Is Detroit now asking the right questions?
1/14/09 / David Kennedy
A few weeks ago there was an article in the Denver Post about the reason for the demise of the US auto industry (thanks to Chuck, our finance manager, for passing it along to me).
In the article, Ed Quillen mentioned an age-old anecdote about asking consumers what they want. When US automakers built and tried to sell what consumers said they wanted, they had no success. Then they asked, “What would your neighbor want?” When they built that (big, overpowered, and gaudy), it sold. We’ve probably all heard similar examples of how people are more honest when projecting their opinions on to someone else (the other classic example is: “Have you ever cheated on a test?” vs. “Do you know anyone who has cheated on a test?”).
This article got me thinking though, are the automakers asking the right questions now? Sure, it’s important to be green (whatever that means anymore), save gas, and reduce greenhouse gases, but what’s next? Will chasing today’s trends only set them up for failure again tomorrow?
Several possible trends come to mind…
- Increasing congestion. Will congestion based pricing incentivize smaller cars? Will smaller cars be essential for more urban areas?
- A more fragmented society. Will there be a need for much greater customization of cars? For example, young adults are staying unmarried longer and having kids later. Non-traditional families are becoming traditional. Society is aging. And we all have different needs (or at least wants).
- Information hubs. Cars are already becoming communication hubs with GPS and navigation systems. How will the continued convergence of technology propel this trend?
Given the product development cycle for new cars, not dedicating resources to figuring out what’s next would be a huge mistake. And Detroit doesn’t need to find themselves playing catch up again.