The U.S. auto industry went to the brink. It was rescued by massive amounts of taxpayer money. Brands, factories and dealers shuttered. The business went through traumatic changes. But one thing has not changed: The antiquated way of selling cars. No, I’m not talking about selling cars via the Internet or Costco. I’m talking about build-to-order. A.k.a. “mass customization.” It’s not a pipe dream. It’s done every day. Just not in America.
The story about the supposedly short in supply cars reminded me: Most, if not all European brands already build-to-order. You buy your car like a Dell computer. You go to your dealer. You pick a car, maybe test-drive it. Then you sit down with your sales guy and build your car a la carte. Color, engine, trim level, extras. You have the choice of a dizzying (and often overwhelming) array of choices. The salesguy has a dizzying arsenal of ways to up-sell you. The result is a car that is as individualistic as you are. Volkswagen has done it as long as I can remember – and that’s long. We once figured at Volkswagen that on the average, 1.5 identical VWs are on Germany’s streets. And that was a few years back.
If the dizzying array of choices is not dizzying enough, then many carmakers have in-house shops that fulfill any wish. Volkswagen Individual GmbH will probably give you a Golf in leopard skin, if it’s deemed ecologically responsible.
Once the order is placed, it goes to the factory, and the car is made for you. Takes a few weeks. When I left Volkswagen the bulk of the cars sold in Europe were built-to-order. Instead of cars being built willy-nilly and dumped on dealers’ lots, only the cars people want get built. In Germany, more than 30 percent of the buyers actually make a trip to Wolfsburg and pick up their own car themselves. In the Autostadt, a Disneyworld for carbuyers. Not with a schlocky Disneyworld Hotel. With a Ritz Carlton.
The upshot for the dealer is that they don’t need a huge inventory of cars. One of each suffices. And the more esoteric ones can be sold out of the catalog, or via fancy multimedia setups (that never really work.) If you insist on an oddball car, the dealer doesn’t have to call around and try to locate it. He just writes the order for the oddball car, and it will show up. What about instant gratification? If you want to drive away immediately, the dealer has a limited stock. It is understood that you need to take what’s there, and it’s only the most common configurations that usually work as build-to-order showpieces. If you want your wishes fulfilled, you go the build-to-order route. If you are in a hurry to get wheels. the dealer will give you a rental at a very reasonable price for while you wait.
One of the reasons why imports don’t make huge inroads in Europe is that they can’t do the build-to-order for imported cars. Your choices are limited to what rolls off the boat.
The U.S. auto industry went through so many gutwrenching changes, why not change to the build-to-order model while we are at it? It’s not that Ford and GM don’t know how. Their cars in Europe use the same system. (Hit the “Konfigurator” button). Want a “bespoke Fiesta?” Build it here.
Build-to-order would also be a better weapon against the imports than witch hunts. Customers love choices. The imports couldn’t keep up with it – unless they build in America. And in America, foreigners are already making the first steps. BMW is pushing the build-to-order model for the X3. Books have been written about the topic. Even China is going to build-to-order.
Want Americans to buy American? Build-to-order is the key. Yeah, sure, it’s never gonna work here. Add it to the rest of the stuff that ain’t working.