Sustainable car business: USA's Local Motor

[jpdm]

You dont have to be big to make cars...

[SIZE=3][SIZE=4]Local Motor: A New Kind of Car Company[/SIZE]
[/SIZE]
Through an online outsourcing of design, Local Motors hope to forge anew path for the auto industry




The Rally Fighter will be Local Motors' first vehicle. It goes into production in June 2010





When John B. Rogers was a Marine deployed in Iraq in 2004, he brought a book called Winning the Oil Endgame with him to the Gulf. The book, by environmental activist Amory B. Lovins, discusses how people can end their dependence on fossil fuels. Rogers says reading the volume inspired him to create a new type of car company, one he believes offers a more efficient and effective way of designing, manufacturing, and selling autos.



"I realized it was possible to run an environmentally focused car company in different ways," he says. Most of today's auto entrepreneurs, such as Tesla Motors and A Better Place, focus on alternative fuel sources. But Rogers looked at another way of building a sustainable car business. He imagined he could produce vehicles locally and on demand at "micro-factories," where buyers could watch and even participate in making the car.



This would eliminate wasting resources on mass-producing and shipping cars that might sit unbought on a car dealer's lot. More than that, he wanted to source "dream car" concepts direct from potential buyers, rather than to dictate designs, as the major automakers do.



Having left active duty in the Marines in 2005, Rogers headed to Harvard Business School to study for an MBA and learn how to make his dream a reality. After raising $4 million from unnamed private investors, Local Motors made its official debut in March 2008, with a Web site that calls for designers to submit sketches of their dream cars. Contributors can also enter competitions to come up with ideas for a specific type of vehicle, such as an electric car for the eco-conscious San Francisco Bay Area. The site's online community votes on the designs, with winners chosen by the audience, not Local Motors' employees.



Cash prizes range from $1,500 to $20,000, with over $30,000 awarded to date.
A Community of Designers

By March 2009 there were 2,400 active contributors to the site, uploading drawings, commenting on each others' work, and voting on designs. Today, Rogers says that number has climbed to 4,000. "And if you count our social media channels—our presence on YouTube, Facebook, and Twitter—there are 50 million more people in our community," he adds.



That might sound fanciful, but the company is now gearing up to produce its first vehicle: a rugged-looking, off-road vehicle called the Rally Fighter. The initial concept was posted online by community member Sangho Kim. On seeing the community's enthusiasm for the design, and recognizing that off-road vehicles present an underserved niche market, Local Motors decided to put the car into production. Interested buyers pay $99 for a place in line to purchase it. When production starts, in June 2010, buyers will be invited to the company's headquarters in Wareham, Mass., to help build the car. The eventual price tag? $50,000.



Rogers is confident that his company can eventually turn a profit. "A single Local Motors micro-factory has the capacity to sell 2,000 units a year at an average price of $40,000," he says.



Currently, the Local Motors Web site indicates the tally for Rally Fighter orders is 23, a number that's not exactly likely to trouble any of the Big Three. But Rogers insists he is trying to rethink, rather than overtake, the traditional auto industry.
A Complicated Business

Still, success is far from certain. "Local Motors is an interesting idea in the context of the design of a vehicle. There are real benefits to drawing on a large community of designers; you can come up with truly unique designs and come up with interesting new niches," says Jeremy Anwyl, chief executive of car-buying guide Edmunds.com. "But it gets trickier when you take that notion and move into actually building a car—which is technically very complicated." Not to mention, highly regulated.



Rogers is unfazed. "Building a car is complex, but it is a well-understood science. This is not the challenge," he says. "The challenge is bringing cars to market in a sustainable manner—the cars people want, where they want, when they want. This is what Local Motors accomplishes."


Jana is the Innovation Dept. editor for BusinessWeek.



Taken from:


Innovation

Businessweek
October 28, 2009
by Reena Jana

http://www.businessweek.com/

[kitsons]

You dont have to be big to make cars...

A local land vehicle business here may fare better since Filipinos are not so picky about how the vehicles look but look more on the economy of acquiring and maintaining such vehicles.

The problem is integrating the many different local motor shops as per architect had visions of doing.

Standardizing parts is the main concern t make mass production viable.

[scharnhorst]

A local land vehicle business here may fare better since Filipinos are not so picky about how the vehicles look but look more on the economy of acquiring and maintaining such vehicles.

The problem is integrating the many different local motor shops as per architect had visions of doing.

Standardizing parts is the main concern t make mass production viable.

Depende sa target market. kung businesses, then utility comes first before form.

but for the private car market? haha. facelifts are becoming the norm nowadays for "new" cars

[kitsons]

Depende sa target market. kung businesses, then utility comes first before form.

but for the private car market? haha. facelifts are becoming the norm nowadays for "new" cars

Agree bout facelifts. Don't believe at this point that locally mass produced cars can have any market. Puede pa siguro ang mga one of a kind, ala hobby type of a thing.

[scharnhorst]

Agree bout facelifts. Don't believe at this point that locally mass produced cars can have any market. Puede pa siguro ang mga one of a kind, ala hobby type of a thing.

actually... Local Motor's idea isn't that new. It's similar to the small european supercar makers - low volume, high degree of customization.

I read somewhere in the threads that there's actually some demand for a competent locally manufactured utility vehicle in the provinces... yun nga lang the PhUV designed specifically for that never really took off.

[kitsons]

actually... Local Motor's idea isn't that new. It's similar to the small european supercar makers - low volume, high degree of customization.

I read somewhere in the threads that there's actually some demand for a competent locally manufactured utility vehicle in the provinces... yun nga lang the PhUV designed specifically for that never really took off.

Wonder why that the PHUV designed stuff never took off?

[scharnhorst]

Wonder why that the PHUV designed stuff never took off?

Most glaringly, the protoype itself was a huge disappointment. try to look for the PhUV thread for pictures and the reactions

[ghosthunter]

The prototype was ugly and nothing more than what could have been done by other local makers. And unfortunately it was still inferior to other existing foreign branded reconditioned/surplus/used vehicles that can be bought at the same price.

Of course now I could be accused of having "crab mentality".

[jpdm]

Wonder why that the PHUV designed stuff never took off?

Looking for this?



or me, looks better than a dilapidated jeepney...

[ghosthunter]

Looking for this?



or me, looks better than a dilapidated jeepney...

But comparing that to the mid-1990s Toyota Tamaraw FX:



... the PHUV prototype simply looks too rough and built in the backyard (unfortunately).

Also the PHUV prototype was never meant to replace the jeepney. The PHUV was supposed to replace the Tamaraw FX and similar vehicles like the Crosswind and Adventure.