There is a hot little number in there called the Lykan HyperSport.
The car is a US$3.4-million (S$4.6-million) beast with a top speed of
386kmh and the face of a raptor.
It is also among the most expensive production cars ever to go on
sale. But it is not the only land rocket to come out lately that costs
more than a million dollars. Far from it.
Over the past decade, almost every carmaker (that calls itself a
true "luxury" brand, at least) has produced a contraption with a
seven-digit price tag. Sometimes, they get there by only making a
one-off with diamond-rimmed headlights and titanium bones, but they get
there.
The brands make these cars because people buy them. The past few
years have seen an explosion of royals and tycoons around the globe who
buy entire fleets of Aston Martins and Lamborghinis to support their
proclivities.
Bloomberg has discovered more than three dozen new billionaires in
the world since January alone, and more than 300 since 2012. They buy
the cars in Los Angeles, Doha, Moscow, Sao Paulo and Shanghai. Some,
like hotel tycoon Steve Wynn, buy them to bolster their business
interests just as much as their personal life.
"The fact of the matter is there are a lot of rich people around the
world and I mean super-rich - hundreds of millions of dollars to
billions of dollars of net worth," says Mr Jack Nerad, executive market
analyst for Kelley Blue Book. "When you're talking about these types of
people, a million-dollar car isn't really much of a stretch at all."
It is also lucrative for the carmakers, despite the extra work
required to specialise a given automobile. Margins on a standard
Ferrari or Lamborghini hover around 15 per cent, and when the price tag
on a particular car reaches into the seven figures, that amount can
increase significantly.
"If you have to set up a separate assembly line, it can become
expensive to produce" a car, Mr Nerad says. "But with million-dollar
cars, there's still money to be made."
The basic rule is that it takes US$1 billion to develop and produce
a normal mass-market car. But developing one that is not accessible to
the public can cost less than that because resource needs are
narrowed. Plus, it is easier to recoup the expense when price tags are
in the millions rather than, say, US$30,000. That is true even if a
company sells only 300 units of the car.
These super-expensive cars fall into different categories. Some,
such as the Bugatti Veyron and Lyons Motor Car's LM2, are truly unique
and made in minuscule production numbers. Others are special editions
of existing models (see: Lamborghini and Ferrari).
Let's look at how a Rolls-Royce gets to US$1 million. A base-level
Phantom starts at about US$400,000. Then you add custom treatment,
which most of them receive: special wood, paint and leather that can
hike the price by hundreds of thousands of dollars. Getting the
full-armoured treatment on a sedan can cost almost US$500,000 alone.
And at that point, the real heavyweight treatment starts: true
bespoke, unique work that adds precious gem and pearl accents,
hand-stitching, bulletproofing, theatre systems and elite engine
tuning. That last stage is where a standard Phantom crosses the
US$1-million threshold.
Then there is what carmakers call a "halo car". That is when a brand
that makes several different lines comes out with a concept car or
ultra high-end superstar that serves a purpose beyond its own price tag.
"Halo cars like these serve to really capitalise the brand," says Mr
Kelsey Mays, senior consumer affairs editor at Cars.com. "You look at
Bugatti, which is owned by Volkswagen, and the only car everyone knows
from Bugatti is the Veyron," he says. "But they know it's the one that
Beyonce buys for Jay Z. The real value... is in the association."
When people spend US$200,000 on a Ferrari California T, they are
tapping into the elite aura that is emitted by the US$2.1-million
Ferrari FXX. (There are only 30 of those, whereas thousands of
Californias are made every year.)
Every time a brand's race car wins a Formula 1 event, or a newly
unveiled concept vehicle shows off a brand's ability to harness power
and technology, the everyday drivers of the lower-tier cars get to feel
like they are part of the correct club.
Finally, some carmakers do not want to persuade a broader market to buy their cars.
Ultra-niche supercar companies such as Koenigsegg, Zenvo and the
aforementioned Lykan make limited runs of cars whose price tags can
soar into the multimillions. They are selling only to the uber-rich,
and in those cases, the exclusivity is a big part of the draw.
These efforts are often a gamble with high risk, and not always high
rewards. Zenvo, in Denmark, will make only 15 of its US$952,000 ST1
supercars. It is betting that the top speed of 603kmh and 1,104
horsepower will help it sell through the line, at which point the
owners estimate they will break even.
But before the Geneva Motor Show this year, the company had
delivered only two and received orders for five more. Then it will be a
few years before Zenvo can roll a new model off the production floor -
a time period when bigger carmakers can accomplish all kinds of feats.
It is important to remember that a high price does not mean the
consumer can have it all. One can probably get speed or strength or
comfort in such an expensive car, but not all three.
To wit: The Lykan is fast, but its engine contains only six
cylinders - the same number as pretty much every mass-made sedan on the
road today.
Or take the US$1-million armoured Mercedes-Maybach Pullman, which
requires more than five seconds to hit 100kmh. Do not buy it to win any
drag races.
Or consider the US$2-million Pagani Zonda, which has a certain flair
but has endured persistent criticisms about its high maintenance costs
and propensity to break down under even the slightest inclement
conditions.
"Exotic cars are fairly unpractical," says Cars.com's Mr Mays, in
the understatement of the week. "You need a whole garage of things to
drive when you own one of these - things that are a bit more rugged.
With something like a Pagani, you need real roads and, ultimately,
racetracks to stretch its legs."
Of course, if you are wealthy enough to afford something like the
Pagani, you are wealthy enough to afford the racetrack that goes with
it.
