Holy Mother of Malaise! As the bad news keeps coming for Detroit, the reactions are becoming increasingly agressive. And now word comes from the Detroit News that US automakers are “taking a cue from their Japanese competition” by reducing the number of trim options on their vehicles. “The industry has way too many brands, too many models, too much choice, to be efficient,” Mike Maroone, president and COO of AutoNation, tells the DetN. The import approach of limiting options to trim levels “may not serve every niche but it’s a much more efficient business model.” But despite Detroit’s apparent acceptance that less complexity is a good thing, they still lag behind. Sure, Ford has cut the number of available configurations for the new Fusion from 2,600 in 2008 to 104 in 2009. But GM has only “streamlined” its Malibu and Cobalt to four main trim levels, while Chrysler can brag only of trying to cut its Sebring configurations down to 1,000 versions. On the engine simplification front, Ford is out ahead of its Detroit rivals as well.
Ford is announcing plans to offer a four-cylinder version of every car and crossover it makes by 2013. According to Automotive News [sub] EcoBoost turbocharging technology will allow Ford to double four-cylinder engine volume, and possibly even offer one for its F150 pickup. “We’re all about the smaller displacement as a way to drive significant fuel economy without sacrificing performance,” says Ford product development VP Derrick Kuzak. EcoBoost V6s will begin to debut this summer, as V8s are phased out from all Ford products but F150, Mustang GT and large SUVs. Four-pot EcoBoost engines should debut in 2010 with a new generation of Focus.
Detroit = Late to the party
Jack Baruth had a really great article about how the Japanese began the process of streamlining options and how it is a bad thing.
Its a no-brainer. My Honda had like 3 logical trim levels and 6 different colours and two body styles. The rest was dealer installed accessories. Good for the dealer, good for Honda, good for me. I didn’t have to pay for fog lights and an auto dimming mirror to get a sunroof or cruise control.
Well if they streamline options, I hope they keep the good ones.
EcoBoost V6s will begin to debut this summer, as V8s are phased out from all Ford products but F150, Mustang GT and large SUVs.
So how is this any different than what they currently offer? The Panthers are the only other V8 cars they make, and those are already basically fleet-only.
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I do agree though, that once the 2010 models come out GM is going to be making way too many different engines.
Well overdue. I too remember the days Honda’s motto was; “Honda, we make it simple”. I remember when there were three trim levels. In the base level you had 3 color choices. You could get a rt hand mirror or not. Floor mats or not. Get dealer installed AC or not. Choice of 5 speed or auto, same price either way. Was a bit disconcerting to have so few color choices. But a couple hundred thousand later, getting dark blue rather than black or red I wanted wasn’t much of an issue.
I also remember helping relatives wade through the options possible to get a Ford truck. A list of things wanted, and attempting to get the least expensive complex option packages to do it. Very frustrating and one more thing to dislike buying a vehicle. If you could pick each option one by one without dealing with inter-related packages you would have had choice. Instead you felt manipulated and screwed over to force buying things you didn’t want anyway.
If only they applied this concept to their brand management as well.
One gripe about Ford though, the ecoboost V6. I think its going to be a bomb. It would be great for an enthusiast vehicle but not much else. The fuel economy savings simply aren’t significant enough over a V8, while the cost is higher and the reliability likely lower. Ford should have come out with an ecoboost 4 cylinder first and waited for good times to put the 6 in high po versions of the Mustang and Fusion (oh yes I did leave out the Taurus).
I hate the feeling of being nickel and dimed for options. Mats – that’ll be $100. A cargo net – another $100. Seriously I would prefer no haggle, one price dealerships with the cars just coming in a max of three trim levels.
Baruth is wrong BTW. And sales have shown him wrong again and again.
Options are awesome. I remember wayyyy back in the day (i.e. driving my ’66 Mustang) the number of options you could get. You could really customize your car to your taste/budget/needs. Nowadays every one gets to drive the same fucking thing yippeee! Fuck it we should just have the Honda line up with 1 trim level and 1 engine/trans combo, everything they make, 1 of anything! Great business sense, shitty for the consumer yay!
Good King Bojack, Good! let the hate flow through you.
Meh. If I want the sunroof but don’t want to pay for the ‘sun & sounds’ satnav XM combo package, I’ll tell the dealer I ain’t paying it. If the dealer won’t bite, there’s between 2,000 to 6,000 other dealers (depending on brand) that will.
