It’s Time Luxury Automakers Quit With the Endless Variations
My father once told a tale that seemed to take place in a galaxy far, far away. He spoke of a Mercedes-Benz vehicle lineup that consisted of a few sedans available with gasoline or diesel engines, along with a few coupes (he owned a giant two-door Benz from the 1972 model year). After visiting a Mercedes dealership in the current millennium, he was bewildered by the proliferation of models and unimpressed with most of them. To him, a Mercedes meant a big, classy car that would crush any pretender in its wake — the German tanks of yore — and not a tiny sedan that seemed to have lost its back seats.
It turns out these ruminations were not imagined “in my day” perceptions of an old-timer. According to Bloomberg News, German automakers have increased the number of vehicles in their lineups by 25% between 2011 and 2014 alone. That’s not mentioning the explosion in offerings from Mercedes and other automakers that occurred in the 1990s, back when Audi sold a total of 10 cars. It has come to the point where automakers cannot even stock the vehicles they produce in their showrooms, and it turns out consumers don’t want or need most choices they have. A correction seems to be in order.
A few good cars?
Tesla is unlike every other automaker because of its limitations in scale, but its electric vehicles (of which there is one with three powertrain options) do provide a relevant example. Build one car very well and consumers won’t want or need much else. Later on, expand the roster to include a utility vehicle and a more affordable, smaller model of the flagship. But do not hedge bets by providing a dozen trims of cars that are stunning in their original form.
Bloomberg cited Porsche example as an example worth mentioning. When the number of Porsche 911 models hit 22, that gave consumers more trims than paint colors available. Let’s call it the tipping point in Stuttgart.
Porsche decided 22 models of the 911 was good enough for now, so that will be the limit for the years to come. Audi, the automaker whose lineup expanded by 400% between the 1990s and the present, may have a hard time convincing consumers of the difference between certain models on its own showroom floors.
A quick glance at the BMW website presents a dizzying experience in virtual auto shopping. Forget about the available 2, 3, 4, 5, 6, or 7 models; ignore the performance cars and crossovers; scratch the electric vehicles; and there are still three models of the 335i to peruse. BMW claims it offers “three ways to amaze” with the 335i, but do consumers actually want more than one? What’s amazing is consumers have the 320i sedan, 320i xDrive, and four 328 models before looking at the three 335i models and the hybrids, wagons, and Gran Turismo variants. Did we mention we’re still on the 3 Series?
Consumers and the endless choices
Bloomberg cited the case of a General Motors Corporation dealer with showrooms in Berlin. Since the dealership couldn’t possibly squeeze the number of GM Opel vehicles onto the premises, staff members have begun showing the cars to shoppers on touchscreens. That’s correct: they are going to dealerships to look at cars on computer screens.
One Opel dealer reported that, while automakers feel like they are wowing their audience, most consumers could care less. Set aside how many of the new BMWs are spectacular pieces of machinery. The typical human brain can’t process that many vehicles on a meaningful level. Automakers are sacrificing profitability (lost in the development and production process) by constantly producing new models though it is unlikely to help them sell more cars.
More vehicles are in development and headed to market from Mercedes, Volkswagen, and other automakers in the next five years, so it will get worse before it gets better. Porsche is unique in setting a temporary limit on endless variants. Barry Schwartz, author of The Paradox of Choice, told Bloomberg News the explosion of vehicle offerings is probably working against car makers.
“All these options reduce the likelihood that people will choose any, and reduce satisfaction when people do choose,” Schwartz said. It’s enough to make someone head home and drive the ’72 Benz in the driveway.