Why Do Manufacturers Make Concept Cars?

Imagine you go to a food festival to see the latest culinary innovations from around the world. You’re excited, even though you might not be able to taste them yet. Most of the delicacies you see will soon hit the shelves and you’ll be able to sink your teeth into their deliciousness. Except for the concept cakes. The concept cake is confectionary masterpiece that looks like a dragon fighting werewolves with a lightsaber – quite visually striking. But not edible and never will be.

You might fairly assume that a cake of such description would be pointless, and it is, so why doesn’t this logic apply to concept cars? Auto shows are rife with them. It seems that every manufacturer has a concept vehicle of some kind at their stand that looks crazy, named something ridiculous, and made out of materials that simply have no place in the automotive world. Everyone who understands cars knows it will never go into production in the form in which it is presented. And here’s the kicker: it cost between one to two million dollars to build. So, why?!

A car company is always in a state of internal conflict between the products that they want to build and the products that will sell. Ignoring the market means you won’t make much money. Doing only what the market wants will breed mediocrity. Despite everything that I’ve already said about concept cars, they represent a great deal of prudence. A company needs to innovate not just in terms of propulsion and safety and all the things that happen beneath the bodywork, but there is also design, user interfaces, interior materials and new body styles.

The market is fickle, where half will shout that all the cars in the manufacturer’s lineup have looked the same for the last 10 years, and others will shout that fixing something that isn’t broken is stupid and this new design language is a betrayal of the brand. Navigating these murky waters is tricky. That’s why innovations are shown in concept form first, to gauge the response and mitigate the potential risks associated with the radical changes. If the response sways heavily towards the negative – back to the drawing board; if positive – the manufacturer struck gold and will try their damndest to put into series production something as close to the concept vehicle as possible. Compared to the potential profits gained or potential losses avoided, a couple of million dollars is peanuts.

These days concept cars are more relevant than ever, as the car industry is undergoing transformation towards electrification, autonomous driving and a shared economy that threatens their car-ownership-centric business model. This demands not just radical changes to their products, but a radical new product from the ground up.  Some of these concepts are not just pretty bodies, but get to be driven by car journalists to fuel the hype. One thing is certain – each manufacturer must offer their vision of this future and make steps towards it or fade into history.