Does the Australian car market need to be so complex?

Buying a new car should be a relatively stress-free process.

Understanding the product on offer and knowing what you’re getting for your money are two fundamental parts when making your decision.

After all, this is likely to be your second-biggest purchase ever, next to your primary residence.

Consider what it’s like to purchase an Apple product. Take, for example, an iPhone. There are few variants, and no options to pick from. Then there’s the MacBook, which, due to the nature of the product, has four main hardware options to choose between.

Alvin Toffler’s theory of overchoice, or choice overload, doesn’t occur here. There’s nothing overwhelming about making a decision to buy their product.

Where it does occur however, is within the Australian automotive landscape, of all places. Particular car brands seem keen to make the buying process overly complex and difficult to navigate, despite most successful brands doing the complete opposite.

As an example, one car brand that I investigated had three versions of the same car, each with six engine choices. Once you’ve sorted that out, you have two versions to pick from, then a choice of 60 different options to configure.

It would take a newbie many hours to begin to understand the complexity of some of these configurations at home, in their spare time; which it seems more and more are actually doing.

Nowadays, consumers are more informed than ever before. Dealer sentiment isn’t crash hot, and people are looking to get in-and-out as quickly as they can, seeing the bricks and mortar stores as just a place to transact.

CarAdvice is part of the chain, too. People are reading our reviews, getting an expert opinion, in order to better frame their decisions.

So, if everyone is conducting a heap of research on their own time, why not just make it nice and easy for them?

This topic doesn’t just span vanity options. With particular brands, usually the more premium, higher-end ones, they often bury driver-assist technologies such as a 360-degree parking camera, full-speed AEB, and others, into packages with long-winded obscure titles.

It’s easy to assume that if a sub-$40K Korean car gets all these features, that a $120K-and-some European car will have them too. Sadly, that isn’t the case.

This topic becomes quite interesting the deeper you dig.

I’ll happily put it on the record that, previous to my time at CarAdvice, I was once a humble product planner.

They’re considered unsung heroes of the industry, to some degree. Busy bees, who are making the choices of how to specify a car for our market, from colours, wheel design and interiors materials, right through to profitability and potential market share.

During time as a product planner, I quickly learned that economies of scale always prevails when negotiating the per-unit cost of a car for our market.

Offering a sunroof on 100 per cent of all examples of a particular variant sold in our market will mean you’ll receive the sunroof for much less. Generally speaking, car brands will pass this on to their customers in some way, shape, or form.

Bad example, maybe, as trying to sell a black car in northern Queensland with a compulsory sunroof will take time, if it ever happens, but it lands the point.

Things are cheaper in bulk.

However, brands do make a profit on selling options. So, there needs to be some avenue for up-selling.

But it seems a portion of brands are just taking this too far.

Trading on vanity-based options like fancy coloured interiors and huge big wheels is a logical approach. We would be better off however if all stopped attempting to trade on things like driver assist systems, 360-degree cameras and safety technology.

Not only would it begin to create a uniform approach to the levels of safety in a car, but it’ll also simplify diversity.

Add the layer of economies of scale, and cars should naturally begin to become cheaper, too.

There’s always the counterargument, that most people will choose the option anyway, and by not including it as standard results in a lower visual list price or drive away price, for marketing purposes.

But as already said, if customers are already doing their research to the degree that they are, this trick will not fool them. Brands offer online configurators which build cars to a chosen spec, and show the price too, so that counter point becomes redundant in a roundabout way.

This isn’t the case with all brands, however. Some are out there rationalising, simplifying and stripping away options in order to make the choice easier.

There’s an interesting continuity between brands who are continuing to go from stride-to-stride in our market, and brands who’ve stripped their line-up to core offerings with a few niceties either side.

Consider 'Brand X'. A vehicle in their SUV range has seven versions, with different engine choices at each variant, totalling 14 possible vehicles to purchase.

Brand Y's same segment offering only has four versions. However, there are multiple option packages that can be had singly, or in combination with each other, across most of the range. Then there's also a layer of interior trim colours to navigate, which is only available at one variant level, bearing in mind.

However, with a quick bit of mathematics, it turns out that there's actually 65 possible versions of Brand Y's offering to purchase.

Interestingly, in 2020, Brand X outsells Brand Y at just over four cars to one.

It isn’t the golden rule to success, but removing option-paralysis seems to be working for some.

The final supporting argument, that dovetails nicely into the previous point of finding proof in the pudding, is our geographic location.

If you live in the same locale as where the car is manufactured, it may make more sense to offer everything under the sun to the customer. The time it would take from a customer placing an order to receiving a car could be a month or two.

Currently, if you place an order for a car made in Europe, bespoke in a way that isn’t able to be fulfilled with local stock, you’d be expected to wait at least nine months, likely longer, depending on the car.

You’re generally shopping for a car over a three-month period, culminating with wanting it then and there.

Imagine being told that because of the complexity of your configuration, that you failed to notice that if you opt for package A, that it affects package D, and thus your shiny silver wheels become unavailable.

Or, that it is possible, and you’re happy to sacrifice the affected package, but then your car becomes a special build that you’ll see sometime next year.

Depending on what you’re buying, you may either shoot for local stock, reconsider another competitor option, or worse-yet, head home, dwell on it, and not actually decide to go ahead with the purchase.

Reducing complexity for our market will benefit consumers.

Let’s hope others take the lead from those flying the flag of rationalisation.