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The southwest airlines of the automotive category

September 29, 2004

Is it possible to look at the automotive industry a different way? By first examining existing cost structures, financing systems and customer lifetime value and by coming up with a new model, AT Kearney has “invented” a new virtual car brand. By ripping apart the industry, they found a way to achieve margins 4 times the current average by focusing on the customer rather than on market share. Their vision centers around mobility, not the actual automobile.

Kearney’s fake brand is IndeGo. The cars can only be leased. The company would invest heavily in branding and customer service. Production is outsourced and cars are sold only on the internet. Their interesting conclusion is that existing OEMs and strong brands from outside the automotive category could participate in this new model; anyone for a General Electric car?
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