General Motors Can Still Reinvent the Auto Industry

February 28 2009 / by Garry Golden
Category: Transportation   Year: General   Rating: 2

Kill the Combustion EngineVision: Skateboard = 21st Platform for Mobility
Last week, GM announced $30.9 billion loses in 2008, yet it hasn't lost its 'Autonomy' vision of re-engineering how cars are built via modular components and its ability to grow new revenue streams around 'after market' upgrades and mobility services (e.g. OnStar).

The catch?

It needs a decade or two to make it happen!

21st Century Growth Platforms
Growth has nothing to do with moving beyond oil, or finding better ways to sell 'new' cars.  In fact, we must get over this notion of a 'new' car industry model.   What other industry manufactures a $20,000-60,000 product without a pre-arranged buyer?

Growth has everything to do with:

1) Reducing 'Manufacturing Footprint'
Lowering costs by moving beyond the combustion engine manufacturing platform towards modular electric drive trains powered by the integration of batteries, fuel cells and capacitors. 

2) Software Services &  After Market
Shifting revenues towards the software-service side of the driving experience, and physical 'after market' design upgrades. GM should profit 'per mile', not 'per vehicle'.  Dealerships need customers that buy some new upgrade every month, not one vehicle every few years.

3) Rebranding as a Mobility Service Company
Why should GM be limited to a brand for personal vehicle ownership?  Develop new categories of mobilty products (e.g. personal urban vehicles).  Integrate products and services into a broader 'mobility services' sector that blends private and public transit options. (Realize you aren't in the 'new car' business, but in mobility services)

Many of GM's leaders like Sr VP Larry Burns, (Mr. 'Skateboard kills Car') understand this new reality, and I wish they'd be more public about a new vision for mobility and jumpstart this multi-decade long transition.  I'm not talking about an 'ad campaign', but a clearly stated vision that inspires the next generation of mobility industry entrepreneurs. 

Fixated on Building better 'Buggy Whips' (and Related Posts)

The global auto industry (including dealerships) has reached a point of diminishing returns in how it builds and sells cars.  And the only way out is to reduce its manufacturing footprint by killing the combustion engine, and focus on the revenue upside of life after the combustion engine.

The way forweard is to: reduce the number of factories by shifting to modular platforms, advance energy storage beyond batteries, focus on design and the driving experience, shift profit streams from selling new cars to aftermarket sales and mobility services, innovate around the evolution of software and energy systems.

 

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The Good news? China is investing in electric cars, The Bad news? China is investing in electric cars

GM's Larry Burns explains why the future of the car looks like a skateboard

 

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