King Bojack, would you really be pissed if you wanted a base version of a car and had to suffer with alloy wheels, key less entry, abs, 4 wheel disks, etc. Why do all those have to be options? If you want a sunroof you are stuck with the better radio, fog lights, and a power driver’s seat, at the price that sunroof would have been without all the others. Will you really be offended? And if you want leather seats, you will have to deal with the nav system as well.
esldude:
Way back in 1976 I ran a leasing company. Hondas were available in about 3 colors and auto or 5 speed. 3×2=6 possible combinations.
While the 76 Olds Cutlass was the “most popular car in America” and there were about seven or eight pages of options. The ads said something like “we’ll build a million this year, NO TWO ALIKE. Order yours today.”
Look at Honda and Olds today.
Tell me how a long list of different options makes the cars more expensive, when they can produce several different series of cars from the same line?
If I’m paying the coin for a new car, I want to get exactly what I want. If I cannot, I may as well save the money and buy a used version that is two years old. If Ford wants to discourage factory orders, I may as well buy something made on the other side of the world.
If you go to the Honda website, there are 8 trim levels of the Accord for the sedan, and 6 trim levels for the coupe. Doesn’t seem that simple to me.
It’s basically a system to get you to buy options that are more profitable to the manufacturer – what the customer wants is secondary.
A long list of options makes a car more expensive by increasing the cost of the parts in question. The higher the volume of a particular part, the lower the cost per part.
Let’s say you make 100,000 cars total for both model A and model B. Let’s say model A has steel wheels standard, with optional 16′ and 17″ alloys. If they are divided equally it’s about 33,333 per wheel type. Now let’s say model B sells with the 16″ alloys as the only option. Now you are buying 100,000 wheels, and the price per wheel will be way lower, because tooling costs go to only one wheel type. This usually even makes the more expensive alloy wheel cheaper than the steel wheel would be at a more limited production run.
@ Morbo & MBella:
It’s not a price issue it’s a manufacturer issue. I want very basic cars with maybe a bell or a whistle. I don’t want to have the whistle in order to get the bell whether I pay for it or not. I drive a 95 Escort wagon with a manual and stock cassette/tape deck. The only “options” I’d really want it to have are a sun roof and perhaps a cd player. Soon I’ll have to be getting ambient lighting, heated AND leather seats (I live in Florida so I don’t really want either) etc. etc. so when I can afford a new car I will have to decide on which options PACKAGE I want instead of getting JUST what I want. To me more crap is just that, more crap. Would McDonalds be smart to stop selling individual big macs and force value meals on their customers?
It is not the amount of options or the amount of models that kill detroit, it is the execution of all those options and models. What is the point of keeping options simple if people don`t buy your cars because they are disgusted by cheap plastics and unreliable engines and poor fit and finish. You see, hyundai can sell Genesis, but Chrysler can`t sell cheap -end Sebring. The problem is not in the price, but what that due price can offer . And Us has always offered quiet poor diversity of engines compared to germans. Most of the engines they have that are modern,are simply borrowed from german opel or designed by koreans or japanese.
How excessive optioning impacts costs and reliability ? Well, first it causes a manufacturability problem and that drives costs up even for the base car.
If you care to think about it…
…. the guy bringing parts to the line now has to consult a shitlist to see what to bring and now, in the limited available area in the immediate vicinity of the line, has to decide where to dump it.
…. the assemblers on the line now have to consult their shitlists ; for one position it may need the selection of a particular wiring harness for another an extra control to be inserted in the dash etc etc down the line. And when they have that worked out they just can’t grab- as they would a standard part – now you’ve got them hunting and pecking to see where the line stocker laid the part amongst the multitude of other options that surround them. That’s an awful lot of stopping and thinking by a lot of people and that’s for the calling out of just one option.
It now becomes an assembly issue.
Suppose installation of that particular option is sufficiently rare – then the assembler may miss some necessary assembly requirement for a component of that option.
It now becomes a quality issue.
The tester has to consult a list to check off which options are present that will require testing. Believe it. This slows up the job big time.
