Why It’s Time For The Auto Industry To Create A New Model T – Forbes
EDITOR’S NOTE: Forbes has just published Curbing Cars: America’s Independence From The Auto Industry, an eBook investigating why a growing number of Americans are giving up their cars. Written by former New York Times Detroit bureau chief Micheline Maynard, this illuminating account of our changing automotive habits is available for download now.
Young people are losing interest in driver’s licenses. Cars have climbed to near-record prices. Increasingly, Americans are looking at alternatives to cars, like public transportation, bike sharing and rides from Uber.
With the auto industry gathered in New York this week for the New York International Auto Show, many people are puzzled over ways to win consumers back. One idea: create a new Model T.
There’s an opportunity for some smart company to build the next car for the masses. There is certainly a precedent for doing so. The original Model T put the car within the reach of the American middle class for the first time, and as cheaper used versions became available, the demographic got pushed down even further to the working class.
From 1910 through 1930, the automobile industry attracted new customers and auto sales boomed. But then there came a 15-year period in which auto sales stalled, first because of the Great Depression, and then because cars weren’tavailable during World War II.
What happened to revive the American car market? Prosperity returned, of course, but there was also a successor to the Model T that put millions of people into cars they could afford: the Volkswagen Beetle. It was a global, not just American, phenomenon and caught buyers’ attention for a number of reasons.
First, it was easy to operate, and fun to drive. Second, it had a unique, endearing shape. Third, the Beetle was much like the Toyota Prius later on: it made a statement about the people who drove it. The classic “Think Small” print and television ads produced by Doyle Dane Bernbach for the Beetle still resonate among students of commercials, and even pop up as cultural references in programs like Mad Men.
Those two automobiles—the T and the Bug—convinced people to spend their money on automobiles, some for the first time, others after a long absence from the auto market. For the automakers, it could be the answer once more. But whoever tries it has to think big, and has to think universally. That might appear to go against the trends that are taking place in the car market, where segments are fragmenting and cars can nearly be customized. It also will be a tough sell to people who now look at the overall cost of driving, including parking, insurance and all the other expenses, rather than just the sticker price of an automobile.
However, Toyota came up with a global hit, and an entirely new brand, when it developed the hybrid Prius. A Tesla Model S is essentially the same the world over. Neither of these cars is cheap, of course, and they will never be the volume sellers that the Model T and the Beetle were. But they have a consumer trend working in their favor.
Americans have shown that once a product is hot, they are willing to buy millions of them. We’ve become wedded to our mobile devices, which many young people consider more important than owning an automobile.
But consider this: the iPod only came on the market in 2001. Thirteen years later, an entire generation of people only knows how to download or tap an app for music (except for the last fans of vinyl, who’ve become a cult in and of themselves). Likewise, the iPhone went on sale in 2007, and thus far Apple Apple has sold almost 800 million of them. That doesn’t include iPads and the other variations on its screen-swiping technology.
Of course, a smartphone or an MP3 player does not require the investment of an automobile. No one has yet figured out how to fold up a car and put it in a briefcase. But the mindset for buying an appealing mass market vehicle is there, should a smart car company figure out how to leverage it. That raises a key question: If they build that car, will customers come? All things being equal, if people can afford a car, and have a parking space, and don’t have to deal with traffic headaches, will they buy one?
The most devoted car fanatics would shout “Yes! Of course they would!” But, what if they wouldn’t, and the nation is simply seeing the development of a core of people who won’t be interested in automobiles at any price, size or convenience?