Steve Purdy Report : 2015 C.A.R. Automotive Management Seminars - Day 4 Wrap-it-up

CENTER FOR AUTOMOTIVE RESEARCH
MANAGEMENT BRIEFING SEMINARS 2015
50TH ANNIVERSARY

DAY FOUR – WRAP IT UP

By Steve Purdy
Senior Editor
The Auto Channel
Michigan Bureau

Traverse City MI August 2015; Wrapping up our week at the conference we have a variety of presentations including one by the Assistant Secretary of the U.S. Department of Commerce, Jay Williams. We introduced him in our report from day three when we did an individual interview with him. He expanded from the podium about his department’s support of manufacturing by funding training programs and support of regional development and seeding projects around the country. We learned that it was his agency that provided the seed money, for example, to do the feasibility study for the proposed autonomous car proving grounds, or testing facility, using the expansive Willow Run site in Ypsilanti, MI that is now mostly vacant. Willow Run is famous for its history as the “Arsenal of Democracy” producing bombers and other materiel for WWII.

Futurists would be entirely in their element here as we always find previews of what is to come in the car business. A company called Local Motors built the first 3D-printed car less than a year ago and another during the North American International Auto Show in January. They revealed plans to begin building these vehicles for sale in the not-too-distant future. They will be low volume and produced in “micro-factories” and printed while you wait. On the design panel with Local Motors chief strategy officer, Justin Fishkin, was rock-star automotive designer, Camilo Pardo, who suggested he might like to design their first production car.

Speaking of futurists, we’ve been hearing for some time now speculation about urbanization of the world’s population and what that will mean to automobile design and use. Cities will continue to evolve away from individual ownership of automobiles toward car sharing schemes, public transit and perhaps systems we’ve not yet thought of. Ford’s VP of vehicle component and systems engineering, Jim Holland, revealed his company’s thinking on the issue. His bottom line is that as an industry we are only beginning to study the issue but Ford and many others are already taking very seriously the research into car sharing.

Perhaps the most vivid metaphor used this week was by Honda dealer Forrest McConnell III who used a stalk of broccoli and a donut to describe demand for practical and eco-friendly cars verses fun cars that people really want to buy. Particularly when fuel prices are low, as they are now, people would much rather drive SUVs, CUVs, fast cars and fun cars – the donut – over hybrids, electrics and uber-efficient little cars – the broccoli. This philosophy, of course, relates to the government mandates on fuel economy. What if, for example, government requirements don’t match consumer demands? New car sales will tank as people hold on to the cars they like. (See : Americans Want And Should Have Big Cars!)

Complaints often surface about the negotiation process at dealerships when trying to buy a car. Lexus’ group VP and general manager, Jeff Bracken, reveled a process they are experimenting with that will have their dealers setting a negotiation-free, no-haggle price. This may sound anathema to traditional practice, particularly since profits in high-end, expensive vehicles can be large leaving more room for the customer to save some money. Bracken said they are experimenting with a handful of dealers now to see if this will work but the goal is to get most, if not all, of the dealers to embrace the process. No-haggle pricing is already in play with their low-end sister brand Scion. (Buh Bye True Car)

While much of this week’s focus may seem Michigan-centric there is good reason. Fully 80% North American automotive research and development is done within 60 miles of Detroit according to the Michigan Economic Development Corporation officials. No place in the world has a greater concentration of auto manufacturing, design, testing and other business supports. Luring great candidates here is sometimes difficult and some suggest we should only do it in summer. Hey, not so fast, I caution, some of us like our dramatic Michigan winters.

The auto business is good. We’ve heard it said more than once this week that if you’re anywhere in the automobile business today and you’re not making money you should think seriously about going into another business. Unlike just six years ago when it looked like General Motors and Chrysler might cease to exist, today we’re looking at opportunities so rich that we have not enough entrepreneurs to take advantage of them all. In fact, the industry is desperately recruiting at all levels.

So, Traverse City is the place to be the first week in August every year if you want to know what’s going on, and what’s coming up, in the automotive industry. It is the place where industry executives from OEMs, suppliers and dealers meet up with analysts, journalists and government officials. Engineers hint at, and even reveal, what’s to come. Designers share their thoughts. And generous amounts of social time stir them up well pollinating relationships and ideas.

CENTER FOR AUTOMOTIVE RESEARCH
MANAGEMENT BRIEFING SEMINARS 2015 Reports

SEE ALSO: Speaker Presentations (PDF)