Sergio Marchionne, the late CEO of FCA (Fiat Chrysler) criticised the car industry, highlighting its inefficiency and reluctance to adopt new technology which ultimately impacted profitability. He championed greater cooperation to reduce duplicated spending.
But like Ignaz Semmelweis, his insight was ignored. Cooperation requires compromise and that isn't a quality that gets industry leaders to the top. Their modus operandi is do it my way because compromise is weakness and we don't need to do it anyway.
Whatever the reasons, it wasn't considered necessary to cooperative beyond sharing an engine or two and the odd fringe model. But the existing way of doing things is ponderous and wastefully burns cash. No one was really pressuring them to change as long as everyone did the same.
Things have moved quickly. The Chinese have finally got themselves sorted and they have things in their favour. A protected home market. High levels of tech included in the cars. Subsidized manufacturing. Control over key battery materials. Faster vehicle development times. Quickly implementing change when feedback showed where improvements were needed.
The less efficient and complacent legacy car manufacturers are being found out. They are cooperating more and will have to speed that up. Some of the larger car manufacturers already have cost sharing within their assorted brands but that might not be enough.
Companies like JLR don't have that option. They wouldn't consider cooperating with model sharing for Jaguar. Try buying one now to see how foolish that stance was. Land Rover will soon be hunted by a proliferation of Chinese models and I wonder how they will survive that.
In times of change, relying on past experience is often your worst enemy. Clinging to outdated methods rather than adapt can be fatal.
Past success doesn't guarantee future success, neither does a well respected brand name. The latter helps but only to a point.
The writing was on the wall and it's become a reality. Now's the time to be smart or be gone. That's the choice, but is it already too late for some?
Photos: Soueast S05 above and Geely Galaxy Cruiser below (looks familiar?)
