Car manufacturing is a pretty complex business, utilising many thousands of skilled employees, along with hundreds of suppliers employing staff to make, sell and deliver the parts that go into your shiny new car.
Some car brands have a lengthy heritage in manufacturing motor vehicles of some kind helping us arrive where we are now. The modern motorcar is safer and more efficient than ever whilst offering services and functions to cocoon us from the outside world. Today’s cars have 100 years of innovation and skill woven into them.
However, that heritage and those well howned skills put larger car brands at a disadvantage to the new kids on the block. The most obvious new kid is Tesla. A California based technology firm that just happens to make cars and has been doing so on a small scale for just 10 years.
Tesla does not have an heritage, it is penning its own history right now. Tesla does not have hundreds of staff skilled in making petrol and diesel engines and therefore does not need to retrain or make redundant those it no longer requires, letting go of suppliers and closing factories.
Volkswagen has recently showed the world their I.D concept car at the Paris Motorshow. VW proudly stated it was entering a new era with electric vehicles forming a large part of brands offering. Yet, the car shown isn’t going to be available until 2020, leaving the German manufacturer open to criticism.
‘Why isn’t this car available now?!’ they ask.
The larger a business grows the less agile it becomes and slower to react. Imagine a supertanker out in ocean, how long does it take to stop and how much space does it need to turn around and plot a new course.
With long term success a business is less willing to take risks. Changing the formula leaves board rooms uneasy. Dieselgate is perfect example of where risk back-fires and reputations are destroyed.
Volkswagen desperately need to rebuild their reputation and has made positive steps with the I.D. Concept car. However, over sun filled California the smaller Tesla have a similar priced car arriving next year in the Model 3, with a bulging order book and a reputation built on taking risks and pushing technology.
Established car makers are struggling to keep up with the pace of the new comers. Those created with dotcom money, innovation and risk taking at their core. These businesses thrive on pushing the boundaries as do consumers. We are no longer excited about small incremental gains, consumers are now looking for the next game-changer. Could the established names just be analogue businesses in a digital world or can they turn and plot and new course?