Fisker Gets Over The Hump
For most people, the image that comes to mind when "electric" or "gas/electric" cars are mentioned is probably a somewhat boxy, midmarket vehicle topping out at around $40,000.
Fisker, however, inhabits a unique aerie in the auto world where the only competitors are high-end luxury sports cars and sedans. The company, co-founded by Henrik Fisker, a former BMW designer who presided over that company's DesignworksUSA shop, currently offers only the Karma, although a second more mass-appeal vehicle, the Atlantic, is in the works.
The Karma, built at Valmet Automotive in Finland (where Porsche's Boxster is also assembled) is a sleek electric that -- like Chevrolet's Volt -- has an onboard gas engine that revs up to provide power when the electricity runs out. If you've heard of the car, which starts at around $102,000, it may be due to the celebrity factor, including actor Leonardo DiCaprio's role as Fisker stakeholder, brand ambassador, and Karma owner.
But it may also be because the company has become a whipping post at Fox media and elsewhere because it got a big loan from the government, couldn't pay it back, and ended up laying off dozens of workers at the former GM plant in Delaware, where the Atlantic, now postponed, was to be built.
The company just got a new $100 million investment stake, and plans expansion into the Middle East and China. What it doesn't have is the budget for a tier 1 awareness blowout. Although Fisker did recently run a full-page statement ad in The Wall Street Journal, the focus is local and tactical, says Bart Schuster, Eastern regional manager of the Anaheim, Calif.-based company.
He tells Marketing Daily that the marketing focus is on tactical "spearhead" campaigns. "What I coach and counsel dealers is to have strong impact at the grassroots level," he says. "It has to be done there. I don't have Super Bowl budget material, so I task my local retailers to be market masters. And we support our stores to do more holistic marketing outside the brick-and-mortar environment because I can't hang a known logo on our front door and just expect people to come in. We are not a known brand."
Other marketing avenues for Fisker are social media, and eventually (when the company grows its sales and retail presence) more traditional marketing. "We are doing print now, and we are getting a lot of placement in movies, as well," he says. "I can't name them now, but they are all big." He says he has to turn a lot of offers down, such as the remake of “Robocop,” which wanted to use a Karma as a carjack victim in a Futuristic Detroit. "We didn't want to get involved in that." And then there's the Justin Bieber and DiCaprio angle (the former owns -- or owned -- a chrome-skinned Karma.)
Jesse Toprak, head of analysis at auto comparison pricing platform TrueCar.com, says Fisker must get the Atlantic to market as fast as possible because a niche-brand status is not sustainable. "To reach the masses they need to bring down the price of the vehicle to under $60,000, and they had plans to that with the Atlantic. Realistically, that is now a couple of years away," he says. "Until then, they have to deal with Fisker as a novelty act." Toprak adds that postponing also means by the time the lower-priced is ready to dive into the market, the pond will be saturated with lower-cost economies of scale. "The clock is ticking."
Right now, the easy part of marketing Fisker and the Karma, which has won numerous auto design awards of late, is that it's easy to identify its serious prospect. "Our competitive segment, from a transaction perspective, would be vehicles in roughly the $100,000 to $120,000 range, so we'd be looking at the Lexus LS 460 hybrid, the Mercedes-Benz S550 and S400 Hybrid, as well as the BMW 7-Series, Jaguar XF and XJ, Maserati, and Aston Martin," says Schuster.
He says the Karma prospect has a home value of around $2 million, and annual income of $350,000 or more. "They are 'affluently conscious' people who have a high adoption rate and interest in alternative fuels and high technology. So, for example, I have a managing director of a very large electric company who drives his Fisker, not his Bentley, to work."
Schuster says the company, which in North America has 48 stores and about 1,500 Karmas on the road, delivered about 100 of the vehicles last month -- "a very good month for us," he says.
Because of the bifurcated nature of the vehicle's appeal: high-tech and high-end, the company appears at places like Concours d'Elegance, and Holiday Weekend in New York’s Hamptons, but also in technology, and science venues. "We've had placement in front of the Apple Store, the Museum of Modern Art and a boutique in Bal Harbour mall in Miami," says Schuster, who adds that he will be speaking and taking questions at Massachusetts Institute of Technology Friday night in front of 1,000 alumnae and 500 current students. "I'm petrified." Understandable.