Categories

The Critical Path #81: Continuous Flow

We cover misleading headlines with respect to the iPhone at Verizon while questioning the ebb and flow of media tone on Apple news. We also dive deeper into Asymcar and how to think about car manufacturing. Finally, how to approach industry analysis regardless of your industry.

via 5by5 | The Critical Path #81: Continuous Flow.

  • Bruce_Mc

    Apple press coverage going negative last summer – I think this happened because people stopped reading the positive coverage. In the popular press, what is written about Apple is what people will pay the most attention to. When people stop reading “Apple good” stories, then “Apple bad” stories are written. In this way, press coverage of Apple is similar to press coverage of any celebrity.

    Asymcar – The Pontiac Fiero was an attempt at making cars in a different way. So was the Corvette, initially. Of course, the unibody replaced body on frame back in the 40′s and 50′s.

    I like where you are going with this, thinking about modular and more finely distributed manufacturing as a disruptive force in the auto industry.

    • http://www.asymco.com Horace Dediu

      Was the Fiero really different? There have been attempts to replace some body panels with plastic but the chassis and structure has not changed, as far as I know. A way to ask the question is: is the build process different? Because if it was, then the plant would have to be drastically different. Was the Fiero built in a plant that was not used for other cars?

      • Bruce_Mc

        To answer your questions, I found an article on Ate Up With Motor, a website that received an award from the Society of Automotive Historians. The article is here:

        http://ateupwithmotor.com/sports-cars-and-muscle-cars/201-pontiac-fiero.html

        Some quotes:

        “With such a limited budget, Aldikacti decided his best bet was to sequester the P-car from the normal Pontiac organization. Most of the engineering development was done at an outside firm, Engineering Technology Ltd. (ENTECH) …”

        “Fiero production was assigned to a shuttered factory in the GM manufacturing complex in Pontiac, Michigan. Because the Fiero was an all-new, low-volume product, Hoglund decided it would be a good opportunity to explore new approaches to production. He hired W. Edwards Deming …”

        I’d say the build process of the Fiero was not radically different, but for it’s time it was significant.

      • http://www.asymco.com Horace Dediu

        Indeed: a welded steel unibody with bolt-on plastic panels. In concept, it was comparable to the old Citroën DS and Rover P6, both of which were also unibody designs with unstressed body panels (albeit in steel, not plastic).

      • Bruce_Mc

        It might be worth sending an email to Aaron Severson, the author of that article, who is also the owner of the website. I have read many of his articles. He seems to be very knowledgeable about the car industry, and also seems to enjoy sharing his knowledge. He may know of historic and current manufacturing processes that are different from the norm and practical in small volumes.
        http://ateupwithmotor.com/contact-form.html

    • El Aura

      The BMW i3 might be the most aggressive attempt to innovate in the production of cars. An aluminium chassis with a carbon fibre body on top, largely held together by glue with only a few screws.

      http://www.telegraph.co.uk/motoring/car-manufacturers/bmw/10015336/BMW-i3-electric-car-the-inside-story.html http://www.bimmerfest.com/news/691658/first-look-bmw-i3-production-line/

  • Carthusia

    Horace, I just listened to this podcast and I thought you were going in a different direction. I’m glad you made it clear you were open to other ideas. In terms of understanding disruption theory, the disruption and innovation in the car industry (as you imply) is not in the power train or aesthetics. However, I do not think it will be mainly in manufacturing processes. Might we use Tesla as a lens, a la Apple? (Although electric power trains do allow Tesla some independence from the vagaries of petroleum markets.)

    The innovation and disruption will be in the value chain, especially in vertical integration. There are indications that Tesla seeks to install charging stations, first in its most dense customer markets, that will serve two purposes 1. decrease real or perceived concerns over range anxiety, as Tesla-owned stations eventually will mean that no Tesla will be outside the range of a charging station and, more importantly, 2. charging will be subsidized or free; that is, built into the price of the car. This second point incorporates a value-added aspect of the car-sharing segment of the automotive industry. Specifically, the appeal is that the cost of fuel is built into the hourly or daily rate.

