Tuesday, October 2, 2007

Reinventing the US car industry

The minivan—a Chrysler invention—is a great example of a company responding to unmet customer needs. The company seems to have forgotten that lesson.

These guys are trying to focus on the same old market segments. It is just so tired. Every single company at every brand offers every single variant. I can get an SUV from Porsche, from BMW , from Cadillac, from Mercury, from Ford, from Chevy, from Buick, I mean come on, guys. That only makes sense if you look at the industry from the vantage of a manufacturer. It only works if you think about the world in terms of factory efficiency. The industry knows nothing about the frontier needs of the consumers. Every time a team does work in that area, the managers say, "Yes, well that is an interesting vehicle, but we wouldn't be able to produce it at a mass scale and so my manufacturing wouldn't be efficient."

The places the industry is being reinvented are in India and China where you can buy kit cars that you assemble yourself. They are more modular, more customizable, and easier to maintain. If I wanted to create a big winner for Chrysler, I would help them to devise an approach that is so different from the way the rest of the mainstream industry is behaving. Every industry and every company needs to learn from the periphery rather than the core. Change always happens at the periphery.

How can we produce vehicles that everywhere in the world people would be excited to own, that are relevant to the lives they are living rather than the nostalgic idea of American car ownership, that responds to their busy lives, their terrible traffic jams, etc. Tell me about cars that are so compelling that people everywhere would want them and be able to afford them."

By Jessie Scanlon, senior writer for Innovation & Design on BusinessWeek.com.

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