The ever popular (I read his every post too) Seth Godin, uniquely qualified to make suggestions for the car industry, has an interesting idea today.  Go back to the “good ole’ days” when there were hundreds of car manufacturers.  The thought is that this would foster innovation.  While increased competition would certainly be welcome, as well as real innovation, I don’t feel that hundreds of automobile manufactures would benefit the consumer in the long run.
One of the benefits of the external supply chain to the core automakers we have today is that consumers can cheaply and easily get parts for their cars.  There are a number of national chains selling auto parts, such as NAPA, Advance Auto Parts, CarQuest, AutoZone, Pep Boys, etc.  These chains must manage their inventories and supply chain, thus mainly keeping parts that are the most requested and the most profitable.  Inventory space costs money, as well as being taxable at year end (remember all the inventory clearance, year end sales?).  If we had 500 different car manufactures, we’d have 500 different ignition systems, 500 different types of brake pads and so on.  We may get nifty new gadgets, increased fuel innovation and better pricing when we first purchase the automobile, but we’d pay for it as the car aged and needed repairs.
I would also question whether hundreds of startup automobile companies could maintain safety standards.  A “turnkey” approach to starting a new automobile company sounds like a shortcut to disaster when I consider what will happen to my family when someone plows into me at high speeds.  Did the vehicle I’m in go through the required iterations of crash testing and safety inspections?  When things are rushed, some things get skipped or overlooked.  Crash testing is expensive, and start-ups are likely to not be able to afford it.
Lastly (finally you say!), let’s examine where some of the best safety and comfort features were invented/innovated.

• The Air Bag was initially invented and marketed to Chrysler in 1967, and first deployed by Ford in 1971. Mercedes-Benz also patented a variation of the air bag in 1971 in Germany.  Merdcedes introduced the air bag into production in 1980.  Porche was the first manufacturer to make the air bag a standard feature.
• Disc Brakes were initially invented very early–in the 1980’s, but modern disc brakes were introduced by Dunlop in the UK in 1953 for Jaguar.
• Mercedes-Benz again first introduced anti-lock brakes to production vehicles in 1978.
• MacPherson struts were invented at FIAT in the mid-1920s and was first featured by Ford in 1949.

I could continue, but I think it is safe to assume that while a number of early innovations came from small inventors, the major features we think of today were pioneered at R&D facilities at companies who could afford them, namely large manufactures.  A real startup, Tesla Motors, has required over $142 million of investment to get a new car out, which still isn’t in production.
Seth, comments?