Dreaming up a new way to build dream cars

It’s the public debut of an idea hatched three years ago at Harvard Business School: what if you could reinvigorate the car business by letting the Internet community shape the product, and inviting buyers to get involved by visiting the factory to help assemble the car they’ve purchased?

The car that Wareham-based Local Motors Inc. is trucking to Las Vegas this weekend is a pulse-quickening sight: a curvaceous and coiled off-road vehicle called the Rally Fighter, with an image of Teddy Roosevelt on one door and Pancho Villa on the other, and a 3-liter BMW diesel engine under the hood that squeezes 30 miles from a gallon of gas. It is projected to cost about $50,000.

But with all new cars, there’s the question of whether people will want to buy them, especially amid a rough recession. And with all new companies, there’s the question of whether a small team can marshal the resources required to muscle an initial prototype into larger-scale production.

If you were casting a movie about the challenges of launching a new company while General Motors Corp., once the biggest automaker in the world, was being bailed out by American taxpayers, you’d want to cast someone like Jay Rogers as the chief executive. Rogers has worked as a McKinsey & Co. consultant, served as an infantry company commander in the Marine Corps, and graduated from Harvard Business School with high distinction. When he gives public talks or media interviews, he dons an olive green jumpsuit with the Local Motors logo emblazoned on the chest. Oh, and his grandfather was Ralph B. Rogers, who once ran Indian Motorcycle Co., the Springfield firm founded in 1901.

Rogers has envisioned a unique way to enter the auto industry: halfway between Ford Motor Co. and the companies that make “kit’’ cars the mechanically adept assemble in their own garages. Shell out the money for a Rally Fighter of your own, and you are committing to spend two weekends at a Local Motors “microfactory,’’ working alongside technicians to put your car together. Think of it as a “paint you own pottery’’ business model aimed at gearheads.

“We don’t sell cars - we sell an experience,’’ Rogers is fond of saying.

And selling an experience will help Local Motors escape from some of the stringent federal safety requirements, like crash-testing, that apply to cars that you purchase from major automakers. If you build at least 51 percent of the vehicle yourself, Rogers explains, the vehicle can elude those rules. (Though he’s careful to explain that the car is engineered to be safe, with features like airbags, and to meet EPA emissions standards.)

While the first Rally Fighter was assembled in a small garage in Wareham, Rogers is now raising money to build an 80,000-square-foot microfactory somewhere in the Phoenix area, which would be capable of cranking out as many as 2,000 cars a year. (It would employ about 45 people.) He estimates it will cost between $5 million and $7 million to bring it online: The company has already raised $4 million, about half of which was spent designing and building the prototype Rally Fighter. In Rogers’s grand plan, Local Motors will one day operate a network of 35 microfactories around the country.

He’s planning to move to Phoenix next year to get the first one up and running. Government officials in Arizona have dangled incentives, he explains, and the state’s emissions standards are more lax than those in Massachusetts.

Not only does the car look cool, but it emerged from online contests Local Motors has been running over the past year for wannabe car designers, seeking vehicle concepts that are appropriate for different regions of the country, like an off-road buggy for the Southwest, or a battery-powered compact car for Manhattan. (The winner of that competition was cleverly dubbed the “Green Apple.’’)

“For some competitions, if you win, you get $10,000,’’ Rogers explains, “and then if we build your car, we’ll pay you $10,000.’’ As the car came together in the Local Motors shop, visitors to the company’s website could watch its progress on a Webcam.

While designers from the Internet community contribute their vision for the body shape, features, interior, and the graphical vinyl “wrap’’ that decorates the body, Local Motors engineers handle most of the nitty-gritty.

The original design for the Rally Fighter, for instance, had the engine mounted in the middle of the car, which would have been much more expensive and complex, Rogers explains, than mounting it in the front. The designer of the Rally Fighter, an art school student (and former car company intern) named Sangho Kim, will be in Las Vegas this week for its trade show debut.

So far, only about two dozen people have put down a $99 deposit to indicate their interest in buying a Rally Fighter. But Karim Lakhani, a Harvard Business School professor who has been advising the company, notes: “For many people, the idea of a Rally Fighter won’t be real until they see the car, and see that it runs. . . . So it’s still too early to judge.’’

One of the would-be buyers who has placed a deposit is Reed Sturtevant, a former executive at Microsoft’s Cambridge research facility.

“When I made the list of things I wanted to do before I turn 100, one of them was go to the Galapagos Islands, and the other was to build a car,’’ he says. “I’m also really interested in the idea of ‘crowd-sourcing’ ideas on the Web, and also in do-it-yourself projects as a theme.’’

But Sturtevant, who is in between jobs, says he isn’t completely sure that he’ll follow through with the $50,000 purchase.

For the 10-person start-up car company in Wareham, there will be plenty of challenges in the months ahead. “I’ve got to sell cars, and I’ve got to sell them in a recessionary environment,’’ Rogers says, noting that several other start-up car companies, like Silicon Valley-based Tesla Motors, have stumbled after raising millions. (Local Motors applied earlier this year for $25 million in government loans through a Department of Energy program, but hasn’t yet gotten a response.)

Lakhani, the Harvard professor, says Local Motors has already been successful attracting people who want to participate in a car’s design process, but now it must prove it can also attract buyers - without spending millions on Super Bowl ads and billboards.

Mark Smith, a cofounder of Factory Five Racing Inc., a Wareham-based maker of kit cars, says that getting a deal with an engine supplier will also be crucial. Smith has invested in Local Motors, and also lent two of his top engineers to the start-up (they later joined Local Motors full time).

“When you’re in the car business, you hear from a lot of people who tell you about their plans to start a new car company,’’ says Smith, who initially brushed off Rogers’s efforts to make contact with him. “But Jay is doing something different, and his strategy is sound.’’

“The car business,’’ Smith says, “tends to attract people who dream big.’’

Scott Kirsner can be reached at kirsner@pobox.com.