Local Motors is an American motor vehicle manufacturing company focused on low-volume manufacturing of open-source motor vehicle designs using multiple microfactories. It was founded in 2007 with headquarters in Phoenix, Arizona.

Local Motors : Business Analysis

Strategy Adopted By Local Motors

Local Motors is one such company which has a great potential to challenge the well established brands in the world. In this digital age, every business is increasingly becoming more and more customer-focused because the customers are the king in this digital age.

The Local Motors has rightly started off with its focus on the needs and wants of the customer. All of their products are co-created and designed by obtaining inputs through crowdsourcing. Well according to me, the strategy of the company is co-designing because from the news article by Juan Andres Munoz published in CNN.com on “How the built a $100,000 race car”, we can find that, the design was chosen through a 2009 vote by a community of hundreds of people on the Internet. Based on that, the company chose it’s automobile design. Hence we can see that Local Motors has adopted Co-Designing strategy.

Will The Company’s Premium Car Rally Fighter Succeed?

According to me, the Rally Fighter is the new monster of all automobiles and will be successful. Soon it will give established brands to run for their money. Local motors is sure a force to reckoned with, despite not being able to increase the sales. It might sound exaggerating but why did I proclaim as such?

  • Crowdsourcing – I can customize the car the way I want. After-all I’m the one who is paying for and going to use isn’t it? I’m sure there are lots of people like me out there who, when they come to know about this company and the Rally Fighter, they’ll love to design and make their own car.
  • Failure is stepping stone to success – Many may argue that the company is not making good profits and couldn’t keep up with the sales target etc. Hey there are lots of example where the companies survived without profits for many years until they established themselves firmly as the distinctive brand with respect to the competitors. One such example would be Amazon, as we all know that still they’re not getting much from E-commerce business but going strong and establishing themselves as the most innovative and best one in the minds of the customers. Key strategy is to create awareness and persuade the customers to like its offering which in turn will increase the market share and customer loyalty.
  • Constant Innovation – Again from the news item by Juan Andres Munoz published in CNN.com on “How the built a $100,000 race car”, we get to know that they’re currently working on a prototype military vehicle — the XC2v — for the Defense Advanced Research Projects Agency, a research arm of the Pentagon. Another news article published on gas2.org by Christopher DeMorro on “Local Motors Electric Rally Fighter Gets Flogged” points out that Local Motors demonstrated its 3D printing technology at the Detroit Auto Show, and apparently there’s been demand for electric versions of the Rally Fighter as well. Local Motors just might be a breakout hit if CEO Jay Rogers continues to play his cards right.
  • Diversification – Local Motors has recognized that it can’t keep going with Rally Fighter as the sales were dwindling, hence it started to diversify its products by launching challenges to communally design the best pizza delivery vehicle and the best shoe for driving, projects requested by Dominos Pizza and Reebok. They also venturing into production of crowdsourced motorcycle, a boat and a more affordable $10,000 car to survive and capture new markets.

What is Local Motors’ value proposition?

The Value Proposition of Local Motors which I believe when I read about it in the news articles are as follows:

  • Local Motors designs and produces its vehicles through crowdsourcing.
  • Local Motors produces the vehicle five times faster than the conventional process.
  • It spends about $3 million on the car’s development which is much less than what is spent on commercial models by the major automakers.
  • It designed a five-point seat belt like the Rally Fighter’s at the cost of just $10 compared to the $6 million it takes to develop an airbag.

Thus it is trying to consolidate its position through constant innovation, cutting costs, incorporating latest technologies such as 3-D printing and crowdsourcing. 

Bottom-line: Local Motors has sure caught the attention of world through their innovative and cost effective superior technology incorporated products. Will it succeed like Amazon or SpaceX? Let’s keep track of it closely and see how it evolves and performs.

Local Motors: Case Study
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Local Motors: Case Study
Case study on Local Motors, a motor vehicle manufacturing firm. This post analyses their business strategy and talks about their abilities to succeed.
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