China And Electric Cars

"China is set to become the world's largest producer of environment-friendly cars within 10 years, largely due to the central government's backing and the domestic car makers' ambitions to push electric vehicles, according to business consulting firm Bain & Company."

See the complete article at the China Daily here. The Cherry S18 electric car is pictured on the right.

This level of Chinese government push this early in the country's automotive industry's growth bodes well for the future of the Chinese consumers and their environmental aspirations.

Debunking "Wisdom of Crowds" Myth - Two Examples

Crowds are not wise... crowds are equivalent of herds. Communities formed by choice are ones that constitute anything close to wisdom. To clarify how I look at defining wisdom, please see the diagram below:


Wisdom is the country of gods!

I am providing two examples, and these are not anecdotes.

First example: Did Toyota Prius make economical sense? No! I will let the reader search through the plethora of data out showing how buying a used or a modern car was far more economical than buying a Prius in the short and long term. See graph below of a test conducted by Good Clean Tech.

Yet the crowds thronged to buy the Prius creating an instant back log. As soon as the oil price dropped, the Prius is lined up on Toyota's dealership lots.

USA's oil consumption is nicely creeping back up and steadily climbing, see here from CENIMAR. Now, would a "wise" crowd try to dig themselves into the same hole they just climbed out of?

Second example: Consider the recent case of the investment manager Bernard Madoff. Please read and hear details here on NPR. Unfortunately the financial markets are full of other similar concerns.

I rest my case!

Ford - An Analysis

A good friend of mine Mr. Rachit Shukla conducted an evaluation of Ford in Nov 2006 while at the Wharton School of University of Pennsylvania. Rachit and his team provide great insights that are validating themselves within a matter of couple years. The report provides a good analysis of Ford's third restructuring effort (in five years) called the "Way Forward".

On Ford's recent history from the report:

(click for larger view)

The above can be stated of the US automotive industry in general. Being close to the performance automotive industry personally, I have been amazed at the most recent Detroit Automotive show... I was terribly curious as to who was planning to purchase most of the new cars and trucks being showcased by Ford and GM?

On the topic of consumer focus, the report states:

"Currently, Ford lacks product differentiation between the three brands sold by the North American division – Ford, Lincoln, and Mercury. As a result, the divisions are cannibalizing each other’s sales. As a Merrill Lynch analyst remarked: “[Mercury and Lincoln] are mostly dressed-up versions of mass-market Fords.” "

Please see the detailed report here.