automotive_industry   128

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Ikea dismantles tradition to seek inspiration from car industry
October 2, 2019 | Financial Times Richard Milne in Oslo.

Sometimes the complexity of their own companies can surprise top managers. Torbjorn Loof, chief executive of the owner of the Ikea brand, looks wide-eyed as he describes how the furniture retailer has nearly 100 different cabinets, sometimes with only 4-5 millimetres difference between models.

In storage solutions it has Pax wardrobes, Godmorgon bathroom cabinets, Metod in the kitchen and Besta in the living room — similar products but with subtly different heights or widths, making things difficult not just for the customer but also for Ikea itself.

So the world’s largest furniture retailer has looked to the car industry for inspiration. Platforms have dramatically changed the process of making cars — different models with vastly different pricing can be built on the same basic chassis. Changes are made between models on the things customers see — like the dashboard and entertainment systems — but much of the back-end that is invisible to drivers can be common.

Now Ikea is looking to bring platforms into home furnishing....Ikea is experimenting with city-centre and smaller shops as well as services such as home delivery and assembly. It is looking into renting out furniture instead of selling it, and smart home technology that brings it up against Silicon Valley.

Its platform initiative is one of its most important, albeit largely invisible to customers. Much still remains to be worked out such as just how much is common between different products — a dilemma recognisable from the car industry where Volkswagen faced complaints that there was little difference between VW and Skoda models except for the price.....standardisation should lead to lower prices for both it and customers. ....“How can we scale up in an efficient way? It’s difficult if we make each product uniquely. With platforms, it’s easier to adjust to new markets,” ...The new approach is not without risks though. Developing new platforms can be a costly business and in the car industry has often led to just as much complexity as before, particularly in companies like VW that are known for overengineering their vehicles, or confusion among consumers as to how big a difference there is between supposedly rival products.

Mr Loof is aware of the problem. “We need to define what makes sense to have on the platform and what not,” he says. “If you go too far you can arguably say you have decreased your range offer.”....for the furniture group, facing the same rapid changes in the retail landscape that have caused dozens of brands to fail, there is a feeling that it needs to do as much as it can even if it is likely to have failures on the way.
automotive_industry  CEOs  complexity  furniture  home_furnishing  Ikea  inspiration  platforms  retailers  risks  small_spaces  standardization  Torbjörn_Lööf 
9 weeks ago by jerryking
Lee Iacocca, car executive, 1924-2019
July 2, 2019 | Financial Times | by Kenneth Gooding 14 HOURS AGO
'80s  automotive_industry  CEOs  Chrysler  Detroit  Ford  obituaries 
july 2019 by jerryking
Robotaxis: can automakers catch up with Google in driverless cars?
January 31, 2019 | Financial Times | by Patrick McGee.

A new network of small tech companies could allow the car industry to compete with Waymo.

The automotive industry is among the most capital-intensive in the world: If the economy sours, assets turn into liabilities overnight as factories churning out thousands of cars begin to haemorrhage cash. So when toxic mortgage securities blew up in 2008, causing a recession, banks performed terribly — but carmakers fared even worse.

