Agassi talks up a Better Place

You may remember my earlier posts on the Better Place electric car scheme (1, 2, & 3). Well, now that WordPress allow us bloggers to insert videos from TED easily, I thought I’d share an 18 min vid presentation from Better Place founder Shai Agassi:

He does a great job of outlining the economics of his model, and addresses some of the typical objections to this idea. He continues to highlight the linkages needed (between his firm, auto manufacturers, techologists, governments etc.). Let’s hope (for his sake, and perhaps ours) these cooperative endeavours continue.

And he mentions Australia…

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Volvo to head East?

A fascinating prospect has emerged from the drawn-out demise of Ford’s international network of operations (and perhaps the firm itself). It seems they may sell their Volvo business to a Chinese suitor.

In an auto world where consolidation is the buzz word for all, a major international play from the overpopulated Chinese manufacturing sector was only a matter of time. This would give Geely a huge boost in size. They will more than double in size immediately.

Picking up Volvo for a pittance is surely attractive, especially given the Swedish firm’s competencies in safety and design. It will allow Geely to learn very quickly about exporting vehicles into developed markets (something which is still pretty rare for Chinese auto manufacturers).

The huge challenge will be extracting the Volvo manaufacturing out of Sweden, untangling labour relations and trying to transplant what is surely a very advanced production facility into an unfamiliar environment.

This takeover is being compared with Tata’s acquisition of Rover. The big difference is that Geely is unlikely to be paying substantially over the money for the assets. This is yet more evidence of businesses going cheapin the current crisis.

Picking winners in tough times

One of the more curious emergent industries to spring up from the current economic downturn is storage facilities for unsold new cars. As The Age reports, landowners are benefitting from the excess supply of vehicles and the need to park them somewhere in the interim:

“Each car costs a car-maker between $1.20 and $2.50 a day to store. With one source putting the number of vehicles in storage throughout Australia at 100,000, the industry is potentially racking up almost $2 million each week.”

Australia is far from alone in seeing such stockpiling. Nice to see someone making some money out it…

More on income elasticity – wanna buy a Bentley?

I am starting to think that my fixation (see 1 and 2) on products suffering in the current frosty economic climate might well be case of schadenfreude. But I soldier on…

Now another likely candidate is getting attention – premium and luxury cars. It seems the market for such vehicles is proving fairly inhospitable, as manufacturers cut prices in the face of lower demand and more testing finance requirements. This has flowed on to the second-hand market too.

Unlike champagne and fancy shirts, cars are not consumption goods per se, so its not necessarily that consumers have stopped partaking of the good, rather they are deferring upgrading models etc. So, it looks like it isn’t just the mainstream auto companies in the firing line. Car manufacturers have nowhere to hide…just ask Porsche.

Time for a rethink of business models and strategic positions?

Now, surely there must be some more surprising examples of businesses suffering as incomes become more uncertain (or drop)…

Friedman and I get Wired – an electric combination

New York Times op-ed dynamo and Flat World zealot Thomas Friedman has joined me on the Better Place electric car bandwagon – see his discussion of the consortium’s expansion (and my post on them earlier this week).

I also found a lengthy Wired magazine profile of the man behind the scheme. It certainly sounds audacious yet practical. The article provides a lengthy explanation of the components of the puzzle (click on the figure above for an explanation). There’s a video explanation of the Israel rollout below.

The challenge for firms is to find where they can best contribute to or benefit from such a different set of infrastructure and behaviours. What possible complementary products can you foresee?