Consider that most assembly and test jobs are efficient when the operator uses muscle memory and set choreographed procedures. The system relies on any defect to immediately interrupt that even flow and allow immediate tagging. Whereas multiple options are going to require the tester to continually consult a shitlist. Do you want the tester to be pulled away from his core function in order to service that paper work every five minutes. Of course not. You don’t want line workers wasting valuable time on anything that doesn’t contribute to the bottom line. It’s cheaper to fit a radio in every car than to remember which car in about fifty, say, won’t need an antenna mounting because one wanker, I mean customer, didn’t want that option.
In our business we had to resort to upcharging if the client wanted to omit something.
“Ok, you definitely don’t care for remote ductor operation ? OK then, that’ll be an extra $600 per unit, let’s see you have ten units here…” If a client really doesn’t want something then it’s fair that the client has to pay us for all the messing around we have to do on our side of the fence to change our procedures.
The auto industry may have to start trying that concept. Taken to extremes, building a vehicle having even less than standard features actually makes it a “custom” vehicle in and of itself. And the customer should be paying extra for that.
It may not play too well at first but once the buyer is apprised of these reasons I am sure they will see the need to become more compliant.
T2
Smart manufacturers/dealers should use options to seriously limit the unsold inventory they are carrying for the mythical impulse buyer.
Salesman: So you want a stick, v6, in red, with sunroof; that’s a an order against the factory Sir.
Customer: No problems, I just wants it the way I wants it.
Make the steady selling baseline house standard plain-Jane config in limited numbers and everything else is ordered against the factory.
Hang on, that sounds a bit too much like full JIT.
Detroit = WAY late to the party!
@ T2
I’m sorry, but customised assembly from an order-sheet or Bill-Of-Materials should be objective number one for high value manufacturers. If they can’t make it work, time to get out of the game.
My wife has us looking at new and late-model used Honda Odysseys. The toddler of the family has to have a “movie in the sky” since she doesn’t like bumping her head on the aftermarket pieces strapped onto the headrests.
Honda makes you pop for the EX-L to get the option to order factory DVD. This comes with leather seating AND moonroof. I hate sunroofs/moonroofs…I despise the outdoors, would rather have the extra inch or two of headroom, and don’t want to take the risk of developing leaks/squeaks outside the warranty period.
Plus, I like the idea of Honda’s VCM. Odysseys only come with “one” engine, but only the top two trim levels get the VCM with the extra 1mpg. Not worth the coin to upgrade just for the engine, and still not price-competitive to upgrade for the engine and factory DVD…over the life of the vehicle the extra fuel and aftermarket dvd system(s…I’ve found them unreliable) would still be less than the upfront cost difference.
Back in the late 1970s, “flexible” manufacturing was all the rage. The idea was that you could get options on the basic widget, because new computer systems allowed the various bits needed for an option to be added as required, by keeping track of inventory, etc. Worked great for the manufacturing company I was with at the time. Sales increased.
30 years later, this method is no longer viable. Just in time manufacturing is the main culprit if carried to the extreme, because spare parts lying around to be installed “sometime” offends the efficiency expert.
Surely, we can do better than this by presenting the correct parts to the assembler at the correct station. My father did this manually in 1940 when he got a summer job at a facility repairing Spitfire fighter planes outside Oxford in the UK, during the Battle of Britain, fer goodness sake. He was the computer. Apparently organizing things properly in order to customize a product is now too difficult. Pretty poor really.
You can pick two of the following: a) Any car you want, with b) any combination of options you want, at c) a price most people are willing to pay.
Again, pick two.
For a time there was a “virtual tour” of the new BMW 1-series plant. Can’t find it on the web now – maybe it’s been taken down.
Throughout assembly, the customer config travels with the chassis. Assemblers can manually check, and are shown at their station the config they should be assembling as the chassis passes by. It’s all done with RF serial numbering.
It’s the same at VW’s South African plant, most of Toyota’s newest (Thailand, even Australia, all Lexus plant). Even Hino.
At VW South Africa, they can build a Golf/Rabbit for 16-20 countries in over 1200 variations with each one completely different. From memory the junk rate was pretty close to nothing, and mostly they were recoverable into other customer cars. (Forgive me, the numbers might be out slightly).
I think that one way to look at this is to keep it simple until you are good at it, THEN you can add complexity.
Detroit is like a kid who finds himself in college never having finished 3rd grade. Go back, learn how to design, manufacture, sell and service a limited number of good vehicles well. They never really learned that, and it shows.