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Heywood 17 (2:26)
Topic(s): Auto Industry / Car Culture / Future Transport
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People often ask, "why does it seem the US auto industry's sort of lost its leadership role?" An important and challenging question. There's a different history. I think in Europe and Japan, there's a tradition of expensive fuels, which leads to smaller cars, which leads to, if you like, more compact technology, small engines that perform well, efficiency, higher on the priority. In the US, historically the emphasis being on really low-cost production. It's a big market. Performance is comparable amongst the competing companies. We compete on price. What we've seen is that if you've got a more appealing, perhaps more sophisticated technology and you're competing on price, you've got a double advantage. So we've seen an erosion of US auto company market share.

I think the US companies have got to get back to competing with the technology and the products. Some of the innovations that have come in from outside are much more rapid model upgrading, replacement, shorter model cycle, model life cycles, life cycles. All of that's coming, but we've got to get ahead of that rather than be sort of lagging and pulled by that. Can we? I think people are motivated, but if you've had a position of dominance and it's slipping, you've got a problem, because you got too many engineers, you've got too many production facilities for the size of your market. That's not going to get better. And downsizing one's organization always lags the downsizing of the market. So tough challenge. If you're growing, okay, you add. But you can moderate the amount you add as a function of how rapidly you're growing. If you're shrinking, you've got to cut. And that's not easy. So a lot of complexities, but they've got to get back to competing on the technology, competing in terms of the attractiveness of the vehicles that they offer, and of course, on price.



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