So began a 1923 magazine advertisement that became legendary. The ad was developed to sell a car, the Jordan “Playboy”. Previously, car ads concentrated on practicalities, such as engine size, the number of forward gears and special features. “Somewhere West of Laramie” changed all that, to highlight the automobile as a path to adventure, as something fun in addition to its obvious practicality.
Investors should remember, amid all the focus on emissions, fuel economy, technology and electricity, that many consumers think that driving is fun, although commuting perhaps not so much. Why else does the motorized “toy” industry enjoy annual sales of more than one million personal watercraft, ATVs, snowmobiles and motorcycles? And how else to account for the popularity of sports cars, convertibles and high-performance vehicles?
It is probably smart to recognize that consumer acceptance is an essential ingredient in product demand and investment potential. Autonomous motor vehicles may be safer and a more practical alternative, but they convert everyone to passenger status. How is that “fun”?
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®