    Tesla will leverage solar, wind, fuel cells, and other forms of renewable resources to offer customers free charges up to a certain amount. Above a certain number of volts, Tesla may up sell additional battery re-charging in the same way that iPhone purchasers may be up sold to 32 or 64Gb of local device storage at purchase or additional iCloud storage beyond the included 5GB. Lease packages may include several levels of charging from $0 to $100 dollars or more per month. Payments may be processed via in-car or mobile device apps in much the same way that iTunes purchases are handled. In essence, consumers would pay a premium to buy into an entire vertically-integrated and robust premium ecosystem. Tesla stations could be the new Apple stores. Apparently their dealerships are quite similar in nature to Apple stores.

    In terms of this disruptive vertical integration, there will be Tesla cars and Tesla filling stations, where Tesla owners may fill up and go inside a comfort station, internet cafe, etc. while the car is charging. This vertical integration comes right out of the Apple playbook. If Tesla is smart, they will spend the capital to procure land, infrastructure, etc. Again, an analogy to Apple is to build retail stores and data centers. They also must work in secrecy as much as possible and leverage their “first mover”advantage in this space.

    This would be extremely logistically complicated and capital intensive, but Elon Musk is demonstrably not averse to extremely innovative approaches to otherwise highly technical and capital intensive endeavors. Just look at how quickly he got into space entrepreneurship. It this point, comparisons to him and Steve Jobs as entrepreneurs may not be premature. To take this farther, I sincerely hope Apple buys Tesla-but that appears to have zero chance of happening. I just don’t see Musk selling. It’s a crazy idea-about as crazy as Apply buying Intel! Sorry for the long post, but yours is a fascinating discussion!

    • Bruce_Mc

      People buy cars to get from one place to another. They do not buy cars to experience delays. The delays translate to the user as pain. It seems like you want Tesla to give their customers a finer quality of pain than their competitors do.

      • Carthusia

        I’m not sure how your reply is connected to what I wrote. If you mean the delays of re-charging electric cars, relative to gasoline powered vehicles, that necessarily obtains in the current and foreseeable future of electric autos; it’s not something I invented. Is yours an indictment of electric cars, overall? I was attempting to draw some comparisons between the business models of Apple and Tesla.

        A further point of comparison I can make is that perhaps incremental improvements in battery and motor technology may lead to decreases in charge time and increases in range, respectively. Moreover, if increases in automobile gross weight can be reversed without compromising safety, handling, etc., we may see further obsoleting of the combustible fuel engine in passenger cars.

        Such focuses are analogous to Apple’s focus on shipping the best product given favorable market conditions and iterating/innovating over the long term, absorbing profits and outpacing competitors as they go. Each of these ideas also appear to be in line with Horace’s well-articulated analyses of Apple’s market strategies and strengths.

      • Bruce_Mc

        What you wrote:

        ” … there will be Tesla cars and Tesla filling stations, where Tesla owners may fill up and go inside a comfort station, internet cafe, etc. while the car is charging.”

        My response:

        ‘You will have more fun waiting to use a Tesla than you will have waiting to use any other car’ just doesn’t seem like a good way to sell cars to me.

        What don’t people like about cars? Visiting the gas station, buying insurance, maintenance, the DMV, driving in traffic, buying a new car at a dealer are a few things. I think CityCar, Uber, and Google are doing more work on reducing pain points of using cars than most manufacturers are.

      • KirkBurgess

        You only need to refill a tesla if you are taking an extended drive – 90% or more of drivers charging there cars at home overnight will have more than enough for their daily driving needs.

        Regarding maintenance, the tesla has hardly any moving parts in its powertrain, meaning minimal servicing costs.

        For those on road trips or long drives, Tesla has already said that the supercharger charging times will improve in the near term, where a 30 minutes or more refill will be done in much less time – before long it won’t be significantly longer than a gas station stop.

        And looking long term, undoubtedly the top end tesla in 10 years time is likely to have far higher range than the average ICE powered vehicle because battery power per square inch is constantly improving, while the range improvement per litre of petrol is hardly moving.

