Monday, March 31, 2008

The Tyranny of Car Options

U.S. car companies go back to black
| Business
| Reuters
: "Ford's chief of marketing, Jim Farley, who was hired away from Toyota Motor Co (7203.T: Quote, Profile, Research) last year, said he was stunned to find that Ford was offering 100,000 combinations of options on its entry-level Focus sedan. Some 80 percent of Ford's sales came from just 4,000 of those combinations, he said.

In response, Ford has cut complexity by reducing the number of 'buildable combinations' of the 2008 Focus by 99 percent. On the 2008 Expedition, it has cut combinations by 95 percent."

Years ago when my wife's dad still worked at Ford he was frustrated by the fact they didn't really know how much it had cost to produce and market a car when it was driven off the lot by a customer.

When we were looking at new cars it was also frustrating to ask the dealer about the availability of a car with all the extra safety options and they would have to call all over the state to find out if they had it and then find out they didn't have one in the entire state, but there was one that had all but one of the extra safety options and another with all but two. We were astonished, why would they do that? For entertainment options we could see going al a-carte but extra safety options you would think would be all or nothing, either you wanted them all or not.

Dell has built its business on mass customization, you order exactly what you want and they build and ship it to you, fast.

Apple strives for Less is More philosophy, it builds what it believes to be a small set of nearly prefect products. They have 2-3 option packages for each of their product lines.

The car manufactures have chosen the worst possible combination. Mass customization without the ability to order what you want. So they have all the complexity without the customer satisfaction.

It looks like the car manufacturers are choosing the Apple route. Fewer options combined into rational option sets. I think that is a great idea. Most people don't really care all that much about the car they buy, as long as it does what they need and looks good doing it.

It would be great to have the question, "What are you looking for your car to do for you?" be the starting point rather then "How can I help you today?"

That said, with most manufactures going this route, that means that there is an opening for one that goes the Dell route and allows you to order exactly that car you want.

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