Tuesday, February 5, 2008

Great Design: The Price of Entry, but Not the Ticket to Success

I recently uncovered a Business Week article from 2004, which chronicled the state of design in the auto industry. At first read, the article seems to say how competitive the industry has become by invoking the proliferation of new designs. No earth-shattering truth here: just looking at a simple chart of model numbers in different years is enough to make this point:

1960: 200 est.
1992: 600
1995: 910
2002: 1314
(Businesweek 2/16/04 and Revolutionizing Product Development, Clark and Wheelwright)

And in some senses, this design diversity is important because quality has become less and less of a differentiating factor. According to JD Power, in 1998, there were 212 defects per 100 cars, whereas in 2004 there were 53 defects in 100 cars (or a single defect every other car). Perhaps in the past, cars could sell on reliability alone. No longer! If anything, true reliability differences may have been “lost in the noise”. I know some people will want to burn me at the stake for saying that, but go look at the JD Power data and talk to some mechanics on late model cars. Don’t ask them about the dome light that goes out, ask how often the engine breaks or the car won’t start.

Anyway, if reliability is hard to distinguish, to what end does differing design bring us? Is model diversity limitless? Are we trending toward individual cars?

Prognostications are better left to other people, but I would like to say that my preference would be for enough commonality in design such that owners can actually form groups and have a sense of belonging to a community of like-minded owners. I have to ask myself, “If every Ferrari were totally different, would there be a Ferrari brand at all?”

So if reliability is lost in the noise, and design differentiation is merely a prerequisite that has limits, what is left to distinguish brands? Stay tuned for tomorrow's post.

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