      • Bruce_Mc

        Tesla is a new organization, an outsider in an industry that is almost an oligarchy. Just the fact that Musk has been able to get a seat at the table of car manufacturers is a tremendous accomplishment. But he is doing deals with the other oligarchs, Toyota in particular.

        If Tesla succeeds at doing something new, Toyota will be in a good position to copy it. Other manufacturers could follow along. I think it’s possible that Tesla could change the automobile business (to some degree) without actually changing the major players significantly. That would not be disruption. It certainly would be evolution which is needed and welcome.

        “The Reckoning” by David Halberston is a book about the auto industry (mostly US) in the mid 20th century. It gives a good look at what the industry was like back then. Things may not be all that different now.

      • KirkBurgess

        By the time tesla has proved itself successful with mass adoption, it will have built out the remainder of its free proprietary supercharging network across America, a network that only services tesla cars, that was financed by the current sales of luxury vehicles. At that stage a competing manufacturer will need to offer its own nationwide network of supercharger equivalent stations before average car buyers will buy their vehicles – it becomes a chicken and egg problem for any manufacturers looking to enter the EV field, as its a very big gamble you have to make spending the hundreds of million needed to build out the network, which reduces your margin on the EVs considerably if the cost of the network is included in the EV models production.

      • Bruce_Mc

        Tesla makes the motor and power train for the Toyota RAV4 electric. Is that car physically not able to use a Tesla supercharging station? If it is physically able to use a Tesla station, then Toyota could do a deal with Tesla instead of building their own network of charging stations.

        GM and Ford could simply lobby Congress to start up an “Electric Interstate Initiative” or something like that and make the government pay for the charging stations. All it would cost the manufacturers is a slight increase in lobbying expenses.

        I don’t think there is much point in discussing what Tesla will do to the industry several years from now. There is nothing wrong with hoping that their plans work out. But I don’t think that is a certainty.

    • poke

      I think Horace’s main point is that manufacturing processes explain why we don’t see many new entrants. It’s the moat that keeps out start-ups. I do think he should give Tesla a second look, but it’s true that Tesla could be more innovative with regard to how they build cars (although perhaps they’re planning something for their upcoming low end vehicle).

      • Carthusia

        You’re right about Horace’s main point; my point was a bit off-topic. I just wanted to get some feedback on whether the type of disruption I referred to was something he had considered in looking at the future of the car, i.e., manufacturing is one crucial part of it, but it is but one part. Innovating and disrupting the value chain may extend considerably beyond the factory floor. Interestingly, perhaps, I feel that Apple’s greatest innovative and disruptive contributions may eventually come not only from product design, but more and more from highly-automated robotic manufacturing processes.

  • http://enkerli.wordpress.com Enkerli

    “People are now walking away from cars”… “If you don’t innovate, the consumption just evaporates.”

    …which brings us to car nonconsumption and what cars are hired to do.

    Disclaimer: I call myself a compulsive pedestrian. Partly as a joke (“my mother made me do it… I was about a year old when I started it…”). But mostly to get people to think about broader issues surrounding transportation. I was born in Montreal in 1972 and, as a child, I was deeply concerned about cars being a dysfunctional part of my society. Living in the US, I got weird looks from people who realized I was actually walking from one place to the other. Being “carless” sounds like a disease in many parts of the US (including some of the most progressive ones). I prefer being “carfree”.

    Yesterday was Earth Day. Here’s something I posted on Facebook (with a link to the discussion of the fallacious Ford quote about “faster horses”):

    * As car manufacturers ask people what they want, people say they want better cars.
    * Why are we still so obsessed with cars?
    * Where’s my energy-efficient jetpack?
    * Why are cities still built around cars’ needs?
    * Carfree living can be such an improvement over carbound lives.
    * The rat race is “built for drivers”.

    I didn’t expand, there and then. I probably shouldn’t, here and now. But I sincerely hope we can have an open discussion (or, at least, a thoughtful analysis) of the “Disruptive Innovation” from nonconsumption augmented by the “jobs to be done” concept. Yes, I know, the germ for this is present in many discussions. “We already talked about bicycles, so we don’t need to revisit the topic.” I beg to differ.

