In his Video blog this week Al Ries tosses us the thought that Automotive giants like Ford and Chevrolet might, in future, cut their wide model ranges down opting instead for a single model that they can focus their efforts on. Unlikely, I think, but its clear that something has to change in the Auto world.
The reason that I think Al is wrong is really because the Automotive industry is full of emotion – emotional consumer buying decisions of course but emotional business decisions too. Somehow I can’t see the guys at GM, Chevy or Ford accepting that they have been heading in the wrong direction for the last fifty years and winding down to a corner shop operation, whatever the commercials might say. But that’s just my gut feel.
Ben Bacon suggests in a comment that Mini is a example of this in action, which it isn’t really, but I get his point. The Mini idea though might suggest a pattern for the future.
There are a lot of issues to consider here, but just to take a few key ones – Environment, fuel consumption, cost of product development and staying in the game and decreasing car ownership (I think so). One solution to this might be that the globals sell off brands or even some models like Stingray and Mustang that are really brands in their own right just like Mini, to marketing organisations, but offer a manufacturing resource to the new owners. Design can be sub-contracted out by the new owners to specialists (It seems often to be anyway) and so even might distribution and other stuff.
What you get as a result is a kind of Mini scenario, with global distribution that avoids the environmental cost of shipping vehicles, or even parts, around the world. The brand owners can choose what markets they go for and manufacture locally and develop models that they feel meet the demands of their segment.
OK, so that’s the Automotive industry sorted, what’s next?
Michael Weaver
January 12, 2008