We were talking recently about just how much real change is going on in the automotive business. I don't mean the garden-variety changes that you talk about at cocktail parties, but fundamental change.
Profound changes are happening in both retailing and manufacturing. People are all over the lot on the merger between Daimler-Benz AG and Chrysler Corp. But one thing is clear: It will change the way their peers on both sides of the Atlantic do business.
Competition is already tough for most manufacturers. And this merger - along with the inevitable DaimlerChrysler acquisitions in Asia in the next few months - will make it even tougher. How will it turn out?
And now that Ford is joining Volkswagen and General Motors in Brazil with a plant to let suppliers not only design and engineer big parts of the vehicle but assemble it as well, the opportunities for suppliers are exploding.
Meanwhile, the retail business is hurtling in every direction except the status quo. Ford and GM are committed to getting back into the retail business. They're taking different tacks, but the end is the same: They want to control their distribution channels. We will see whether they are interested in that control only to learn, or really to run retailing.
And the AutoNations, CarMaxes and other companies that get America to invest are working on revolutionizing the retail business. Only the smart, the fearless and the correct visionaries will survive, but meanwhile they all will force the rest of the retail business to change.
And what of the Internet? Will it dominate the buying process or just form a small portion of retail transactions? Once again, only time will tell. But anyone who doesn't believe in the Internet's potential is sadly mistaken. It may take a generation to understand, and we may have to hire a bunch of teen-agers to figure it out, but the Internet is going to change the rules of commerce just as direct mail and shopping malls have changed retailing.
In retailing, there may be an exception. Most of this retail change will skip the smaller automotive markets in the United States. Business there will probably be a great deal like it is today. The Internet is the only wild card.
Change is happening slowly in some places and rapidly in others. But it's real, and it's not going to go away.