That is what makes auto consultants at Bain so worried. They fear that carmakers are about to be hit with a one-two punch: first, they project a US recession in the next 12 to 18 months. Then, increasing numbers of baby boomers will retire, causing a structural decline so big that, they warn, US car sales could shrink from more than 17m last year to just 11.5m by 2025 — the same level seen in 2008-09, which caused GM and Chrysler to go bankrupt and Ford to suffer a $14.6bn loss.....But there is hope. If carmakers play their cards right, they could be saved by what GM has called “the biggest business opportunity since the internet”. The potential saviour is the rise of shared, driverless “robotaxis”, which Bain expects to become mainstream in some large cities in six to eight years. This new market, virtually non-existent today, promises to be huge. ... Intel projects a “passenger economy” worth $7tn by 2050....Car brands typically earn $2,000 from a vehicle sale. That is just $0.01 per km over the lifetime of a vehicle, whereas for robotaxis “the potential is 20 to 25 cents per km”,...To realise this potential the industry will need to update its entire business model. The challenge for carmakers is to gain the expertise in self-driving algorithms, in-car entertainment, streaming services and fleet management for ride-hailing that will be central to this new era......Luckily, there has been an explosion of small companies developing the skills and technologies that carmakers can make use of. .......Waymo, the Alphabet self-driving unit that began as a Google project, is widely seen as the leader in this new landscape....it has built a commanding lead since its founding in 2009. And with at least 600 of its vehicles driving more than 25,000 miles a day, it is perfecting its algorithms in a way that could blindside the competition. Last year UBS projected that Waymo “will dominate” the operating systems for autonomous vehicles, taking “60 per cent of the total projected revenue pool in 2030”.......The threat of Waymo is not that it will build better cars. It has no need to. Instead it is ordering vehicles from Chrysler and Jaguar — effectively turning them into suppliers — and then fitting them out with self-driving software and hardware built in-house. But its potential goes beyond superior self-driving capabilities. Once robotaxis are mainstream, Alphabet can collect data from Google Maps and Search, entertain with YouTube and the Play Store, offer advice through Google Home smart speakers and use its software knowhow to manage fleets. Aside from the vehicle itself, Waymo is a vertically-integrated “closed system”........Carmakers are responding by partnering up like never before and making big investments to acquire new expertise. Volkswagen has linked up with Ford, while arch-rivals BMW and Mercedes have pooled their mobility efforts. In 2016 GM paid $500m for a stake in Lyft, the ride-hailing group, and it spent more than $1bn to buy Cruise, a self-driving company.......These deals, however, are merely the tip of the iceberg. Beneath the car brands, an entire ecosystem of niche companies has spurred into existence. Known as the “data value chain”, these groups specialise in the software, sensors, data processing and navigation needed to make autonomous cars a reality. None has the willpower, resources or vision to take on Waymo. Instead, they are forming clusters, exercising “swarm intelligence” to independently work towards the same collective goal of creating a safe, driverless experience......The implications of this ecosystem are profound. It suggests the carmakers can catch the likes of Waymo up without being the best-in-class in the new technologies. They merely need to be competent enough to know who is best — and then partner with them.
Alphabet  automotive_industry  automobile  autonomous_vehicles  Bain  blindsided  capital-intensity  GM  Google  large_markets  partnerships  supply_chains  Waymo 
january 2019 by jerryking
Dyson shifts HQ to Singapore to focus on cars
January 23, 2019 | Financial Times Michael Pooler and Peter Campbell in London and Stefania Palma in Hong Kong.

Move by billionaire’s business reflects strategy to be closer to customers and manufacturing centres....James Dyson’s decision to move his business headquarters to the other side of the world struck an odd note.

The switch to Singapore comes at a crucial juncture for his company, which is seeking to evolve from a household appliance brand to a manufacturer of electric vehicles. It is nothing short of his greatest gamble, which could secure his legacy or risk his fortune.....Dyson said it was simply for commercial reasons because most of its customers and all its manufacturing operations are in Asia, and to give management supervision over the construction of a car factory in Singapore that will be its largest investment to date......“This is to do with making sure we future-proof [the company],”......“What we’ve seen in the last few years is an acceleration of opportunities to grow from a revenue perspective in Asia.”......Dyson CEO, Jim Rowan insisted that the HQ move was not a bad omen for the UK, where Dyson ceased manufacturing in 2003, and pledged it would enlarge its 4,800-strong workforce there. “We’ll continue to invest in the UK,” said Mr Rowan, pointing out a proposed £350m expansion to one of two research and development centres in Wiltshire, south-west England, for autonomous vehicle testing.......far more likely that the move is linked to Dyson’s latest, and boldest, venture — its £2bn drive to break into the automotive arena. It has developed a UK site to test the vehicles, but also plans to expand its Singaporean research and development facilities, a sign that future vehicle work will take place closer to the manufacturing sites.....The company spreads its intellectual property around the globe, with about 1,500 of its 5,000 patents registered in the UK, according to data from patent research group Cipher. “Clearly if you have new business like cars that will generate significant IP,”.....A Dyson spokesman said the company had no intention of moving its current UK patents to Singapore.
Asia  automotive_industry  autonomous_vehicles  Brexit  Dyson  electric_cars  engineering  future-proofing  head_offices  intellectual_property  James_Dyson  manufacturers  patents  relocation  Singapore 
january 2019 by jerryking
Waymo’s driverless taxis are not free of labour costs
December 10, 2018 | Financial Times | Ashley Nunes.

After years of work, Waymo — Alphabet’s self-driving subsidiary — has finally unveiled its driverless taxi service. Dubbed Waymo One, it is available to locals in some Arizona suburbs. ....Competitors including Ford, General Motors and Mercedes hold similar aspirations. All three are expected to launch robotaxi services. For now, Waymo is leading and equity analysts are cheering.....A bigger problem for Waymo is its pricing. The company says fares are competitive with ride-hailing apps Uber and Lyft. However, they are lossmaking enterprises that rely on investors to subsidise fares. Self-driving technology is expected to change this by eliminating the cost of human drivers. But there is a problem. Waymo’s driverless cars arguably use even more human capital than the manned set-up employed by Uber and Lyft.

