The New Old Thing Enters the Automotive Market

by on

Remember Clayton Christenson’s book, The Innovator’s Dilemma? He posited the reason many great firms fail is due to the fact that they become too big and too slow to respond to disruptive technologies. Christenson tells it this way, by placing too great an emphasis on satisfying customers’ current needs, companies fail to adapt or adopt new technology that will meet customers’ unstated or future needs, and he argues that such companies will eventually fall behind. How apropos that statement is to a number of industries. It appears particularly germane to the automotive industry.

In product development circles, marketing folks talk about line extensions vs. breakthrough products. Think of it as toothpaste with whitening (line extension) vs. whitening strips (breakthrough). We won’t make any judgments as to which generates more revenue and profit. We’ll just talk about the concept in terms of how people are thinking about product innovation in the automotive industry. Everyone talks about hybrid and electric cars (breakthrough) (including us) and many other innovative cars such as the Tata Nano to China electric cars to battery innovation. They all have one thing in common in that they are new (relatively speaking and new in the sense that they have yet to be fully commercialized in their current application)

It’s companies like BYD that get all the press and now Al Gore is lending his name to V-Vehicle Company, one of the hottest news firms in US domestic auto production set to build a one million square foot plant in Monroe, Louisiana. But actually, rumors have it that V-Vehicle Company will ¦be powered only by gasoline and that it won’t be a hybrid, full-electric or other alternative-powered vehicle.

Score one for line extension? We’re not entirely sure, as the company has kept its innovations close to the chest. However, another company in California, Transonic Combustion, makes a special breed of fuel injectors, which use advanced technology to force precisely timed, high-pressure bursts of gas-air mixture into engines to increase their power and efficiency, according to this article from Wired Magazine.

Christensen also says that the low-end disruptors often come in and displace high-end competitors. What with rare earth, minor metals, critical metals and precious metals hanging in the balance, will we end up going green by simply maximizing our gas mileage and using less dirty fossil fuels? Tata’s Nano might be on the right track but what if these new hybrid and electric vehicles can’t be produced at a low enough price point to disrupt the low end of the market?
Maybe we ought to pay a little more media attention to the new old thing????
–Lisa Reisman

Comments (5)

  1. kerry bradshaw says:

    Disruptive technologies is a crock. Christensen’s book is a simpleminded and jerky assertion that mostly shows that logic is a rare commodity when one is trying to push an idea. Only companies who have monopolies can afford to ignore any new technology. And they can’t afford to do so for very long. The auto business is so competitive that the idea that some new technology would be ignored by those 15 or so automakers who aren’t number 1 is so absurd and brainless that even elementary school children would have no problem destroying the argument. And people wonder why the West is getting its ass kicked by the Asians.

  2. Zojila says:

    Tata is a huge conglomerate of 98 companies in everything from tea to software to supercomputers, yet they are nimble enough to respond to market needs. I think this has to do with the quality of the management, how rooted they are in the real world versus how removed they are from reality

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.