[p2p-research] Local Motors, a glimpse of the future

[Ryan]

  Sent to you by Ryan via Google Reader: Local Motors, a glimpse of the
future via Grant McCracken by Grant McCracken on 1/8/10



Is this a glimpse of the future?

Detroit without Detroit?

Detroit de-troited?

Local Motors outsources the design task (in this case to Mihai
Panaitescu), builds variations on to a single chassis (in this case
from BMW) and invites consumers to come to the plant (in Massachusetts)
and help build the car.

Customization, local content, consumer participation (aka cocreation),
these things are now happening everywhere in Western economies. But it
looked as if certain industries would remain locked in the old world of
mass and mono manufacture. Any industry that is capital intensive,
constrained by government requirement, and engaged in a complex
production process…surely this would continue to make product the old
fashioned way.

Enter Local Motors

In the FAQ, Local Motors asks this question:

How does Local Motors intend to build and sell cars? Doesn’t this cost
hundreds of millions of dollars?

Their answer:

To compete with the major auto manufacturers, it would cost hundreds of
millions of dollars. However, we do not intend to compete with them in
terms of size or mass appeal. Our focus is specifically car enthusiasts
and design lovers. We intend a simpler product and a lower volume. You
might ask then why customers will pay for that simplicity, and we would
answer that the specialized local nature of the business is meant to
make up for that differentiation. We are ALL ABOUT bringing the fun of
cars back to people’s hometown. Think of Micro-Beer for cars or Organic
Food markets. What would you pay more for: a generic beer purchased at
a 7-11, or a custom Micro-Brew? Where would you rather shop: an Organic
Food Market with local produce, or a Supermarket Chain? The products at
these types of local places are simpler and created with less
manufacturing complexity, though they cost more because they are
special and lower volume. Therefore, we do not intend to create a large
OEM only to sell cars through dealerships. Volume is not our thing.

The strategy here is interesting, micro manufacture, niche markets,
branding by location, making locality the basis of product variation.
It’s all about going intensive where cars have traditionally been
extensive. "Volume is not our thing."

The FAQ then asks:

How will Local Motors sell cars?

The answer:

Cars will be sold from specialized facilities distributed across the
United States. These local facilities will not only stimulate local
economies, they will be a source of pride for the entire community.

Local Motors will create an aspirational experience of scarcity driven
demand whereby the local factory will create a Wonka-like fascination
with its products and methods. Not only will it sell its cars, but it
will sell the experience of people being able to visit and watch their
car being "born."

Now, the factory, long the guilty, throw-a-tarp-om-it, or at least put
it on the edge of town, is now one of the sites of meaning manufacture.
Whether Local Motors can actually capture Wonka-like fascination
remains to be seen, but perhaps for car enthusiasts and design lovers,
this is not so hard. In any case, the process of meaning manufacture is
as different here as is the process of physical manufacture.

Clearly, an exercise like this still takes lots of capital. But this
model of car making feels like a return to the early days of the auto
biz. When the game was played locally, by small players, with a massive
amount of tinkering, and lots of participation from the owner. What an
interesting experiment. The old dog learns new tricks.

References

For the Local Motors website, go here.

Acknowledgements

Thanks to Alan Moore for telling me about Local Motors this morning.
See Alan’s website here.

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