A few weeks ago I opined that no entrepreneur would start up a new car company today in the face of so much government regulation. Well, the cover story of the latest Forbes disagrees with that assessment. They write:
"The implosion of General Motors and Chrysler has sparked a flurry of innovators like [Henrik] Fisker. They are reminiscent of the entrepreneurs in the car industry's early days, when Henry Ford, Ransom E. Olds, Henry Studebaker and many now forgotten dreamers competed for technological leadership with steam-, electricity- and gasoline-powered cars. By the early 1910s the internal combustion engine won out. Amazingly, the means of propulsion--indeed the car business itself--has changed little since then."
I read the article to learn if I had been wrong. Yes, it is true that Henrik Fisker has a solid plan to deliver new vehicles to American consumers in the next three years. But, he's looking at selling $88,000 hybrid sports cars. Later, he expects to have a $50,000 plug-in available.
I submit that the development of these specialty concept cars will not make a significant impact on the marketplace. In my mind, the whole problem with the auto industry is that the vehicles are simply too expensive. Fisker and the other entrepreneurs mentioned will do nothing to achieve broad appeal. The startup costs for his company are very high. In addition, he is seeking financial aid from U.S. government program. So, is he really an entrepreneur?
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