Tesla success could spur more boutique automakers

Twenty-five years after John DeLorean introduced his stainless-steel, gull-wing sports car, other small independent automakers are springing up to serve niche consumers. Experts predict a change in the parts-supply chain will open up more opportunities for small auto manufacturers. One study says nearly 80 percent of the auto industry's "total value creation" will come from suppliers, not the major manufacturers. This means a small company will have access to technology and manufacturing once sheltered by the big automakers. Tesla is a shining example of this trend. The small California-based company has developed a premium electric sports car by adapting and improving on existing battery, motor, chassis and carbon-fiber body technology. Total investment so far is $60 million, which one Tesla official says is probably the marketing budget for a single GM vehicle. There are skeptics, of course. Maryann Keller, a noted automotive author and analyst, reminds us that companies still have to set up advertising, dealer network and repair shops. Despite the possibility of failure, there will never be a shortage of entrepreneurs and venture capitalists willing to try.

[Source: Clayton Collins/The Christian Science Monitor]

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