First, there is the safety driver. Every Waymo robotaxi has one. The company says these individuals, “supervise vehicles for riders’ comfort and convenience”. Additional support personnel are also on hand to answer rider queries — things like: “What if I want to change my destination during the trip?” There is also the fleet response team — a dedicated group of Waymo engineers whose job is to solve vexing road problems, such as what to do when a lane is blocked.
Alphabet  automotive_industry  autonomous_vehicles  Google  taxis  Waymo 
december 2018 by jerryking
Globalised business is a US security issue | Financial Times
Rana Foroohar YESTERDAY

there is a much broader group of people in both the public and the private sector who would like to reverse the economic integration of China and the US for strategic reasons..... a two-day event sponsored late last month by the National Defense University, which brings together military and civilian leaders to discuss the big challenges of the day. Dozens of experts, government officials, and business leaders gathered to talk about the decline in the post-second world war order, the rise of China, and how the US could strengthen its manufacturing and defence industries. The goal would be to create resilient supply chains that could withstand not just a trade war, but an actual war......“If you accept as your starting point that we are in a great power struggle [with China and Russia], then you have to think about securing the innovation base, making viable the industrial base, and scaling it all,”....Included on the event’s reading list was Freedom’s Forge, which outlines the role that US business — notably carmakers — played in gearing up the US for war in the early 1940s. At that time, because of the depth and breadth of the auto industry’s manufacturing and logistical might, the sector was viewed as being just as important to national security as steel and aluminium.

That is not to say the US security community is pro-tariffs or trade war .... But there is a growing group of thoughtful people who believe that American national security interests will require a forcible untangling of the investment and supply chain links between the US and China. They point to high-tech areas like artificial intelligence, robotics, autonomous vehicles, virtual reality, financial technology and biotech as important not only to the military but also for private sector growth.....While America’s military is still figuring out how make sure its supply chains are not controlled by strategic adversaries, the Chinese have played a much more sophisticated long game. The difference can be summed up in two words: industrial policy. China has one. The US doesn’t. The US has always steered away from a formal policy because critics see it as the government “picking winners”. But the Chinese don’t so much pick winners as use a co-ordinated approach to harnessing the technologies they need. They do it not only through investments and acquisitions but also through forced joint ventures, industrial espionage, and cybertheft [jk: predatory practices].....many multinationals were shortening their supply chains even before the current trade conflicts.

It is a trend that will probably speed up. Multinational companies, much more than domestically focused ones, will suffer collateral damage from tariffs. They will also be a major target of Chinese backlash. Anecdotally, this is already leading some groups to shift production from China to other countries, like Vietnam. If the military-industrial complex in the US has its way, those supply chains might move even closer to home.
adversaries  anecdotal  automotive_industry  books  China  China_rising  collateral_damage  co-ordinated_approaches  cybertheft  economic_integration  industrial_espionage  industrial_policies  military-industrial_complex  multinationals  predatory_practices  Rana_Foroohar  WWII  security_&_intelligence  supply_chains  trade_wars  U.S.  U.S.-China_relations 
july 2018 by jerryking
NAFTA is dead and Canada should move on
June 2, 2018 | The Globe and Mail | by PETER DONOLO.

So what is our Plan B?

It obviously means seriously and aggressively pursuing markets and investment beyond the U.S. For example, new markets for Canadian resources are now more important than ever. That’s why the government’s decision this week to effectively nationalize the Trans Mountain Pipeline in order to finally get it built and deliver oil to Asia-bound tankers was such an important step. This decision in itself was a significant response to an unreliable American partner, and a signal that we must look farther abroad for greater economic opportunity.

The same goes for the myriad of trade agreements on which our country has embarked – most prominently the Canada-EU trade agreement and the Trans-Pacific Partnership. The GATT and WTO breakthroughs of the 1990s also work in Canada’s favour, providing us with tariffs much lower than existed before NAFTA and the original Canada-U.S. free-trade agreement. If NAFTA were to cease tomorrow, our trade with the U.S. would still operate under the WTO’s rules.

Finally, we need to redouble efforts to attract direct foreign investment into Canada. The government recently launched a new agency, Invest in Canada, to do just that. But there are obstacles. The Business Council of Canada cites the regulatory burden as the biggest challenge. In a globalized economy, tax competitiveness is always an issue. And governments need to walk the walk when it comes to opening up to investors from countries such as China, even when there is domestic political blowback.

