Remaking the auto industry

I don't understand why the auto industry has continued on this slow march into oblivion. I don't understand why there is any political will to help perpetuate this sick industry? The industry executives promised Congress a plan to fix the problem, but what did they give them? Minor tweaks to product lines. You can't fix a failing industry with small tweaks, it requires big changes.

Since the auto executives don't have the imagination to offer up anything big I will throw out something. Support it, laugh at it, do what you will. If nothing else, it offers something truly different.

The Problem: Profitability in the auto industry is tied to new vehicle sales. As a result, the car industry is constantly trying to convince us to buy new cars. To keep consumption up, the auto industry tries to keep prices low (granted, they're not very good at it). To keep prices low they use the least expensive materials possible. In this system, the auto industry has an incentive to design obsolescence into the car. I don't have evidence for it, but the word from the rumor mill is that a typical car is designed for 100,000 miles. The average person will drive more than 700,000 miles in a lifetime.

Why is this a problem? First, it creates waste. All those old cars eventually make it to scrap piles, and new iron, oil, etc... must be harvested to make new cars. Second, the materials and engineering needed to make significant gains in efficiency without sacrificing performance are very expensive. It is unrealistic to think the average person will be able to spend $100,000+ on a vehicle that might last ten years.

So what is the auto industry to do? To fix the auto industry we will have to change the revenue stream from a sales driven model to a value or transportation driven model. We have to create the incentives for the industry to focus on providing high value, not low cost, e.g. long-lasting vehicles designed to meet the challenges of today, not those of the 1950s. We would also have to recognize and respect the personal relationship people have with their cars. I believe we can do this while improving our standard of life.

A proposed solution:

1. Design vehicles (engines, frames, suspensions, etc...) to last a very long time (40+ years).
2. Separate vehicle design into two major components (the drive frame and the coach).
3. Abandon the idea of personal vehicle ownership.

In my proposed system, all vehicles are leased from the manufacturer. In return, the manufacturer performs all maintenance and guarantees the vehicle will always be maintained at factory standards. However, the coach would be designed as a separate "bolt on" component which could be owned by the driver. This isn't very radical; it is similar to the way cars were originally made. With a two component system, maintenance would be a breeze:

• The driver would pull into the local maintenance facility (a lot like a car wash)
• The coach would be lifted from the drive frame
• Then the coach would be dropped onto a new drive frame
• The driver leaves to do... whatever
• Maintenance on the drive frame is performed without impact to the customer.
• Maintenance cost is built into the lease. So there is no additional charge to the driver.
• Maintenance time drops to 5 or 10 minutes, and you don't even have to get out of the car.

This maintenance would be provided by the local car dealer (transformed from an unpleasant sales organization to the frontline maintenance provider, backed up by regional maintenance facility.

In this system, the auto manufacturer derives income from a continued relationship with the driver. The only way to keep that relationship is to provide high value and quality of service. Further, auto manufacturers would have an incentive to make cars last, which would require fewer resources. A longer car life also has the benefit of allowing the manufacturer to amortize the cost of expensive materials like carbon fiber over an extended period. Such materials could significantly increase car efficiency. The customer benefits from having a predictable expense, eliminating the need to maintain the car, and improved quality of service (one would hope). If the coach design was based on a standard that ensured portability you could easily switch from one transportation provider to another, while keeping your personal coach.

This system would also allow flexibility that can never be achieved in the current system. For instance, if you lived in the city you could lease a car with an electric drive frame. City driving is well suited to electric cars. Then, when you decide to take a nice long trip up the coast, you could switch out your electric frame for a gas/diesel/natural gas frame. When you return from your trip you would slip back into your electric frame. As new technologies are introduced, new drive frames can be built without negative impact to the customer. The old drive frames can be retooled for the new technology.

I admit the approach is not without pain points. Any significant change requires adjustment, and some sectors will be hurt. If such a system were ever realized it would mean the end of the local repair shop. Depending on your mechanic this might be good or bad. Another result would be that fewer cars would have to be built, which would result in a reduction in the number of automotive plants and employees.

Our disposable lifestyle has moved us from the high quality approach of our grandparents. It has led to waste, and the abdication of our place as the world's primary creator of wealth. Refocusing the auto industry toward high value, and real dependability could be the first step toward reversing that trend.