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Are carmakers killing off the optional extra ‘upsell’?

Phil Nothard, a Black Book editor at CAP Automotive, said: “The packs allow the build to be better controlled and analysed for trends, and we need to consider that many more options are now becoming a standard expectation. Once, air-con was always a desired option, now you would struggle to find a new car without it as standard. This can now be said for satellite navigation, etc.”

“The model line-up has unquestionably risen over the years to in excess of 9,000 derivatives available in 2014. However, the Vauxhall Adam had over 85 trims to choose from launch but through time Vauxhall will understand what sells and what to stock,” Nothard added.

At Vauxhall, more than 60% of Adam sales have been on PCP, which has helped the dealers in selling options given that the customer is spreading the cost over monthly payments.

A spokesman said: “It’s amazing how as much as 80% of retail sales are now financed in some way and the majority are PCPs. People are not ‘owning’ their own cars anymore.

“It’s not difficult to mount up the spec on a PCP with £5 here for one thing and £10 the next.”

For example, adding £1,200 of options to a new Adam on a three-year Vauxhall Flexible PCP with zero deposit can make as little difference as £25 to the monthly payment.

MG Motor UK is another carmaker fully committed to giving its dealers upsell opportunities. It has a no-haggle policy on the price of its cars, with dealers earning a fixed amount. However, at the launch of its MG3 supermini in late 2013, the carmaker said its retailers could sell up to £1,500 worth of personalisation options, from graphic packs and special colours to a lux pack with leather-fronted seats, to earn extra profit.

Mike Latimer, managing director of MG dealer Michael Edwards, said the personalisation options available to customers on the car mean additional profit opportunities for the business. Latimer said it is from £150 to £850 per MG3 sold, but with F&I add-ons and accessories the margin is an average £900 – or 8% of the car’s transaction price.

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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.

  • 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.