    My first vehicle, which I bought last year, was a foldable electric bike. Unfortunately, I bought a lemon and I was never able to use it for more than a few days in a row. I haven’t missed that bike so much but, to me, it’s more convenient than a Segway or car because I can bring it inside.

    In part because of climate, few Montrealers use bicycles year-round. Despite this, though, there’s a fair bit of bike culture to go around. Bike messengers and their fixies have made an impact. Cooperative bike repair shops are as active as any part of the Maker movement. Bike paths are an important part of the landscape. And the «Tour de l’île» bike run has done a lot to frame cycling as a fun activity, for both families and competitors.

    I find bikes interesting but they only tell part of the story. Living in ATX, I did hear a lot of talk about bikes. This was before Lance Armstrong was fully exposed. At the same time as I heard about bikes, I also fell victim to one of the most pedestrian-hostile contexts I ever saw. The Texas capital really is designed for cars. And I’ve had several discussions about that, with friends who do understand that cars aren’t an absolute necessity for every human being. Problem is, redesigning Austin would be especially difficult. The “Triangle”, which opened while I was there, was inspired by New Urbanism and principles from Jane Jacobs. But the city’s core (from SoCo to campus) is unlikely to ever become pedestrian-friendly. While it’s true that UT’s campus is somewhat pedestrian-friendly, crossing the street to eat at one of the restos just outside of campus is remarkably dangerous.

    Coming back to Montreal… While people don’t bike much, here, there’s quite a number of people who don’t drive much either. For one thing, snowfalls (and snow removal) limit the amount of parking space available in most parts of town. Having to shovel to get their cars out of snowbanks, many drivers curse through much of the winter season. Then, there are some people who take advantage of the underground city and manage to go from home to office in a t-shirt even at −40ºC (aka −40ºF). A city with an elaborate underground system makes a lot of sense, when weather is a factor. It can also be a fairly efficient use of the land (outside of its arable qualities).

    Public transit is often the missing piece in many of these analyses. Sure, people mention it. But there’s the assumption that “obviously” it can’t serve people’s needs. Instead of Google’s selfdriving cars, Lausanne has an automated metro line (as I’m sure other cities do). It’s almost like taking an elevator.

    Telecommuting is another factor. Sure, the issue has been discussed extensively at the turn of the century. But this is the type of transition which takes a long while to happen. There’s a lot of social change happening around telecommuting and we don’t need journos’ reactions to Mayer’s decisions to think about it. “Working from home” has lots of implications in terms of transportation. Along with flexible schedules. And family size. And parenting methods. And gender equality. And disposable income. And status symbols. And socialization contexts. And individualism.

    I’m not exactly arguing that we need more sociologists, here. But, since I teach sociology, I can’t help but think that cars are embedded in a broader social context.

    And speaking of sociology… A concept I like to emphasize is “goal displacement”. We mostly apply it to bureaucracy, with organizations’ roles shifting to self-maintenance. I think we can apply it to car manufacturers and factories. Because they were “too big to fail”, some car manufacturers were given a lease on life despite the fact that they don’t serve the same role, anymore. Because car factories are tooled a certain way, what they produce will maintain certain characteristics.

    These are limits to innovation by incumbents. To survive, these corporations need to produce and sell cars. Even if people don’t need cars, anymore. As people “walk away” (!) from cars, car manufacturers and factories would need to adapt.

    I probably don’t understand the details of “disruptive innovation” deeply enough to propose a model, here. But it sounds to me like the “disruptive technology” to car manufacturing isn’t another kind of car. It may not even be another kind of self-propelled vehicle. But it could address the very significant “new market” represented by car nonconsumption around the Globe. And eventually address the needs of car drivers.

  • KirkBurgess

    Horace, I really think you need to take another look at Tesla.

    Firstly, In the podcast you state that tesla will only produce a few thousand cars a year, when in fact they are in there first year of mass production and have a stated goal of 25,000 cars this year. They are already at a run rate of 500 per week, and are fully profitable on that low amount.

