Entering an era of ferment – radical vs incrementalist strategies in automotive power train development

Abstract

Incremental improvement of a deeply embedded technology system has been a hallmark of the automotive industry for a very long time. Efforts to develop alternatives have repeatedly failed. This paper analyses how Toyota started to challenge this pattern in the late 1990s, by the architectural innovation embodied in Prius, the first mass-produced hybrid-electric car. This is followed by an account of how key competitors reacted by accelerating their incremental innovation efforts, in an era when concerns over fuel prices and greenhouse gas emissions increased demand for environmentally sound vehicles. The paper builds on records of patenting and performance of actually marketed models to analyse the unfolding technology competition. It also considers the most probable technologies on the market in a 10–12 year timeframe, and further explains how different technology strategies put competing firms in different positions in an era of ferment.

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