Carmakers Turn Into Toy Makers

If something is too
big, enlarging it
may correct it:

a skinny thing
acquires great force
pushed next to nothing.
-- "Immoderation" by A.R. Ammons

Skinny things among big ones may not live to see the morning.

Back in 2000, the world was aflame with excitement over Dean Kamen and his top-secret "Ginger" technology. "As big a deal as the PC," said Apple (Nasdaq: AAPL  ) CEO Steve Jobs -- and Jeff Bezos of Amazon.com (Nasdaq: AMZN  ) also backed the two-wheeled opportunity.

And then everything stopped. The Segway never made the big splash it was supposed to.

Now the Segway is back in the news with a well-known partner. General Motors (NYSE: GM  ) plans to sell the PUMA -- a Segway-like mini-car for city traffic -- starting in 2012. Will this thing save both companies? Could Toyota (NYSE: TM  ) and Honda (NYSE: HMC  ) be left flat-footed by a confluence of genuine, all-American know-how?

I don't think so. At least, not in the form GM is planning to show this week. Let me put it this way: Would you drive a high-powered electric wheelchair in city traffic?

Didn't think so.

Kamen's intentions with the Segway were admirable, and still shine through in its GM-kissed incarnation: Remove bulky 4,000-pound machines from busy city streets and replace them with something far lighter, more efficient, and safer. But the safety goal looks far away right now.

If everybody had a "Segwrolet" or a "Saturway," then the problem would be solved. A high-tech navigation system plus extreme maneuverability are selling points, but the safety issue remains a concern. Run an Escalade into one of these contraptions and tell me who walks away. "Sorry, sir -- my forehead made a dent in your bumper."

Even a Corolla or a Nissan Motor (Nasdaq: NSANY  ) Sentra looks fearsome when you're strapped into a tiny, one- or two-person people mover -- like this PUMA. Until the population of Seg-something drivers reaches critical mass, I don't see anyone really wanting one. It's the chicken-and-egg syndrome. This time, nothing comes out first.

Back to the lab again, guys. I know that Segway wants to go public, and maybe hopes to use this product as a springboard for those ambitions. Best of luck. I'm not holding my breath waiting for that IPO. The PUMA can't save anybody.

Further Foolishness from Motown:

Nissan is a Global Gains selection. Apple and Amazon are Stock Advisor picks. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Nissan, but he holds no other position in any of the companies discussed here. He wouldn't be caught dead in a PUMA. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (4) | Recommend This Article (6)

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  • Report this Comment On April 07, 2009, at 4:23 PM, dividendnut wrote:

    GM?? Who are they? The new HOG? How were they successful all of those years, or were they?

  • Report this Comment On April 07, 2009, at 4:35 PM, outoffocus wrote:

    "Would you drive a high-powered electric wheelchair in city traffic?.....Didn't think so."

    Thank you!

  • Report this Comment On April 07, 2009, at 5:27 PM, mattack2 wrote:

    People ride bicycles 'in traffic' all the time. I realize most commenters are making fun of this thing, but I hope it actually comes out.

    (Though admittedly, I *also* think GM should go out of business, because they had a viable electric car 10 YEARS AGO.)

  • Report this Comment On April 08, 2009, at 12:11 PM, Origin97 wrote:

    Has anything been released regarding cargo capacity and top speed? To me a bicycle is a cleaner, less expensive and more healthfull alternative to driving. A bicycle also allows for travel over varying terrain. Plus I am a huge Ford truck fan. The Honda element is awesome as well.

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