    Secondly, you mention a different approach to building vehicle, I would suggest Tesla is innovating by focusing on producing one type of powertrain (currently the gen 2 powertrain) and this is being used in the model S, and will be used in the sister model X coming nex year. As they perfect the technology, they are learning what is needed to produce the generation 3 powertrain, which is going to be the basis for the tesla “Everyman” car due in 3-4 years at a standard car price.

    Thirdly, Tesla is completely ripping up the rule book on what sort of relationship a person has with a car company.

    - you buy a car direct from Tesla, either from the website or from a tesla owned store.
    - your car is manufactured by tesla based on your customisation
    - your car is delivered by tesla
    - on road trips you top up your car at Tesla Supercharger stations.
    - your car is serviced by tesla service centres
    - your car receives over the air software updates from tesla.
    - if you use the tesla financing option, tesla will buy your car back at a predetermined price

    • Sebi

      And as the lawsuits suggests some people don’t like their direct distribution model, which is always a good indicator for something new and innovative.

    • http://www.asymco.com Horace Dediu

      I was deeply disappointed when Tesla chose to be compliant with the production methods of the industry. They had an opportunity to change more than the engine and to do so for less than 20% of the costs they sunk. I see nothing disruptive about Tesla. An expensive car for rich buyers in rich countries whose purchases are motivated by their need to feel good about their overconsumption. Tesla thought big when they should have thought small.

      • KirkBurgess

        Interesting.

        I would argue that if you want to make a EV car that has anywhere near decent range, you have to make a luxury model since the battery cost is currently in the $30,000-$40,000 range. I think they would fail in the marketplace if they tried to skimp on the costs for all other aspects of the car, seeing as they would still need to retail it for $50,000+ to be profitable. However the same cost battery in the current premium tesla model S models is both attractive to buyers and profitable.

      • Laurent Giroud

        You could also make it smaller, lighter, less generic and more customized by its main user.

        Horace has rightfully argued in previous episodes that motorbikes are essentially killing machines but this is so because they are targeted towards people who expect performance. Constructors sacrifice most other dimensions for it.
        Give them a protecting chassis, a pleasing form factor and computerize them to death, living only the choice of direction and pace to the driver and giving the computer full control of stability/inclination while keeping the driver relatively vertical and they could become a vehicle that non daredevil might want to use instead of a bulky car.

        Scooters for example fill the market for quick and shorts journeys with maximum mobility at low speed in not too dense urban areas (excepted in Italy where they rush through heavy traffic without a second thought). But they are still extremely dangerous and require a very active driving style and are thus reserved to a population who is confident enough in their capacity to master them.

        Make them a little bit roomier, more secure and easier to drive (via heavy computerization) and they become accessible to a way larger segment of the population whose needs are currently only addressed by pavement and public transportation.

        Cars do not necessarily need to have four wheels, as long as they do enough of a good job of replacing a car in domains where cars are overserving and thus inconvenient.

  • neutrino23

    I think Horace touched on a good point when he mentioned how all cars are made with the same tooling. A number of areas have the same inertia.

    Most software is written with some variant of C. ( I understand there are all sorts of special areas using other languages.)

    Look how difficult it was for ARM to become a major CPU.

    Magnetic disk drives have successfully fought off competing technologies for decades.

    It is nt that there have not been challengers. I met several groups trying to introduce new CPUs. There has been a steady stream of new languages introduced. Magnetic bubbles and various optical technics tried to challenge magnetic storage.

    In all these cases it was very hard to change the status quo. You need to have a huge advantage to make up for the difficulty of introducing new technology.

    If you want to promote a new computer language you are up against the millions of people who already know some variant of C. Make a new CPU and you are up against the tens of thousands of designers who can work with established product. Disk drives are now losing out to Flash which is not a new technology but based on the deeply entrenched silicon technology.

  • BoydWaters

    Horace, I challenge your characterization of Enterprise buyers:

    – career on the line for the choices they make
    – decisions based on “jobs to be done”

    I worked in IT for a decade, and I mostly saw just the opposite.