The only negotiating stance that works against Donald Trump is the ability and willingness to walk away. Mr. Trump sniffs out weakness or desperation – in a friend or a foe – and he pounces without mercy. A defensive crouch is the wrong position. “Sauve qui peut” is the wrong rallying cry. Negotiating with strength, from strength, is the only approach.
beyondtheU.S.  automotive_industry  crossborder  Donald_Trump  FDI  Nafta  negotiations  Plan_B  oil_industry  protectionism  tariffs  TPP  Trans_Mountain_Pipeline  pipelines  global_economy 
june 2018 by jerryking
Ford CEO: Decision-Making ‘Shot Clock’ Needed to Accelerate Plans - WSJ
By Christina Rogers
Updated June 30, 2017

Ford Motor Co.’s new Chief Executive Jim Hackett is enforcing a “shot clock” on lingering decisions at the auto maker to put plans into action faster and regain competitive footing in vital segments of the car business.

Mr. Hackett, speaking to analysts this week, rolled out the shot-clock idea—which is borrowed from a rule employed in basketball to quicken the pace of the game—as part of his agenda for the first 100 days in a job he took over in May. He spoke Thursday with Wall Street analysts, the first such meeting for Ford’s new chief as he confronts an underperforming stock price.

The company has been widely criticized for appearing indecisive on important technology bets, including self-driving cars or electric vehicles.

In addition to setting firmer deadlines on decisions, Mr. Hackett said he plans to focus on costs, according to analysts’ reports recounting the event. He wants to move faster to target weaknesses in the business, such as slumping U.S. sedan sales.......Ford is now investing in autonomous-vehicle research, including taking financial stakes in startups, and is spending more than $4 billion to improve its electric-car lineup.
operational_tempo  decision_making  Jim_Hackett  Ford  automotive_industry  electric_cars  autonomous_vehicles  accelerated_lifecycles  clock_speed  indecision  shot_clock 
june 2017 by jerryking
The End of Car Ownership - WSJ
By Tim Higgins
June 20, 2017

Thanks to ride sharing and the looming introduction of self-driving vehicles, the entire model of car ownership is being upended—and very soon may not look anything like it has for the past century.

Drivers, for instance, may no longer be drivers, relying instead on hailing a driverless car on demand, and if they do decide to buy, they will likely share the vehicle—by renting it out to other people when it isn’t in use.

Auto makers, meanwhile, already are looking for ways to sustain their business as fewer people make a long-term commitment to a car.

And startups will spring up to develop services that this new ownership model demands—perhaps even create whole new industries around self-driving cars and ride sharing.

**Drivers: No more permanent arrangements**
The business of ride sharing may take on some new forms. Startups such as Los Angeles-based Faraday Future envision selling subscriptions to a vehicle (e.g. a certain number of hours a day, on a regular schedule for a fixed price).....Other companies are experimenting with the idea of allowing drivers to access more than just one kind of vehicle through a subscription.....Elon Musk has hinted that he’s preparing to create a network of Tesla owners that could rent out their self-driving cars to make money....Companies are already looking at how to market vehicles to overcome some of the possible psychological resistance to nonownership. Waymo, the self-driving tech unit of Google parent Alphabet Inc., has begun public trials of self-driving minivans in Phoenix for select users, with the eventual goal of testing them with hundreds of families.

**Big auto makers: Making peace with on-demand services**
As a result of both driverless cars and fleets of robot taxis, sales of conventionally purchased automobiles may likely drop. What’s more, because autonomous cars will likely be designed to be on the road longer with easily upgradable or replaceable parts, the results could be devastating to auto makers that have built businesses around two-car households buying new vehicles regularly. Currently, cars get replaced every 60 months on average...to get drivers to buy a vehicle of their own is to help owners rent out their vehicles,....GM is hedging all bets, investing in autonomous vehicles, Lyft, a car sharing service (Maven) and allowing Cadillac customers the ability to subscribe to ownership.

**New businesses: Helping to power a new industry**
....Autonomous vehicles could ultimately free up more than 250 million hours of consumers’ commuting time a year, unlocking a new so-called passenger economy, .....turn away from using the exterior of the vehicle as a selling point and focusing on making the interior as comfortable and loaded with features as possible.... turning cars into living rooms on wheels:.....Design firms will also cook up features designed to ease people into the practice of sharing rides regularly (with strangers).....allowing cars recognize to passengers’ digital profiles and become more responsive to their needs (caledaring, eating habits, etc.)....Existing industries may change to support an autonomous, shared future. For instance, the alcohol industry might see a rise in drinks consumed weekly with customers not having to worry about driving home,....Managing autonomous car fleets may be a new line of business for dealerships
automotive_industry  automobile  on-demand  autonomous_vehicles  end_of_ownership  Waymo  Tesla  sharing_economy  ride_sharing  start_ups  transportation  ownership  accessibility  Zoox  dealerships  Lyft  Maven  Reachnow  Getaround  subscriptions  Faraday  passenger_economy  connected_cars 
june 2017 by jerryking

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