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Offer and demand for green cars

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During my visit of the Montreal Auto Show, where I couldn't sustain from mentioning the obvious lack of commitment to the environment from most of the luxury-car manufacturers, I think that we should look further into this issue.

Why do these manufacturers seem to totally ignore these imperatives? Is it a simple question of offer and demand?

The offer and demand

One of the most popular arguments that I'm given in all the years that I've met with people in the automotive industry, and what indicates the lack of leadership from most of them is the following: "It's because there is no demand for them."

This argument, while seductive, is not so relevant. As a matter of fact, how do we know what people desire if we don't present them a choice of options? Or, when the first automobiles appeared, do you think it's because people approached these pioneers and said: "We want automobiles!" No, actually, like their descendant Bill Ford recently said, people wanted faster horses...

Who told Chrysler that people wanted minivans in 1984? Nobody, since that type of vehicle didn't exist until then.

So, this kind of argument is to be handled with care.

There are many ways to take action in regard to offer and demand. In fact, there are three:

1-The avant-garde way:

A company will go ahead with a product which they're not sure of its success, even if they did market studies, polls and focus groups. Although all these help a company to see more clearly what people want and what they believe they need (and I emphasize the word 'believe') is not a guarantee. If this company has success with its new product or its new variant of a product, it will probably take the lead. The others will lose sales and revenues, and they eventually won't have a choice but to jump in to the game if they want a part of this segment.

A company that manages, despite the sometimes doubtful quality of its products, to succeed is Chrysler. How many of their vehicles sold better than they should've, thanks to an audacious design? How can we explain their current success with such a choice of cars and trucks? That's an interesting example.

Here's an example, which is my dad's case. The last car he bought after he retired was a 1995 Intrepid.

He took us all by surprise because all his life, he didn't own anything other than a Ford or a GM. But that one charmed him with its design. This proves that even the most conservative people like my dad can change their mind.

However, this audacious way of doing business hasn't always worked. There are also examples of manufacturers that have taken risks and have fell flat on their faces. So the leader, the one who takes risks can achieve glory if their gestures pay off, but it can also cost a lot of money. To succeed, one must take risks.

Recent history has shown that those who have taken calculated risks generally succeed much better. For example, products like the new Mustang, that's forcing GM to come out with a new Camaro and Chrysler to bring back their Challenger, after letting Ford make a lot of money in that category.