    Famously, Steve Jobs described enterprise customers as “confused”.

    I have viewed the BYOD or “consumerization of IT” in this light.

  • nizy

    Horace, regarding the car manufacturing process and also the design that both leads to it and is also constrained by it, I’d like to point you in the direction of a fascinating documentary. It was produced by Channel 4 in the UK about a decade or so ago and is called Better By Design. It focused on the two leaders of the industrial design consultancy, Seymour Powell on a couple of projects. Most episodes focused on fairly mundane, everyday products like a bra or toilet and the challenges associated with designing it.

    1 episode focused on the design of an electric car for a small Scandinavian company. If I remember correctly it had lots of stuff about the manufacturing constraints and also the safety testing, which ended up governing the design due mostly to the prohibitive cost of the tests. The thing is, this kind of thing is true with the design of most products to some scale. Maybe less severe, but still a constraint on the designer.

    I see that 1 of the episodes is available on 4OD (at least in the UK) but this car episode is not. I do suggest you try and find it as it could help develop your understanding and thoughts in this area. Maybe someone here can find it?

  • http://twitter.com/demigoose Tim Sweetman

    Horace,

    One thing to investigate would be Amory Lovins’s “Hypercar” concept (http://en.wikipedia.org/wiki/Hypercar) – intended to be made from lightweight composites, with the lower weight making exotic powertrains feasible – initially hybrids, but when possible, fuel cells. Composite manufacturing would avoid the need for massive-scale metal pressing plant. Hypercar Inc., however, appear to have “pivoted” around 2004 into more general purpose composite manufacturing.

    Wild guess – it’s very difficult to engineer a good, general purpose, light weight car (or it would have happened already). It could be safety; it could be related to suspension, and many decades of experience in making car suspension predicated on the car being an approximately one-tonne steel box; it could relate to resistance to crosswinds; it could be that, in the highway-speed-cruise regime, weight becomes unimportant relative to air resistance for improving gas mileage.

    It strikes me that there are two things liable to turn the automotive industry on its head: Zipcar, and similar pay-per-use carshare schemes, and Google-style autonomous control and navigation. Zipcar spreads the jobs that cars do between a variety of different shapes of vehicle and mass transportation; autonomous guidance has, ultimately, geographical implications. Conventional cars reshape geography around themselves, spinning retail out into out-of-town big box stores, expanding parking lots, and freeways – not only for the cars themselves, but for the roving volumes of dead space behind each car for safety’s sake. Does a robot car infrastructure resemble London Heathrow’s UltraPRT?

    • Phil Hume

      I too thought of Amory Lovins’ RMI work while listening to this episode of the podcast. The main idea of using carbon fibre and other composites is for reducing weight. But, I wonder if there might be a hidden disruption brewing here. Carbon fiber composites will have a different profile of manufacturing like glue vs. welding, perhaps no paint shop, etc.

      Judging from a quick look at this link, ( http://www.rmi.org/autocomposites ) it seems that the biggest challenge is the fact that the basic body construction and material is not like the traditional manufacturing method outlined by Horace. I wonder if this or other alternate materials ever got traction that we might see a true disruption in the way cars are made and therefore car companies.

      Horace, you might find some of the material at the above link to be interesting in your quest to understand the car marketplace. In particular, there is an interesting chart on page 9 of the ‘Autocomposites Pre-Read’ pdf at the above link.

  • Sebi

    BMW’s i series will be made out of carbon fiber.
    http://www.bmw-i-usa.com/en_us/concept/#the-dawn-of-the-carbon-age

  • Bill Esbenshade

    It seems like the ultimate combination is an inexpensive, customizable, batch production method capable of small production runs, resulting in affordable cars that can be sold in limited volumes.

    I can see how this is done with cheaply produced app television shows (with really low cost structures) but less so with car manufacturing. You note that batch car manufacturing could reduce capital costs, but it seems like it would raise labor costs. And capital costs would still be significant. A company has to recapture these costs somehow, either through higher pricing or higher sales volumes. You’re also losing economies of scale with batch production.

