The Light Is Green

Lexus grows electronic eyes

The Lexus LS460, to be introduced in fall of 2006, will be the first car to use NEC's new IMAPCAR image sensor chip in its pre-crash safety system, with the goal of detecting road hazards such as other vehicles, pedestrians, animals, etc, and then applying the brakes in time to prevent or reduce impact.

Here is NEC's press release.

NEC projects that this type of detection chip will be installed in 4 million cars by 2010, 8.6 million by 2012 and 18 million in 2015. They project 2015 annual sales to be 3% of NEC's sales in 2005, and plan on owning 40% of the market by that year.

The controversy continues as to whether this type of solution will make drivers less vigilant, more passive, as they come to depend on the car's safety features.

Check out this cool video highlighting Toyota's safety features.

India vs. China

When you think of global manufacturing capacity you think of China, but India has been doing an admirable job of catching up. There's a very good interview in the India Financial Times where Gary Coleman, global MD of manufacturing at Deloitte Touche Tohmatsu discusses the attractiveness of each, based on a study DT did titled "Innovation in Emerging Markets: Strategies for Achieving Commercial Success".

Some highlights:

• India has a competitive advantage in industrial manufacturing (machines, hardware components). China should continue to lead in consumer manufacturing.
• India has great advantage in (i) large pool of English-speaking technical and scientific manpower; (ii) quality universities that turn out talented engineers.
• China invests twice as much as India in infrastructure. E.g. their airports and seaports handle more traffic. The single biggest drawback for FDI in India is poor infrastructure.
• Companies more and more are looking to China and India for planned R&D. India has taken a slight lead here, but China is making a major push to be #1.

Chinese electric cars to U.S.

Electric cars manufactured in China will soon be hitting North American roads. According to Autoweek, Miles Automotive Group will import vehicles made by Tianjin-Qingyuan Electric Vehicle Co. and sell them through dealers that they are already signing up.

They are bringing 2 models:

• The ZX40, mainly a fleet vehicle (top speed 25 mph, range 40 miles) that qualifies as a low speed vehicle and so has lower safety requirements. This model already has been certified for sale in the U.S.). Target market: college campuses, military installations. Sales goal: 5000-7000 units. Price: $14,800.
• The XS200, a highway capable vehicle. Uses lithium-ion batteries and will run up to 80 mph with a max range of 200 miles (320 km). Price: $28,500.

The company will thus challenge some widespread assumptions:

• Chinese cars are far from meeting U.S. regulatory requirements and consumer tastes
• Electric cars cannot provide full functionality

BTW, just saw a Daily Show episode (thanks Mariano) highlighting "Who Killed the Electric Car" that talks about the failed California electric car initiative. Not much meat in the piece, but enough to make you want to see the movie.

Is installing the boss's kid as CEO good for business?

Speaking of family-owned businesses, I just read a post on 800-Read-CEO that discusses why installing the boss's son/daughter as CEO may not be the best idea.

The blog is based on an article in Slate that talks about a study of 5,000 Danish firms, comparing the performance of companies with scion CEOs to the performance of companies where the reins were handed to someone outside the family. In the former, company performance decreased, while in the latter it increased...

Why can a family-owned business fail?

Business management in family-owned companies is conditioned, as in any other company, by economic and organizational factors, but also by emotional issues.

It so happens that a very large percentage of automotive dealerships around the world happen to be family-owned businesses. Having said that, there are a great many issues concerning family-owned companies, mainly regarding succession and management, which must be dealt with so that the company can accomplish the goals that the family sets.

I'll be writing a series of articles based on an interview I did recently with J.C. Aimetta, an expert and coach who specializes in family-owned businesses.

Mr. Aimetta is 46 years old and has dedicated the past 15 to helping owners and directors of over 65 family-owned small and medium-sized businesses manage growth, professionalize their management, and prevent problems with succession. He has been a negotiator in family conflicts and in the sale of family-owned businesses. Mr. Aimetta teaches the subject in 3 Argentine universities, and has given conferences in Panama, Guatemala, El Salvador, Costa Rica, Colombia, Ecuador and Venezuela.

Here are some thoughts that emerged from the interview.

Al McClymont (me): I know this is a broad subject to be treated in such a short time, but I hope we can go through some of the main points. The first thing I would like to ask you is: What do you think are the main reasons a family-owned business can fail?

J.C. Aimetta: Well, the main reason is that the owner and manager roles get mixed up. Thus, an endless number of confusions occur as regards to who is the owner and who is the manager, the administrator.

