Automakers Will Boost Profits With Build-To-Order, Researcher Predicts

Compiled ByGina Protopapa The auto industry will begin building vehicles customized to individual consumer orders over the next four years, says Forrester Research Inc. The Cambridge, Mass.-based research firm expects the build-to-order (BTO) approach to car manufacturing and sales to improve market responsiveness and bolster the auto industry's sagging profits. "The end result will not only be happier, more loyal customers, but reduced costs and increased margins, as well," says Forrester senior analyst W. Daniel Garretson. Implementation of BTO capabilities could reduce dealer lot inventory by 50%, saving carrying costs of more than $150 per vehicle, the firm suggests. It predicts that by 2010 nearly 20% of vehicles will be built-to-order.