My thoughts on making American Auto Manufactures viable again

[liberal N proud]

This is just a thought I had about the auto manufactures and being viable. Doubt that any corporation today would consider this business model or that the consumer would accept it.

What has hurt the auto industry in this recession is inventory. There are too many cars, trucks and suv's sitting on dealer lots and at the factories. They kept building cars even when they were not selling them.

Also, at one time, consumers could special order any vehicle they wanted. My father did it for years. He would go visit the dealer, they would sit down go through the list of options and select the ones they wanted. The price was negotiated and the car was ordered. The factory would get the order, make the car and ship it.

For the last 30 years, you only had the options of what cars were on the lot or what the dealer could find in inventory, not much else.

Here is what the car companies could consider to become viable:

Return to the special order days and through this LEAN Business Practices out the window, you can have any vehicle you want with any options you want (not this packages of options offered now).

You could purchase any car with any option. Like days of old, you would go visit the dealer, he would have a couple of each model, one in the showroom and one to test drive. These cars would probably be the fully loaded version since they are trying to sell the cars.

Once you settled on the model you wanted you would sit down either with the sales person or a computer kiosk and select your options including color. That done, you would negotiate the price with the dealer and submit the order. In todays electronic world, the order would be submitted electronically to the factory where that model is being built. The customer would be given an estimated delivery date.

The factory would begin the process of procuring the parts immediately upon receipt of the order. Some parts may be stocked, others may need to be ordered from the supplier. Assembly of parts on hand could begin immediately if the manufacturing schedule permits.

When car is assembled, it is shipped immediately to the dealer or the customer could make arrangements to pick up the vehicle themselves from the factory. They could make a big deal out it, some customers would participate for the thrill. Customer pickup would eliminate the delivery cost.

No cars would be built unless there was an order from a dealer. Dealers could order cars themselves but then they would own the vehicle, not the manufacture.

It could mean less production as the lines would only run if there was an order. No huge inventory tying up capital.

[One_Life_To_Give]

1. Done as recently as 2000

When I bought my Chevy Pickup in late 99 it was custom ordered from the factory. Specified Axel ratio's, mirrors, etc. Most items were available either individually or as part of a package.

In essence what you describe makes sense. But it also appears the sales leans heavily on almost an impulse buying mentality.

[HamdenRice]

2. Funny thing is, that model is what was alleged to have killed the industry in the 70s

My college roomate became a hot shot management consultant. One of his first assignments was to work on a team looking at the auto industry (early 80s).

Their conclusion was that the cost of complexity was their downfall -- especially the custom order system.

So while there may be advantages, I doubt they'll try that again.

[liberal N proud]

3. The industry claimed they had to be like the Japanese

I remember when it happened.

But you are correct, they would never do it again, the "LEAN Business culture" dictates otherwise.