The logic of micro factory retailing In the automotive industry the prevailing logic is one of cost reduction through economies of scale in large factories producing at high rates of output. These large factories then require a geographically extensive market to absorb the volumes produced, and hence in turn require long logistic chains together with networks of franchised dealers in order to reach that market. In essence, micro factory retailing (MFR) refutes that logic by placing small factories within the markets they serve - and so eliminates the distinction between production and retailing. This article compares the concept of MFR as developed by the Centre for Automotive Industry Research with the traditional factory plus distribution network which, in various ways, is increasingly inadequate to the task of meeting customer needs.