[Paris 12th Reuters]–For Emily Marelve (41), who lives in Calvados, northern France, it was easy to choose the body color of the new Renault “Arkana” that she had reserved for purchase. She had only three choices: black, pearl white and gray.
Marelb and her husband placed the highest priority on getting the car to arrive early, so I decided to go gray immediately. “I was delighted to hear that the new car delivery could be delayed by six months to eight months on TV, and then I was told that it would arrive in 30 days. And in fact, I really got the new car in 15 days. It was great, “says Marelb.
Against the backdrop of global semiconductor shortages and other supply chain disruptions, European automakers are working to narrow down the options offered and deliver new cars to customers by the end of the summer vacation period. It’s part of the composition.
So far, the automobile industry has invested a great deal of resources in making detailed specification changes in response to customer requests. As a result, the manufacturing process has become complicated and profits have been squeezed. The flow is about to change drastically.
Tesla, a major US electric vehicle (EV) company, has been boosting profits by preparing only the minimum necessary options from the beginning, but existing manufacturers are all following Tesla.
If consumers want a car as soon as possible, their choices are limited. Renault’s “fast track” service at the SUV (Sport Utility Vehicle) Coupe Arcana guarantees delivery in up to 30 days, usually waiting an average of 5 months.
Instead, the body color is 3 colors instead of the conventional 6 colors, and there is only one type of interior level and engine. Orders received via Fast Truck in June accounted for half of Arcana’s new car registrations in France.
According to Renault, if the buyer requests additional options, there will be no guarantee of delivery.
A source close to Renault told Reuters that the company expects these simplifications to spread throughout the industry. This is because the problem of supply constraints is unlikely to be resolved early.
For a long time, existing manufacturers have been promoting ways to appeal to customers by refining their ability to respond to demands in detail with body colors, interiors, and accessories.
However, according to the analysis conducted by JD Power of automobile consulting in 2020, 98% of all vehicle types have very few sales of less than 50 units, which is only 25% of the total sales. The remaining 2% of the types account for 75% of the sales volume.
Regarding the famous car “T-type Ford” produced by Ford Motor founder Henry Ford, “Our car can be selected in any color, as long as it is black” for production efficiency and quality emphasis. From the time when it was, you can see how “multi-product” has progressed over a long period of time.
While some major manufacturers have occasionally complained about the need to reduce options, they have also been keenly aware of the difficulty of doing so.
For example, there are 70,000 large pickup trucks in the US market, JD Power analyst Doug Betts explains. “The industry has tackled this problem many times, but the solution is unclear,” he said.
“The concern is that without data on which options to truncate, you could lose your sales.”
However, the industry as a whole faces the need to simplify the manufacturing process in order to cope with the ongoing supply constraints and the enormous costs associated with electrification. That is changing the situation.
Dennis Shemur, an analyst at S & P Global Mobility, said, “The automotive industry is experiencing a genuine paradox: while we want to produce on demand, our customers are in stock by reducing the variety of specifications. It’s easier to choose the model you want from. “
“The reduction in diversity is’three-way good’,” she added. “Even the Germans will follow the trend.”
In fact, in February of this year, Volkswagen (VW) narrowed down the number of European-spec vehicles to one in order to shorten the delivery time of the electric vehicle (EV) “ID3” as a measure against parts shortage.
The lowest price of a new car using Renault Arkana’s fast track is 38,630 euros ($ 39,348), which is equal to the regular price of Renault Arkana’s top model “RS line”, which will lead to an improvement in profit margin for the company. ..
On the other hand, from the standpoint of a customer like Marelve, who originally wanted a full-featured RS line, the only way to get a car during the summer was to choose a simpler model.
The new Stellantis French brand Peugeot “408” will also offer only two interiors. Peugeot Product Director Jerome Michelon said, “The new 408 focuses on the most demanding interiors. Not too many options makes it easier to specify your car on the website. And it will be quick. “
(Reporters by Gilles Guillaume and Joseph White)