Krishnan Menon had unique plans for the launch of Karma Automotive LLC and its $130,000 hybrid sports car, Revero—he envisioned it as the world’s first invite-only auto brand.
It may have made sense for an automaker that’s after the “self-made risk takers,” who like the idea of exclusivity and who are “universally attracted to design”—a pool of about 200,000 to 300,000 people whose household incomes are more than $300,000 and who have several luxury cars in their garages.
“The line we created for them was, ‘You can’t buy Karma,’” said the co-founder and chief executive of the Phenomenon agency in Los Angeles, whose clients include Louis Vuitton Malletier SA, PepsiCo, Aetna Inc., Procter & Gamble Co. and Intuit Inc.
But neither the slogan nor Phenomenon’s role in the revived carmaker’s future were meant to be.
“The problem was the dealerships—you can’t tell a dealer that you can’t sell something,” Menon said. “The other idea we had was you had to apply to get Karma, and it’s not based on how much money you had but based on how much good you’ve done in the world.”
The Costa Mesa-based automaker wasn’t shopping for an agency when it crossed paths with Menon’s last year—it’s still working with GoConvergence, part of Mood Media Corp. in Austin, Texas, which set up a small office in Newport Beach—but met with Phenomenon at the urging of an industry insider.
“They came and said, ‘Here’s everything we can do for you,’ and it was like you went into this all-you-can-eat buffet and I just wanted a hamburger,” said Karma Chief Revenue Officer Jim Taylor. “We dated like three times … We went to L.A., and we kept trying to find something that would be small enough [but] still be worthy for them to take on … We just didn’t need much … All the creative work, [marketing executive Barney Campbell] does in-house.”
Menon, however, did end up convincing himself to step up to the plate and order the 2018 Revero from the Rusnak Auto Group in Pasadena. He was also the first customer to receive the vehicle last week at Karma’s factory in Moreno Valley.
“It’s actually one of the best shapes you’ll ever see in a car,” he said, swooning over his Borrego Black model. “It drives like a sports car, but it’s as smooth as the Tesla … There is a sense of substance to the car.”
A Car a Day
The automaker—known as Fisker Automotive and Technology Group LLC before Wanxiang Group Corp. bought it in a 2014 bankruptcy court auction for $149 million—also delivered 10 demonstration vehicles on May 12 to its network of 10 dealers, four of them former Fisker lots. Karma wouldn’t say how many preorders it’s taken. The “Branded Experience Center” at its new corporate headquarters in Irvine is scheduled to open in the fourth quarter.
The Revero is powered by electricity, gas and solar energy and can reach 60 miles per hour in 5.4 seconds. Karma’s 556,000-square-foot factory in Moreno Valley shows little resemblance to a typical car manufacturing plant, where vehicles streaming on a conveyor line are assembled by robots. The process is instead spread across 26 work stations in a general assembly phase, each vehicle pausing long enough for craftsmen to “do everything we need to do,” said Vice President of Manufacturing and Quality Jack Graff. The last three stops are for vehicle testing, including wheel and headlight alignment, suspension and water seals checks.
“It’s a much easier and friendly way to build a vehicle, but you can’t build a lot of vehicles that way,” Graff said, explaining that his team of 198 employees is able to finish just one car a day as it works out early kinks, while the facility’s equipment capacity is two cars per hour.
“Our focus is to get it right and 100% customer satisfaction,” said President and Chief Operating Officer Dennis Dougherty. “Our production will be increasing over the course of this year.”
The Revero manufacturing process—including body assembly and painting—takes about a week, but “it’s not happening because we find too many irregularities and you have to correct them at the stations,” he said. “We are probably building one in eight to 10 days” with the current workforce.
Tempered Growth
Karma’s plant sits next to a vacant lot that may provide room for expansion, if need be.
“[The landowner] just finished excavation and prepared it for a building [the plant’s] size right next-door,” Graff said. “It’s an option, we talked to them, but we are not ready to do that—maybe when we get this to two cars an hour, which probably won’t be for another year or two.”
Another factor that would drive expansion is a potential spike in demand for the vehicle, but Graff said the company is “not interested in a large population of people. It would be better if we had a little niche group. That’s a $130,000 vehicle, and we don’t ever want to say, ‘Well, if you buy it today, you get $10,000 off.’ You don’t want to get into that position. They want to keep the demand higher than the supply.”
