Who is currently in Germany buys a new car because of the Semiconductor shortages in the automotive industry don’t just wait months for the vehicle of your choice. The buyer also has to make quite a few decisions in order to put together their dream vehicle.
New car buyers are not only faced with the choice of whether the rims should be five- or ten-spoke, made of aluminum or possibly steel. Seats are a chapter in themselves – they can not only be ordered with numerous leather or fabric covers, but can also be electronically adjustable, with or without seat heating, ventilation, massage function or lumbar supports that are intended to compensate for the curvature of the spine. There are steering wheels – depending on the equipment line – in at least half a dozen variants. Interior displays are offered in different sizes, with or without a navigation function, and depending on the package selected, with different assistance systems.
So the agony of choice is great – and the increasing complexity is not only for the customers, but also for the car industry to the problem. This is what the authors of an as yet unpublished study by the management consultancy claim Oliver Wyman, which manager magazin is present. The “personalization” of cars “according to the needs and preferences of the individual owner” has long been a driver of the automotive industry. But it seems to be “out of control”, it says in the Wyman report “The Good, the Bad and the Complicated – Dealing with Car Complexity”.
Electrification significantly increases the number of model variants
According to the Wyman authors Roman Daffner and Sören Juckenack, many manufacturers are not even aware of how much the large number of variants costs them. For example, some manufacturers offer 15 different seat fabrics per model, including electrically or manually adjustable seats, which in turn lead to several different door panels for the appropriate door fabric covers.
Each of these parts must be drawn, given a part number and discussed with the supplier. “That drives up the effort and costs,” says Daffner. According to the study, between 30 and 40 percent of all employees at car manufacturers take care of variants and the resulting complexity problems – and the number of “complexity administrators” at car manufacturers will probably continue to rise.
In the opinion of Daffner and Juckenack, the problem of the wealth of variants will worsen in the medium term. The reason: In addition to traditional models with combustion engines, more and more pure electric car models are being built. From 2025, the number of vehicle variants at major car manufacturers will increase by 50 to 100 percent, the authors write.
Premium manufacturer in the equipment dilemma
After all, the problem has already been recognized in the industry, says Daffner. “Everyone heard the shot that with electrification they also have to reduce complexity.” The question is how? The principle “a little is good, a lot is bad” does not apply across the board, says Daffner. The manufacturers often earn a lot of money from the extras that are subject to a surcharge. Especially German manufacturers would have to offer a certain amount of customization options with their rather upscale buyers and prices. “That they can offer and master this is one of their core competencies.”
According to the study authors, an obvious approach is even for premium car manufacturers to start with the different combustion engine variants. Instead of developing several different units for different horsepower figures, the performance of a single engine type can also be limited by the software. This in turn also saves costs, because time-consuming road approval tests by the authorities are a bit eliminated.
Basic variants: inexpensive for customers, expensive for manufacturers
According to the consultants, another starting point is the particularly inexpensive basic variants that many manufacturers offer. They cost the customer little on paper, but are only provided with a narrow-chested air conditioning system and the cheapest rims, for example. Such basic variants are developed primarily in order to be able to offer customers the vehicle at a certain price. However, the basic variants are often only bought by very few car buyers. Nevertheless, all of the parts installed there have to be developed and kept in production, which is costly, says Sören Juckenack.
In addition to looking at production and development costs, the authors also take the customer’s perspective in their study. It is important not to overwhelm customers with too many options when configuring new vehicles. “The car manufacturers should set priorities in their configurators,” says Juckenack.
One idea: online configurators could offer users the four most frequently chosen vehicle configurations to choose from and offer recommendations at every step. The software could, for example, ask what value car buyers attach to options such as comprehensive assistance systems, particularly good sound from the stereo system or the best possible integration of mobile phones into infotainment. Recommendations for a suitable model combination could then be derived from this – instead of clicking through countless submenus for half an hour.