Saturday, August 13, 2005

Don't Give Up on Electric Cars Yet

That's the opinion of some scientists anyway according to this Autoweek article. I've said this before, but I think electric cars have a real future in Europe, where commuting distances tend to be shorter, as well as trips for errands. The small size of cars here and the lighter loads they carry are perfect for current battery technology. I don't think electric cars are as good of an idea for the States. I think the US is going to undergo a dramatic transformation due to high oil prices in the next couple of decades. We will see a great deal of population movement to cities, and much more density in city areas. It's sort of the beginning of the US auto market looking more like the European auto market. Once diesel cars take more of a hold, and distances become shorter for people in America, then we could finally see electric cars coming up. But I think the first automaker that makes a reliable commuter for Europe that is electric will make a great deal of money. In fact there already is one for the UK: The G-Wiz. I've seen a couple in London already. They are incredibly small, smaller than even a Smart car. The first company that can turn a VW Polo size car into a functioning electric commuter will do quite well.

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Thursday, August 11, 2005

Interview with Marc Baxter: Part I

As I promised in previous postings, I would attempt to interview people working in the British auto industry. My first interview is with Marc Baxter of BMW/Mini UK. His position with the company is that of head of "Competitive Intelligence". It's a department I'm sure all car companies have, just not necessarily under that name. His department analyzes rivals in the UK market to BMW/Mini, and influences sales and marketing for his company's cars subsequently.

One of the reasons I see the British auto industry as interesting is because I see it as a direct possible future for America. People have asked me, why work in the British auto industry? Isn't it dead? My answer to them is that it can hardly be considered dead due to the fact that the UK is a very large car market (By Mr. Baxter's account, the third largest in the world for BMW, and probably in the top 10 overall). Just because its large domestic manufacturers have either been absorbed by foreign companies, or destroyed doesn't mean that manufacturing of automobiles in this country has stopped. Quite the contrary, for according to Mr. Baxter, the Mini, which is built entirely in the UK at Oxford, its factory has received hundreds of millions more pounds in investment from its BMW parent.

The future of the American car market might just be corporate headquarters of foreign car companies where these HQs deal almost entirely with marketing and sales, rather than the actual building of the cars. That is left to a foreign headquarters somewhere else in the world (most likely Japan or Germany). There will still be manufacturing in the US, it's just that the cars will also be designed and engineered elsewhere. It hasn't happened to as great a degree as it has in Britain, but the general trend in the US is towards this.

The BMW headquarters for the UK is located in the suburb of Bracknell, which is sort of a brand new planned city to the west of London. With its many business parks and new roads it looks a lot like an American suburb. Public transportation is not as comprehensive as in London, and there is a great deal more car usage by the public. Houses have driveways, two cars: they look just like American planned lots, except smaller and no pickups are to be found. I was a little disappointed in this, as I was hoping that Britain would be less dependent on fossil fuels than this. But the fact that the cars most people were driving were more efficient, and the public transportation was still capable was a better sign for the future than in the US.

And one last similarity: In the center of the town was a strip mall. Yes, the dreaded grotesque American creation has flown over the pond and landed here as well. The shops had different names, but sold the same wares.

Part 2 of the interview will come tomorrow. Sorry for not taking pictures, but you'll have to take my word for it that Bracknell is a lot like an American suburban town. I actually may be returning to Bracknell in a few weeks, and will take photos at that time.

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Monday, August 08, 2005

The Diesel SUV is Here

The Jeep Liberty Diesel is selling at a rate more than double than expected. DaimlerChrysler is accomplishing this without selling one of these in five states including New York and California because of emissions restrictions. Can you imagine how many diesel Libertys would be sold if they could sell in all parts of America AND if they actually made a rebodied Liberty as a marketing gimmick like the Prius is to hybrids? The diesel SUV would be cheaper than the Escape Hybrid, have more towing capacity and offroad ability, would last longer than any hybrid, need less repairs, AND STILL get the same gas mileage. I would expect sales so large that they would affect the bottom line at that point. The Japanese marques are very vulnerable right now, having not made an effort to get diesels to America. It's the same mistake they made in Europe and it cost them market share for years. They're beginning to make a comeback over here, but for a long time the lack of diesels really held back the Japanese and many of their European exploits were unprofitable. I'm beginning to think that if Daimler can offer diesels across the board before any competitors and have those diesels on sale in EVERY state including California and New York, we are going to see DCX really be on top for awhile. Right now they are riding high on sales of the 300c and Hemis, tomorrow I think it will be diesel SUVs and cars.

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Sunday, August 07, 2005

Risk in Foreign Lands

Michael Dunne of the Detroit News has a great article on the risks of dealing with companies in China. They aggressively steal competitors blueprints, and seeking any recourse in Chinese courts is virtually impossible. Economists today love to harp on the success of the Chinese economy. They forget to mention that China is also an incredibly corrupt nation that lacks many of the safeguards we in the West take for granted. Like intellectual property laws that actually work.

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