Clearly, the auto industry is struggling. As someone who has spent his career studying ways to improve things with technology and software, I have compiled a list of “recommendations” for the auto manufacturers to consider as they move forward.
1. Build cars like computers.
When you look inside a computer, none of the pieces were made by the same company. Each piece was made by a company that is good at that component. Maybe Western Digital makes the hard drive, Intel makes the chipset, RAM Co. makes the RAM (I don’t know a well-known RAM company), etc.
You may be thinking to yourself, “but Jeff, Ford doesn’t make the GPS they put in their cars either.” Agreed. But could I easily (and for little cost and labor) replace it with a better model later? There, the answer’s NO. Sure, I can buy a new car stereo for my car, but it’s not something I can easily install, nor is it something that’s going to just snap right in, like RAM or a hard drive.
Why not, instead, build cars with universal ports? Like a computer. Devices could plug in like USB devices do on a computer. 3rd party device manufacturers could build their wares to snap into place. Let’s say your car comes with 3 ports. You can plug in a GPS device, a Zune, and a CD player. Don’t care about a CD player? Use your third port as a DVD player. And best of all, you can buy these pieces at your favorite retailer: Best Buy, Circuit City, etc. Not direct (and only) from your dealer. Maybe that will be the end of problems like this one:
This is the GPS that is offered on the Ford Fusion I4 SEL today. DVD-based GPS devices were old 3 years ago. Self-contained, portable, hard-drive based, easily-updateable GPS devices are now the industry standard. New DVDs (you should get them updated each year) will cost you several hundred dollars as well. In addition, it’s not portable. If I want to use it, I’ve got to be using THAT vehicle. All this for the bargain price of…did that say $1592? Holy crap. Maybe THAT’s why they’re not selling. Most GPS devices today cost less than $200. And they’re better! It’s disgraceful. It’s as if they don’t want to sell these things at all.
2. Get rid of the dealer system. Sell direct.
I mentioned this on Twitter today, and got a bunch of great responses, both positive and negative. The biggest point that was made was that there are laws in every state to prevent manufacturers from selling directly.
Over the past century, car dealers have secured a complex web of state laws that protect them from being undercut â€” by the car makers themselves, and more recently, by people trying to sell new cars online.
My question regarding these “franchise laws” is this: WHY? What happened to a “free market economy?” I’m sure there are thousands of examples where there are laws interfering with the true pricing of products (tariffs, etc.), but this is just ridiculous. Get rid of it. You want customers? Focus on customer service.
High-pressure, commissioned salesmen roaming the polished floor just waiting to be your best friend. Why do we do it this way? Because dealerships are not agents of the manufacturers, they have purchased a bunch of vehicles, and are now in a position where they have to sell them (at a good profit), or they’re going to lose a BUNCH of money. So even though your hopes are high when you look at you next car online, when you get to the dealership, you’re stuck picking from the rotten fruit that remains on their proverbial tree. “We don’t have one with the GPS, but we do have this shiny silver one…” That’s not service.
What if going to a dealership meant talking with someone who was paid to HELP you, not just pretend to be helpful until you decide to buy? What if they sat at a computer with you and helped you customize the exact car you wanted? And then drove it to your home or office to deliver it when it arrived!
One of the other comments people made was that my solution would still require a need for “dealerships.” Yes and no. My dealerships just serve different purposes. My dealerships are based on customer service.
- Test drives – you can still test drive at the Jeep Store, but now you drive “the Grand Cherokee.” Test driving a vehicle should not include driving the red one, or the one with the seat warmers. Drive the ONE Cherokee and determine if you like it. Then go home and order one from your computer.
- Repairs – there are some that still feel their car should be fixed by the company that made it. So they take it to the shop that they bought it from. What makes that place any more qualified than an independent one down the road? Training? Parts? Those are all things that could be solved other ways. I contend you don’t need a branded dealer repair shop.
- Used cars/trade-ins – my last trade-in was done at CarMax. I took my car there, sold it to them, and they never once spoke to me about buying another vehicle from them. And I got the price I expected from the sale. Why do we need to mix new and used cars? Do you buy used Apple computers at apple.com? I think not.
3. Cater to what’s cool. Not everyone’s a motor head.
MP3 players have been on the market for almost 10 years. There are STILL cars being manufactured without a way to plug in these devices directly. We are talking about less than $10 worth of wire and a jack. Why is this being missed?
If a car manufacturer offered a base model (4 cylinder, 5-speed manual, 30ish MPG) that included some major features inside the car, I guarantee it would be one of the best selling cars of the year. Sure, there are different audiences for different cars. Some guys ONLY care about the size of the engine. But I contend that MOST could care less. Most people buy a car to get them to work. And if they could get a car that not only could tell them HOW to get to work efficiently, but also play their favorite songs, and entertain their kids on a long trip, that’s the car they’re going to buy. Adding GPS, a DVD player and screen, MP3 jack, Bluetooth, and an advanced CD/MP3 multi-disc player should not add more than $1000 to the base cost of the vehicle. I truly believe that you could make a fuel-efficient car with all of those features TODAY for less than $15K. But we won’t see it. Not as long as billion dollar CEOs think it’s acceptable to sell GPS for $1592.
How would YOU improve the next generation of vehicles to make them more appealing?