TH!NK: The end of strategy?
By: Dr Peter Wells, Tuesday, September 01, 2009, AutomotiveWorld.com
The electric vehicle manufacturer TH!NK, based in Norway, has a more convoluted history than any Brazilian telenovela, Bollywood epic, or Hollywood superhero film and yet the company manages impossibly to emerge from the carnage and live to fight another day. The first prototype, the PIVCO CityBee dates back to 1991 when the Norwegian government provided €125,000 to Jan Otto Ringdall, who had been nurturing the concept since the oil shocks of the 1970s. This was the basis of the company and the car that came to be called TH!NK.
TH!NK did not just develop a rather well-finished and professional electric car; the company also developed an intriguing strategy premised on low-volume production, Internet-based sales, and the location of small factories in the markets they were to serve.
Unfortunately for TH!NK, the promise has consistently failed to live up to reality as the company lurched through different owners (including of course Ford in the Jac Nasser era, who bought TH!NK in 1999 after the company had first declared itself bankrupt in 1998) and repeated visits to the bankruptcy court. If anything, as time has gone by the oscillations in the company's fortunes have become even more pronounced. Consider the record since 2006:
- March 1st 2006: declared bankrupt
- December 13th 2006: announced H2 fuel cell programme with H2 Logic of Denmark
- March 13th 2007: City car re-launched with plans to build 3,500 cars in 2008
- May 22nd 2007: Tesla announced intention to supply lithium-ion battery packs to TH!NK in a US$43m deal
- October 16th 2007: EnerDel announced intention to supply lithium-ion battery packs with eventual sales of US$70m over two years to 2008
- April 22nd 2008: THINK formed a joint venture (TH!NK North America) with US companies Kleiner Perkins and RockPort Capital along with plans to boost production at the Aurskog plant to 10,000upa in 2009
- 17th December 2008: asks for bailout from the Norway government but no help forthcoming
- January 2009: bankrupt again
- March 13th 2009: announced plans to build 60,000 cars by 2012 in the US
- May 13th 2009: TH!NK City became the first electric vehicle to gain pan-European Type Approval
- August 27th 2009: new investment from EnerDel and Valmet. Valmet to build the TH!NK City in its own plant starting Q4 2009 while Aurskog will be abandoned. TH!NK exits bankruptcy protection.
The problem really has always been price. In 2007 the TH!NK City was going to be retailed on the market at NOK200,000 (US$32,596) in Norway. Buyers could pay an additional NOK1,000 (US$162) per month for a battery upgrade package.
So where now for TH!NK? The last vestiges of its innovative distribution and marketing strategy have disappeared along with its previous lead in the electric vehicle design field. It is hard to imagine that the brand can have any serious longevity in its own right, particularly as the original elegance of the manufacturing system will now be lost.
The automotive industry has long been one characterised by high barriers to entry, and the TH!NK story is testimony to that. In effect, strategy has given way to expediency and necessity. For this, the new management under Richard Canny cannot really be blamed, and given the track record of the company for startling comebacks it would be foolish to write them off just yet. However, the independent future of TH!NK seems to be all but over.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com's sister website AWPresenter.com. He can be contacted on wellspe@cardiff.ac.uk.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Published on Tuesday, September 01, 2009
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