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Are carmakers killing off the optional extra ‘upsell’?

2

By Tim Rose

Dealers could be in danger of having the new car upsell opportunity taken out of their hands. While some car manufacturers are determined to allow customers to stamp their own personality on their next car, plenty of others are reporting that they’re paring back the optional extras in favour of a well specified car that the customer can buy out of the box.

This puts the manufacturer even more in control of exactly what is being sold, and how, but the risk for the dealer is that yet more opportunities to increase revenue and profits are being taken away. This comes at a time when dealers’ incremental earnings from GAP and finance are already under the spotlight from the Financial Conduct Authority.

It seems that what has been traditionally known as an ‘upsell opportunity’ makes many car manufacturers a little uneasy. Having contacted numerous carmakers for this feature, many don’t actually want to be seen as encouraging ‘upselling’. Perhaps they worry it has connotations of persuading the customer to buy something they didn’t actually want. Many talk about wanting ‘customer-pull’ with the consumer making all their own choices, yet ‘product-push’ still seems endemic in the industry as manufacturers set dealers higher volume targets with bonus attached.

 

Has ‘selling’ become a dirty word for carmakers?

With some manufacturers having introduced ‘product geniuses’ and ‘showroom hosts’ to their franchised networks, and with the availability of car configurators on most manufacturer websites to let prospective buyers build their ideal car, the trends suggest ‘selling’ is becoming a dirty word.

Having a more limited catalogue may result in damage to manufacturer profit and in turn dealer profit, resulting in either a manufacturer-dictated target or simply a silent need to sell more vehicles.

At East Midlands-based Sturgess Group, chairman Chris Sturgess said: “Retailers need to push their manufacturers to make sure they continue to develop options and accessories that help keep the products exciting and relevant.”

Hyundai Motor UK said its focus is on simplicity of its trim strategy, rather than offering an extensive options list, so that its cars appeal to a broader spread of consumers, who will expect to pay the price at which the car was advertised.

A spokesman said: “Hyundai does not offer a broad range of optional extras across the majority of our models.

“Rather we have a trim strategy, which includes varying levels of equipment, and move customers between these trim levels so that they gain the equipment they desire. This provides our dealers with a simple and clear message when communicating product messages and standard equipment to customers.”

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Comments

  • Tom Booth - 06/02/2015 09:14

    Manufacturers are taking control because the retail network can't and won't sell accessories. Sales people are only interested in Gap, finance. It's been like this for years. Well done Vauxhall for taking the initiative and protecting your brand whilst offering the customer a high spec car. Just what the customer wants. Retailers don't care about accessories and even aftersales is coming second best now. When will the retail network learn. Before its too late I hope.

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  • Rob Chisholm, Managing Director, Applewood Vehicle Finance Limited - 06/02/2015 11:47

    None of the manufacturers from the far east have ever offered extensive optional equipment lists - keeping it simple has been their mantra for no reason other than the logistics of shipping cars half way around the world. Typically their customers have also been more price conscious and so are not attracted to such 'fripperies'.

    The European manufacturers can afford to offer a more personalised build simply because of being able to build and hsip a car in half the time of a manufacturer from, say, Japan. What is curious is that all of the manufacturers such as Nissan, Toyota and Honda who now build a significant number of vehicles in the UK/Europe have maintained such a short options list.

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