Insider reports.

If you’re an automotive enthusiast, you might be familiar with concept cars like the 2009 BMW Vision Efficient Dynamics, whose high-performance hybrid features eventually found their way into the BMW i8. Or you may have seen the Renault EZ-GO, providing a possible blueprint for driverless vehicles. And while fully self-driving cars aren’t on the road yet, several manufacturers are working on them.

Today’s concept cars will undoubtedly pave the way for the vehicles of tomorrow. It’s no wonder automakers stick to this proven marketing approach.

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