The King Is Dead; Long Live the King

The King Is Dead
A muffled sigh of grief can be heard emanating from Detroit, as after 76 years as the world's #1 carmaker, GM has lost its crown to Toyota. What has caused the king to fall?

Arrogance, surely is a contributor - after 30 consecutive years of declining market share in the USA, GM still has not awakened to the realities of global competition. Slow to change, late with new models, lagging in innovation, and in quality ... the criticisms are easy to find. Surely behind all this is a mental problem; perhaps, in addition to arrogance, there is ignorance, or petulance, and perhaps some other "ances" too. The rules of the game changed and GM did not change adequately; it would appear that GM has a flawed mental model of the global auto market.

Long Live the King
Now, imagine it's 2083. Will Toyota still be the #1 auto maker in the world? Or will the company have fallen into the status of a mediocrity?

It's difficult to imagine that Toyota would lose it's grasp on leadership, as the one perhaps most distinguishing characteristic of the company as seen from the outside today is the clarity of its thinking. By all accounts, Toyota is characterized by a high degree of collaborative thinking, by an intense scrutiny and appreciation of the realities of the marketplace, by a commitment to innovation (by some accounts, 100 ideas per person per year is normal), and through it's hybrid technology, a positioning as more environmentally sensitive than other auto makers.

Should these qualities fade, then Toyota might fade with them. But what if the market shifts, perhaps suddenly, and "cars" no longer mean what they mean today. Could Toyota become the equivalent of today's typewriter manufacturer? It's possible, certainly; but really hard to imagine, just as in 1970 it was so hard to imagine that the typewriter could fade to irrelevance in a mere decade.

50 years after Toyota entered the American market it has achieved this milestone; what company - probably one that we haven't heard of yet - could displace Toyota? An Indian company? A Chinese one? Or perhaps a company that makes flying cars, rather than ground-huggers will become the leader. Perhaps we'll travel via teleportation by 2083, and cars will only be in museums.

Or here's a thought - perhaps it will be ... GM! Let us not underestimate the power of a global colossus, and if the hydrogen economy really does emerge, GM's investment of billions in that technology could catapult it back to #1. The pace of innovation is accelerating, and no company's lead is insurmountable.