02 May 2009

Doomed, unless they listen to Rico

The latest sales figures show all the car manufacturers going rapidly downhill, with Chrysler leading the fall.
Rico says he has mentioned this before, but it bears repeating:
The auto industry must change.
The way back from the brink of bankruptcy is to change the way people buy cars, which will mean changing how they sell them.
That will require a lot of reeducation, but the system is simple:
Any dealership need have only a couple of dozen (at most, and maybe less) vehicles on the lot at any one time.
There's one of every basic model, and one in every color, though not necessarily one of every model in every color.
The purchaser drives the cars they're interested in, then sits down with a salesperson and writes up an order for the exact car they want, making choices for every possible accessory, color, and option.
The salesperson sends the order to the factory. The dealer arranges for financing.
The factory makes that car and delivers it to the dealership.
After dealer 'prep', the buyer comes in and picks up their car.
The advantage to this system, which is exactly what Rico used to buy his 1995 Ford Explorer (still running), is that the factory doesn't make hundreds of thousands of vehicles that may or may not sell. No end-of-model-year sales, no leftover cars, no waste, no lost profits.
Rico says they can award him the Nobel Prize for Economics, and he'll be happy to go to Oslo to accept (he has a friend in Norway)...

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