Innovation vs. Rationalization: What Keeps Automotive Companies Rolling

Implications: Japan's Mazda Motor Corp announcement of reducing the use of palladium and platinum by 70-90% in their new single-nanotechnology automobile catalyst is proof that with rising prices comes innovation, that embracing change is good for the company and good for the consumer, and that Mazda may, in fact, have a better idea, something that has Ford and the rest of the automotive industry thinking. 

Analysis: Mazda's results speak volumes for established Asian and European headquartered automotive makers in their quest to compete in delivering products that excite, innovate, and are in tune with the demands of their customers. By slashing component cost without compromise to performance, Mazda is speaking to the environment, shareholders, consumers, and their own bottom line in one fell swoop.

This points to the conflicting ideology inherent in this and most relationships involving US and non-US based automotive companies, namely, how quickly can the US side post a financial gain. The operative word is "quickly" as in the next quarterly reporting. While the Ford/Mazda relationship goes deep, one might view this as a conflict between what can be produced versus what will the customer receive. Clearly Mazda has succeeded at both, and is not anxious to share what appears to be a competative advantage for itself and what its customers ultimately gain. 

At one time Ford had a better idea, and for this relationship to endure, both sides must balance "giving" with "taking". Yes, Ford will "take" the returns as controlling shareholder, whatever they may be, and include them in their next quarterly reporting. But Ford ought to take yet another more important lesson from this competitor's playbook, a competitor because at the end of the day if they don't innovate and provide what customers demand in styling, quality, and performance across all markets in which they participate (something other than trucks and SUV's), they'll find themselves continuing to look internally, asking suppliers to again cut costs, shutting plants, and exiting markets.

The automobile marketshare Ford earned throughout the decades is their's to lose. If Ford takes the innovation play from one of its extended family, Ford will once again have a better idea.