For most family businesses the role is only one. Therefore, whenever you ask someone, Why do you run this business?, the answer is: Because it is mine. And what empowers you to run the business? The fact that it is mine.

Al McClymont: It’s also important to analyze this from a management and operational point of view side, for example, when the sons and daughters of the owners reach an age appropriate for them to work in the company.

J.C. Aimetta: Well, what happens is that the new generations evolve and the children inherit the same notion, and believe that they can manage the business simply because they own it. As the children are generally more, two, three, four… a company cannot have four managers. And it is at this moment that most confusions arise.

Another thing to bear in mind is that in the long run the family always grows more than the company. In other words, there are more people intending to live from a business that is not growing as fast as the family. If we also consider the in-laws that sometimes, not always, want to work in the family business, conflicts may arise.

Furthermore, we have to bear in mind that job evaluations are done under emotional parameters. That is to say, whenever a relative is hired, it is very difficult to punish lackluster performance, a poor job. Because an emotional cost is paid, a “happiness” cost.

In a nutshell, a family-owned business maintains a delicate balance between happiness and efficiency, profitability and affection. As the business grows, its owners must try to gently tip the balance to one side. Because it is impossible to simultaneously achieve maximum profitability and maximum happiness, and make the growing family’s entire happiness depend on one particular business.

Next time, we’ll talk about problems that may arise in a family-owned business when one family member wants to sell their share of the company.

Related posts:

• Part 1: Why can a family-owned business fail?
• Part 2: What happens when a family member wants to sell their share
• Part 3: Reconciling interests
• Part 4: Family-owned businesses - Planning for succession
• Part 5: Family-owned businesses - Problems in succession planning
• Part 6: How much should family members earn?

Tags: auto dealer, auto dealers, car dealer, car dealers, motor vehicle dealer, motor vehicle dealers, smb, smbs, family owned business, family owned businesses, family-owned business, family-owned businesses, family business, family businesses

JD Power 2006 Dependability Study

The JD Power Vehicle Dependability Study was just released. The ranking scores cars based on the number of problems in 2003 vehicles, according to survey responses from about 48,000 car owners. (The study scores cars based on the number of problems per 100 vehicles).

The top ranking brands were:

1. Lexus (Toyota), Score: 136
2. Mercury (Ford), Score: 151
3. Buick (GM), Score: 153
4. Cadillac (GM), Score: 163
5. Toyota, Score: 179
6. Acura (Honda), Score: 184
7. Honda, Score: 194
8. Jaguar (Ford), Score: 210
9. BMW, Score: 212
10. Infiniti (Nissan), Score: 215
11. Lincoln (Ford), Score: 220
12. Ford, Score: 224
13. Oldsmobile (GM), Score: 224

The Honda Civic was the most dependable compact car, the Buick Century the most dependable midsize car. The lowest-ranking brands were Land Rover (438) and Saab (326).

Of note is that the quality gap between luxury and high-volume vehicles has been steadily decreasing over the past 4 years (from an average gap of 31 problems in 2003 to 15 in 2006).

Pandora

A while back I talked about Liveplasma, a very cool website for music lovers that helps you find new bands based on your tastes with uncanny accuracy.

But a colleague (thanks Leandro!) recently pointed me towards a new service called Pandora that takes this idea a step further, an obvious and logical step in hindsight (i.e. why didn't I think of that!).

Pandora lets you create your own "radio station" based on a band you like; they call themselves your personal DJ. The station then (legally!) plays tunes by that band and from similar bands that you are pretty sure to like. For example, today when I started my Muse station just played a Black Crowes song (liked), then one by The Hiss (didn't), then one by Bedhead (did). In each case you can give a thumbs up or down, and thus further refine future suggestions. I've discovered many a band I did not know of, and my CD collection has been growing ever since...

My Jason Mraz station is even better...

This is addictive, dude!

India trip photos

Finally got a chance to organize my photos, and select the creme of the crop for your viewing pleasure... :)

You can see the photo album here.

Ford slashes US production

Ford says they will slash 21% of their 4th quarter North American production, which amounts to 168,000 units less than the same period last year. This number includes 155,000 trucks and 13,000 cars. They will also cut 20,000 units from their 3rd quarter plan. As read in Automotive News.

Rover may turn Chinese

BMW has agreed to sell the Rover trademark name to Shanghai Automotive (SAIC), one of the top Chinese auto manufacturers, for an estimated USD 21 million. SAIC already owns the rights to the Rover models, and in fact plans to begin producing Rover cars by the end of the year

Ford can still stop this from happening as they have first refusal on the Rover name after they acquired Land Rover from BMW back in 2000. Will they decide to buy the trademark themselves?