Build-to-Order Cars?

MadMonk writes "Baseline has an article about a new car company that wants to be 'the Dell of the auto industry.' Build-To-Order, Inc. could turn the auto industry on its ear. At worst, BTO will be an interesting technology petri dish. I want a customized car to match my customized computer."

Comments

Huh? That's how it's here in the Netherlands

[Anonymous Coward]

I haven't read the article, but that's how it works here in the Netherlands: you order the color, the engine, the interior color, airco yes/no, RPM meter, etc, etc. That's sounds like more choice than with Dell.

Re:Huh? That's how it's here in the Netherlands

[f97tosc]

You can do that in the USA, too. Virtually any auto maker will build you a car to your specs (options, color, etc.). Since the 1980s the options have been more-or-less bundled, and it's a bitch to order them separated (I want a sunroof but I don't want to pay for fog lights to get it!), but you can do it.

People seem to have missed the point completely. The point isn't that build-to-order enables a bunch of new varieties. Sure, you can still order your favorite color and CD player. The difference is how it is achieved: presently they build a bunch of common varieties. If you want an unusual combination, they will make sure that it is included in the next shipment (or possibly even build it for you).

The difference with build-to-order is that cars are only made if they are ordered. This has the potential of lower car costs, because you minimize the losses of the varieites that stand unsold, and the ones that have to be shipped from one area to another.

I don't see how this company is going to overcome the public's desire for instant gratification. Pick a car, drive it home today.

This is a good point. I think the answer is money. If I could get a car at say $500 or $1000 cheaper (which may be achievable with the new business model), I would probably be willing to wait with the gratification for a week or two.

Tor

Why won't the big automakers do this?

[weave]

I've never understood, with just-in-time parts delivery at plants, why auto makers can't or don't do this. Why can't I go to their website and pick out my colors and options and have it built and delivered to my dealer a few weeks later?

Some automaker sites have a "build my car" page where you pick what you want, then they do an inventory search and list some that are close as possible to what you want.

If you go to a dealer and ask to have a special order, they get pretty upset. I guess this is understandable since they really want to move the inventory off their lot instead.

But seriously, it's the inventory sitting around that's the big money drainer on a business like this. If they can radically reduce inventory and also reduce the time from manufacture to customer, it means less inventory carrying expense and happier customers.

Re:Why won't the big automakers do this?

[squiggleslash]

One word: Bollocks.

I work in the automotive industry. I can tell you right off why they never try anything radical and new: size.

Car manufacturing is a complex beast. You have factories churning out huge, unstorable, and expensive metal boxes. These are assembled from the output of similar factories producting smaller metal units. Everything has to work perfectly for a car company to stay afloat: it has to receive every part in a timely manner. The factories have to use these up quickly enough not to require large amounts of warehousing. And, and here's the kicker, the cars have to be shipped to dealers and then sold at the same rate as the factory is producing them.

Every time a large automotive manufacturer puts out a new model, it's taking hundreds of risks. The factories will have to be retooled - what if the parts don't actually fit together? What if there's a technical flaw with the car? The marketing has to hit the right audience, what if too few or too many people buy it?

It's not the computer industry. You can't just shove all the unsold items in a large room somewhere, flog them cheap, and then bury the remainder in Arizona, Nevada, or New Mexico. Nor can you easily and responsively tune the factories to consumer demand, because it's not just a matter of switching off a metal press, you also have to deal with the fact that there are physical ships in the oceans with half your cars in them, and they're not going to turn around and take the parts back to where they came from.

Can you think of any other industry that deals with consumer items of this scale, quantity, and size?

Given all of this, you can probably imagine that one phrase governs the outlook of virtually all but the smallest of car companies: risk aversion. New technologies are only incrementally introduced. New types of vehicle are rarely introduced (even the minivan's potential could be judged by Chrysler by comparing it to things like the VW mini-bus), "radical" changes tend to be with look rather than functionality. Ford and GM's marketing and manufacturing departments want to be able to predict how successful a car will be, and the more radical the product, the less able they are to do this.

I have no idea where you put unions into all of this. Unions are merely concerned with making sure their members don't get a raw deal. Producing new products, and hence creating more jobs, doesn't do their members any harm. This is purely a management issue, and an understandable management issue: the possibility of Ford or GM going from being massively profitable one year, to bankrupt the next, is not non-existant. A major slip up can cause this. Which is why, when you see manufacturers playing with anything new at all, you usually see them in small quantities, with little or no marketing.

I've read the article. Here's a summary.

[jhoffoss]

They build you a car. It is highly customizable. You can choose things like Ralph Lauren seats, pretty much any radio on the market, , etc. There will also be multiple vendors for the same parts. So maybe Tommy Hilfiger seats too, or something along those lines. And you will purchase, configure, and finance the car online. So as others have said, this is NOT the Dell of automakers. This is the white-box PC store of automakers.

Good!

[JoeShmoe]

I'm so sick of car makers picking the most idiodic interior/exterior color combinations. Beige leather, ick! Why is that so often matched with the blue exterior I want? Why can you only get black leather when you get a boring black exterior?

Also burlwood. I f'ing hate burlwood. Yet almost every top of the line vehicle (Acura, Lexus, etc) slathers it over every surface. Why do the cheapeast Honda Civic have metal or carbon-fiber interior options yet no options on the high end?

When I bought my car, I actually told my dealer I wouldn't mind waiting a month if I could get a specific combination right from the factory. I was even willing to pay transportation. I was told it was impossible. It's no more work for the factory to put one color in place of another, so I'm glad someone finally realized this and is offering the option.

- JoeShmoe
.

Free million dollar idea

[frovingslosh]

OK, built to order cars. You can pretty much do that now, although he seems to be intent on giving more choices.

But if he's really going to try to do something new in the industry, as well a greatly increase the ability to build cards to "spec", I would suggest he seriously consider rethinking the way that car electronics mount and interconnect. I think it's insane the way dashboards are built today, and I'm not crazy about how hard it is to change a radio or install something extra like my ham radio. What the industry really needs is someone not trying hard to lock the customer in, but rather making things much more modular so the customer has the greatest number of choices. I would love to see a system where the instrument pannel, radio, gps/map, and any other electronics (including the computer) are all standaridized "rack" units networked and powered together, such that any device can be located anywhere in the system. If I want a bigger spedometer and tack, I should just be able to plug it into a couple of rack unit spaces. If I want my moving map right in the middle of my dash I just move the speedometer over (or maybe replace it with one integrated into the oil pressure / alternator / warning lights/ trip computer display) and put the video module where the speedometer was. If I get a ham radio made for this technology it should fit into an available bay and cleanly integrate with the rest of the car audio, letting me hear it through the speakers and optionally muting the CD player when there is radio traffic.

Eventually I would see this leading to "soft" displays, where you can use a pannel for whatever you want, speedometer, tach, warning lights, trip computer, or any new feature you program into a flexiable computer. True button switch pannels could be used, or touch screens that reconfigure themselves as needed, depending on the user's preference. Users could even elect, if they wished, to replace a digital speedometer with a white analog needle module (with appropriate electronics in the module) if they prefer that style of instrument over digital displays.

Sure, major players are not doing this now because they want to lock you into their stuff. But a modular system should give a truly flexiable design, lower overall costs, and much great utility. If someone is going to claim to want to make build to order cars, them this approach should be a must.