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Market trends: Buyers face a bewildering choice

It has often been noted how many more models there are available today than, say, 10 years ago. The number of model ranges on sale increased from 223 in 1996 to 318 in 2006 – an increase of 43%. There are three main reasons for this.

Firstly, increasing competition makes car companies hungrier to discover new niches. Secondly, the decline in the expense of simple metal-bashing as a proportion of the overall cost of the car means that making lots of different shapes becomes less of an issue. Thirdly, the advances in designing on computer means new cars are cheaper to develop.

However, this does not explain why there are now so many versions of each model range. The number of alternatives within a range can be bewildering. Currently, there are 90 versions of the Renault Megane (excluding the Scenic). So far this year there have been 140 different types of Megane registered, including previous generation trim levels.

Car companies never want to miss an opportunity, so like to split the model range into every possible combination of bodystyle, engine and trim level. Theoretically, every customer requirement can then be met and no-one should leave the showroom because they could not find their ideal combination. But is this really true?

There are two problems with the theory. Firstly, the chances of the customer being able to see the actual combination they want gets smaller as the model range gets broader. Secondly, if someone is interested in a particular range, should not the sales person be able to guide them into the available version that is closest to their needs? How many sales are lost by having only four trim levels rather than five?

One company that has tried to address this issue is Ford. Excluding the cabrio, which was not available in 2004, the Focus range has been pruned from 134 versions in 2004 to 99 today (excluding tactical special editions). Given that the Focus is the UK’s best selling model, the average sales of each version are close to 1,000 per year, which is pretty respectable.

At the other extreme lie models like the Volvo S60, which has 24 versions, but sold 3,052 units last year, meaning each version on the price list sold 127 units – less than one per dealer per year.

Given the bewildering choice of cars facing the customer (currently 3,400 versions and climbing), car companies should perhaps stop asking themselves how many versions they can generate from a model and ask themselves how few they can get away with.

Number of model ranges

The graph clearly illustrates the upsurge in the number of model ranges available to the car buyer

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