When former Chrysler Corp. Chairman Lee Iacocca talks about his latest venture, electric bicycle maker EV Global Motors Co., it sounds strikingly similar to the automobile business.
The buzz at the National Automobile Dealers Association convention is the possible replacement of the independent dealer network with factory-owned stores and large, often publicly held dealerships. Meanwhile, Iacocca is looking to car dealers to be distributors for EV*Global's bicycles. For $10,000, those dealers are assigned exclusive sales territories much like Saturn retailers. Saturn dealers from the Western states who sell General Motors' electric-powered EV1 are among the most interested in selling the bikes.
Dealers are necessary to demonstrate the product, be it bicycles or cars, Iacocca insisted. 'The dealer franchise system set up by Henry Ford is a damn good one,' he said. 'Factory stores don't work. I don't think you should sign up Circuit City to sell cars. Selling a car or house is like local politics. You want to buy from the guy who goes to the Kiwanis meeting every month and is part of the community.'
Iacocca likens the electric transportation business he is in now with its numerous players to the early days of the auto industry when there were hundreds of companies seeing potential in the automobile. The number of companies dwindled, and today predictions are for even fewer.
'(Fiat's) Gianni Agnelli predicted 20 years ago that there would be no more than 10 car manufacturers worldwide by the end of the century, and we're getting damn closed to it if this keeps up,' said Iacocca. 'I worked 20 years to make it a Big 3. If I thought it was going to be a Big 2, I wouldn't have worked so hard.'
Still, Iacocca admits he envisioned a global company consisting of Chrysler, Volkswagen and Nissan. He is disappointed by the DaimlerChrysler marriage, but predicts it will do well.
Iacocca compares his line of bikes, which includes a model priced at about $1,000, to the minivan, which had no market until Chrysler created one.
Before Iacocca arrived at the NADA convention, his Los Angeles company had 65 dealers signed up. He hopes to have 125 by the end of March.