Brazil: a three-tier system	A philosophy on four wheels René Lefort
A “high-rise” smart car exhibition centre.   Brazil: a three-tier system With Lilian Satomi in São Paulo To keep the smart car’s price about the same as its rivals, despite its advanced technology, the vehicle’s “configurators” have, among other things, altered the standard process of car design and manufacture. Suppliers whose role was once limited to making small parts designed by the car-maker, have become partners in the car’s conception and production to the extent that the biggest among them now turn out whole sets of parts in the assembly plant itself. This kind of amalgamation is very unusual because the vertical division of tasks and the hierarchy it creates are still the rule in the automobile industry, even if things are less rigid than they once were. In Brazil, for example, where an investment of $20 billion is expected to produce three million vehicles in 2003, there is a kind of three-tier manufacturing system. The big multinational car-makers simply assemble vehicles locally using parts supplied by sub-contractors belonging to the second and third tiers of the system—some firms manufacture the parts and others manufacture components for those parts. One spare parts manufacturer is PRW Automotive, an American multinational with a $360-million annual turnover and 2,900 workers spread over eight plants in Brazil. “Our parts are designed in association with the car-maker,” says Helder Boccaletti, the firm’s marketing director. “We take part in project development, we design the part and then pass on instructions to our components supplier at the tier below.” Metalpó is one of these suppliers which comes into the picture at the end of the chain of command, far from the point of design. It is one of the very few companies which survived the opening-up of the Brazilian car market to foreign competition in the early 1990s. At its factory in São Paulo, it has 200 workers who produce an $18-million annual turnover, only 10 per cent of which is exports. Fifteen years ago, two-thirds of its customers were car assembly firms and the rest were parts manufacturers. Today the proportions are the other way round.	Even in a traditional sector like the automobile industry, the idea of selling a service—mobility—rather than the car to provide it, is gaining ground If you look at the advertisements of any car manufacturer, their most striking feature is the vehicle the firm wants to sell you. Its qualities are presented in all kinds of ways designed to whet the customer’s appetite—its gleaming bodywork (for people who like an eye-catching product), its reliability (to attract careful drivers), its size (for the family motorist), its sobriety (to curry favour with the environmentalists; the throaty roar of its engine to excite roadhogs. The product dictates the message. Advertisements for the so-called “smart” car (always deliberately written with a small “s”) are doing exactly the opposite. There is nothing on the cover of the smart car brochure except a tiny phrase right in the middle of the page which says in very simple lettering: “reduce to the max”. This is understandable for a “car configurator” (the word “manufacturer” is shunned) which in recent weeks has been advertising a car only 2.5 metres long including the bumpers. The firm’s website is a bit more forthcoming. The first page has two sentences each dominated by a huge “P”—“A product with a philosophy” and “A philosophy with a product”. Hans Jürg Schär, head of sales and marketing, calls it “two-thirds product and one-third philosophy”. What may turn out to be a revolution in a sector which symbolizes the industrial world began with an observation, an inventor and a colossus. The observation was that on journeys through towns for work reasons, only one car in five had someone in the front passenger seat and only one in ten had anyone in the back. So the developers of the “smart” came up with a car which, they say, “generously” has two seats in front and, “after studying the problem”, no seats in the back. This mini-car also takes up only half a parking space, thus easing an infuriating problem for urban motorists. The inventor is Nicolas G. Hayek, the Swiss designer of the Swatch, which shook up the watch industry. Without his “ideas and determination”, says Schär, the project would have stayed on the drawing-board. It is not surprising that the little car seems so much like a toy or a ball, coloured and adjustable, whose owners can change its body panels whenever they like. And it was Hayek who, by putting his “dream world” on the table, persuaded the colossus—Mercedes—to help set up the new firm Micro Compact Car (MCC). The personal mobility concept This alliance of inventiveness and established know-how might have simply produced something which was original and technically sound. But MCC says it is selling much more than that. It offers a “philosophy” in the form of a service: “personal mobility”. The buyer gets a car with four wheels at a price which includes a package of guarantees, maintenance, repairs, insurance and easy payment terms, but all manufacturers make similar offers these days. The difference is that the owner of a “smart” also gets, from the moment of purchase and progressively thereafter special access to a range of public and private transport to make up for the car’s limitations where distance and passengers are concerned. This includes trains and planes, as well as cars for a larger number of people to make the occasional long trip. And that’s not all. Hayek is dreaming of an even cheaper car than the “smart” (which costs about $10,000)—one that pollutes less, has more mechanical innovations and can be used in an even more revolutionary way. He wants to start a kind of joint ownership system, or car-sharing, where the owner only uses it for very brief periods when he or she really needs it. In fact, potential purchasers are being asked, according to the advertising, to “drop old habits” which are still so cumbersome, in fact give up the idea of car-owning in the traditional sense, with all the social significance of ownership, and to just acquire a service. Mercedes, the colossus, disagreed with Hayek, the inventor, about that, and they recently parted company. The only factor becoming scarce in a world of abundance is human attention. Adapted from “New Rules for the New Economy”, by Kevin Kelly, Wired magazine, United States, September 1997
The UNESCO Courier