The other day it struck us that in a competitive, global auto industry, it must be immensely challenging for any manufacturer to achieve a price advantage. In many instances its the same components, from the same suppliers, with prices finely adjusted with the use of technology, and consultants.
Most vehicles in the various price segments display the same components and pricing philosophy irrelevant of the manufacturers. Uncanny the similarities between the manufacturers to achieve, arrive at a price point.
Which begs the question what constitutes a compelling difference?
Styling: As we have mentioned on numerous occasions that styling makes a compelling difference, while bending sheet metal does not cost more money.
Interiors: At times you would imagine that every manufacturer attended the same 3 day seminar in interior design. At this price point we offer this, at another price point its different materials, and so on. We often wonder the provenance of the leather, and the various imaginative names for what used to be called vinyl.
Powertrains: In Canada All Wheel Drive is popular and in demand, as we say its the idea of transcending winter. In most instances its a FWD platform converted to AWD that fill the requirement. Engines persist in having a marketing perspective, even if a 4 cylinder with a turbo is as good as a 6 cylinder, or a 6 cylinder with a turbo is as good as a V8. Transmissions...when you can easily get an 8 speed automatic, anything less than a 6 speed might be perceived as silly cost savings.
Fuel Economy: CSM (Citizen Main Street) desires an intellectual confirmation that their choice of an AWD vehicle, with more than less ground clearance will deliver some sort of fuel economy.
We can keep on going, surely you see the emerging picture....not much of a difference yet except for styling.
Features: They are obvious, tangible, perceived as value or added value. Each manufacturer makes their own decisions, establishes a direction regarding the features that are offered. Obvious they are seeking a competitive advantage.
Infotainement: You could also call it the center of the dash...no 20 cm screen you lose on the higher priced vehicles. Obvious that the various forms of connectivity are expected. Some manufacturers get in all sorts of situations here, while others are several steps ahead. The rule is the more the better.
Emotional Appeal: We are still humans, we still get emotional about vehicles, and some vehicles have more appeal than others, especially if one is an enthusiast, or a gearhead. The manufacturers with the storied brands have an easier time, than manufacturers with brands that are seeking a position. While some upstart brands are perhaps showing everyone else how its done.
Execution: How a manufacturer executes its car(s), makes a huge difference, especially that each manufacturer has their own "execution philosophy" which is part of their brand DNA. In some instances the "leadership team" has moments of genius, in others its complete brain fades. Suffice to say that one of the reason some cars do not sell, is the poor, non competitive execution.
Back in the day, there was MSRP, Dealer Invoice (a closely guarded secret), Holdback (usually refunded to the dealer quarterly), and PMA (Past Model Allowance) when the new models came out. If an individual knew a dealer, often the dealer would take out his invoice, show it, and ask the individual to give him a fair profit. You wish it would be that simple today...at a time of dynamic pricing where the deal provides a measurable competitive advantage.
The Deal: Its a tactical tool to achieve monthly results, it serves different strategies for different manufacturers. One manufacturer is strategically intent of preserving its market position, and will use a "the deal" to protect or gain. Another manufacturer has a few too many execution brain fades, and will use "the deal" to move the iron. Yes...and every other situation that comes along.
Does knowing the cost of a vehicle give you an advantage....perhaps!
Does having a crystal ball to visualise the next deal give you an advantage, defenitely!