LONDON - There are not many things that fascinate Ford Chief Executive and ardent car guy Jac Nasser as much as automobiles, but the Internet clearly has his attention.
In a far-reaching speech to the British American Chamber of Commerce here on October 26, Nasser made it clear the Internet plays a pivotal role in his thinking as he drives forward with massive changes at the world's second largest auto company.
'The Internet will do more than all the other trade agreements to erase tariffs and barriers to commerce,' he said. 'It will create a truly global economy.'
The Internet will change the way Ford does business with its suppliers and customers and will change the way it designs and produces its products, he said. 'The real power of the Internet is business-to-business transformation in the supply chain and production chain.'
He cited Ford's recent agreement with Microsoft's CarPoint automotive retail Website. By allowing consumers to order a vehicle of their choice, the deal could transform the traditional method of ordering, designing and producing vehicles, he said.
Beyond lean production
'Such a system will suck capital and inventory out of production systems,' he said. 'It will go way beyond lean production.'
But Nasser did not go so far as to predict the death of the traditional auto dealership - although he said dealers are worried about the changes.
'I would say there will be a mixture of channels. There will be traditional dealers, and there will be concierge dealers who will take care of your every whim.
'I had a delegation of dealers come to me recently in the USA. Their basic plea was: 'Is there any way you can delay the future? We don't like the Internet. We really like the business and we want to hand it down to the next generation.''
Nasser did not say what his response to those dealers was, but Ford has spoken loudly with its Auto Collections in the USA, owned jointly by Ford and dealers. Ford is trying similar retail experiments in Europe, starting with the UK and Germany.
When Ford forecasters were predicting the future of automotive retail five years ago, they came up with a distribution model that did not even mention the word Internet, said Nasser. Such rapid change will continue, he predicted.
'What's happening in the UK in terms of dealer consolidation will continue,' he said.
Artificial market research
Traditional marketing methods will no longer be effective, Nasser predicted.
'I'm not a fan of traditional market research. It doesn't allow consumers to be in a natural environment. With the Internet, we won't have to put customers through artificial focus groups and artificial market research.
'We must excite the consumer with products and services that are a lot sharper than they ever were before,' he said.
Ford will be able to do some 'elaborate niche marketing in terms of production and how we tailor the product.'
Internet usage, once the province of a select few, will become virtually universal, he said.
'If you look at the US marketing in terms of the car buying public, 40 percent of our consumers in some way touch the Internet before buying a car,' he said. 'We expect that number to jump to 80 percent.