Despite disruptive ideas from Google and Elon Musk, Bloomberg News says the world’s auto manufacturers feel safe from high tech intrusion because they have all the necessary factories, tooling, and distribution networks in place. How can some Silicon Valley egghead with nothing more than a collection of loopy ideas possibly compete with that?
Easy, says Bloomberg editorial writer Edward Niedermeyer. Apps like Uber, Lyft and ZipCar are fundamentally changing the new car marketplace by offering realistic alternatives to vehicle ownership. In addition, millennials are starting life saddled with an average of $31,000 in student debt, diminishing their enthusiasm for taking on a car loan.
Today’s cars are good, really good, but there is still a certain sameness to them that dulls the spirit and blunts enthusiasm for owning one. He thinks the attitude of millenials toward automobiles in general is summed up by this quote from Neal Pollack, who wrote in AutoBlog recently:
Having a car is a huge, expensive hassle that daily puts you in contact with some of the worst aspects of humanity. You find yourself in the thrall of intractable government bureaucracies, at the mercurial whims of law enforcement, and at the mercy of insurance companies. You’re constantly at risk of getting ripped off by untrustworthy mechanics.
Niedermeyer thinks Tesla and Google have ideas that cut through the humdrum sameness of today’s cars and will reignite passion for automobiles among millenials. To him, Teslas have the same cachet as premium brands from long ago, cars like Duesenberg, Cord and Stutz. Google’s autonomous car he likens to a modern version of the “people’s car” that brought the Ford Model T and Volkswagen Beetle to prominence.
Will Silicon Valley techies be able to upend the business of making automobiles? Niedermeyer believes that most mainstream manufacturers will ignore the changing nature of the car market until it’s too late. Then people like Elon Musk and companies like Google will buy up all those fixed assets the traditional car makers think insulate them from competition at bankruptcy sale pricee, and they will own the future of automobile manufacturing.
Personally, I think Niedermeyer is too dismissive of traditional car companies. Recently Ford Motor Company CEO Bill Ford penned an op-ed piece for the Wall Street Journal in which he seemed very much aware of the changes happening in the auto industry. I don’t think Bill Ford is the only auto executive paying attention to what Tesla, Google and Uber are doing to the marketplace.
Will the world’s car manufacturers be caught napping or will they respond with new models that fit the needs of tomorrow’s drivers? Share your opinion in the comments section.