Here’s an interesting quote from
Carlos Ghosn, CEO of Renault-Nissan, that appeared recently in Business Week. “The main weakness
of today’s global automakers is that they are incapable of delivering a car
that fulfills basic needs at a very low price. The people who have these skills
are in India and China.”
The context is the publicity
surrounding the upcoming release of the Tata Nano, now scheduled for sometime
in October. The Nano, which is being manufactured in India by the Tata
conglomerate (an Indian company), is being billed as the world’s cheapest car,
with a target price of US$ 2,500.
I came across the article that
contains the Ghosn quote about the Nano just about an hour after having read
some news concerning the Ford Motor company. The schedule of events celebrating
the 100th birthday for the Model T has just been made available to
Given the nosedive in Ford’s
sales last month – almost 28 percent lower than the same month in 2007 –
there’s a question in my mind about how many people will show up to celebrate,
if they’re even in the mood.
The juxtaposition of news about
the Nano and the Model T is painful. It demonstrates dramatically how much
things have changed in the world of auto manufacturing. Wasn’t “delivering
a car that fulfills basic needs at a very low price” exactly what the
Model T was all about? Ford’s ability to do that is history. In fact, the whole
U.S. auto industry’s ability to stay in business is now in question.
The U.S.-made vehicle that is
getting the most buzz these days is the Tesla Roadster, a hot new sports car
that can take you from 0 to 60 in about 4 seconds, and, by the way, happens to
be all-electric. The Tesla is the brain child of Martin Eberhard, a high-tech
entrepreneur. It’s built in a town you’ve never heard of (San Carlos,
California), about as far from Detroit as you can get in the continental U.S.
It is not surprising that a car
with the potential to change the automotive landscape is being built by a small
manufacturing company. The very idea of an all-electric sports car with
Porsche-challenging aspirations would never have made it through the layers of
bureaucracy that exist in the Detroit 3.
To be fair,Tesla Motors has yet to become an unqualified success. Everything is in the early stages, not even as far along as the DeLorean, the last sports car to challenge Detroit and one that ultimately suffered financial failure. But the very fact that Tesla Motors has gotten this far should be an inspiration. It shows that there’s always room for success, even in a stricken industry.