Professor Elam

Well that dictum seems simple enough, but Detroit often fails to do it.  And so Mike Jackson at Auton Nation is demanding Detroit pay attention.  He hired McKinsy to data mine what equipment customers want on which vehicles.  For example, what should be a $24K Chrysler Sebring covertible when optioned to $32K won’t sell, the buyer can almost get a BMW at that price.  ditto for a tull stized truck wtih a V 6 engine, I made the mistake of buying one, hated it, low power and lousy gas mileage as the engine had to work hard to pull the truck around. 

This is a good example of how dealer strength can affect manufacturing.  It is also an example of how Detroit still does not get it-the Japanese firms do a better job of tailoring the output to consumer tastes and as a result have lower inventories and higher inventory turnover, something we study in all accounting courses.  The article is on page one of the Friday 2/9/07WSJ.

DLE