    When I look at companies like Tesla and Apple, I imagine a production process that combines customization and easy configuration with the ability to produce affordable products that can be sold in high volumes (a low-end iPhone, mid-range iPhone, high-end iPhone, low-end Tesla, mid-range Tesla, etc.).

  • Vasco Duarte

    Regarding your comments on the process of producing cars (you mentioned that the process influences the product), you may want to take a look at Wikispeed (http://en.wikipedia.org/wiki/Wikispeed).

    They are creating a highly modular (one of the aspects you discussed in the podcast) 100MPG car.

    The fact that they can create a car like this and not get noticed even by students of the industry raise another question for me: what is needed for a disruption to take hold of a market. You’ve mentioned process (as in manufacturing), but wouldn’t marketing (i.e. how to get noticed?) be a key part of that?

    For example, Apple was already know to a large base of fanatical fans (fan bois) that were actively evangelizing the platform to everyone they could.

  • Kas

    A historical precedent with many similarities is the original VW Beetle. From memory:
    Development
    • The car’s capability requirements vs low target price were considered unrealistic, but demanded by none other than Hitler, so they were ultimately achieved.
    • His requirements were performance-oriented, not market driven (in hindsight, he was specifying a military vehicle)
    • These constraints led to non-standard design decisions. e.g air-cooled rear mounted engine, torsion bar suspension.
    • The factory was purpose-built for the car and was not built by an existing car maker.
    •The factory was paid for with crowd-funding. People who wanted the car bought stamps that went into their savings book. They started years before the car would be produced. When they filled the book, they were eligible for a car. Ironically, the massive factory built only a few thousand cars for the Nazi elite before they began WWII and the factory started producing military versions.

    The Result
    • An affordable car low on features, high on durability and good enough performance.
    • An entry and ultimate success in the 1950′s US car market where it was the antithesis of the ever-larger, finned, chromed and over-serving US-made alternatives of the time. (The award-winning VW USA advertising of the time highlighted and embraced these differences in every ad)
    • In an era where car models were redesigned every year to stimulate sales, the original Beetle design remained unchanged, but was improved functionally each year.
    • Easy to assemble and disassemble, e.g. the body was attached to (and could be easily removed from) the rolling floorpan with 12 bolts. This “modularity” and consistency of the base platform spawned a sub culture/market/eco system of aftermarket customisation of various fibreglass body panels and even complete bodies. It also allowed VW to export the cars unassembled, where they would be assembled in the country in which they were to sell.
    • The Beetle was the opposite of conventional market wisdom and would not have been made by an incumbent, but became the highest selling car model of all time. An indictment on our market economics?

    I am surprised today’s motorcycle manufacturers haven’t been more active in creating a new sub-car category. I’d love a simple, low cost, two seater, open wheeler as a second car.

    • http://twitter.com/LunaticSX Lun Esex

      I can only imagine that the market for that sub-car category would desire features/functionality that would force it over the line from being classed as a motorcycle into being classed as a car, and the motorcycle manufacturers wouldn’t want to deal with that.

      Point of note: I’ve been keeping an eye on the market for the smallest possible mass-produced cars in the U.S. for a number of years (smart fourtwo, Scion iQ, Fiat 500, Mini Cooper, etc.). Historical research shows that since at least the 1970′s small cars in the U.S. always get slightly larger and heavier with successive generations. Some models even cross size categories between when they were introduced and modern versions, or at the point the line was discontinued. The only time any manufacturer actually makes a smaller car for the U.S. is when they introduce a brand new line.

      I would expect if a motorcycle manufacturer were to make a “car” as you describe, it would be something at the very limits of what could still be classed as a motorcycle (weight, engine displacement, etc.). This then wouldn’t give them any room for the inevitable gradual move “up” that I can only guess is the car makers’ response to early model reviews and public feedback.

    • perwis

      Have you seen the Renault Twitzy? Seems about what you are talking about in the last sentence, I saw one in the street, and it looks really nice and useful.