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Unbundling options increases average price

Discussion in 'Fred's House of Pancakes' started by bwilson4web, Mar 8, 2016.

  1. bwilson4web

    bwilson4web BMW i3 and Model 3

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    I saw this in Autoline Daily: AD #1815 – VW Admits Financial Damage Caused, Ssangyong Plans Jump Into U.S., Cadillac Unbundles Option Packages – Autoline Daily

    CADILLAC UNBUNDLES OPTION PACKAGES

    Yesterday we reported on how Cadillac boosted transaction prices by an average of $5,000 per car last year. One of the ways they figured out how to do that is by unbundling option packages. Automakers like to bundle optional equipment because that makes the assembly process simpler. But that can also make those packages pretty expensive. For example, if you wanted a panoramic sunroof on your Cadillac, the mandatory upgrades and package could come close to $10,000. That was too big of a step for most most customers who simply would not buy it. So now Cadillac is unbundling its options, and wow, is it working. On the Cadillac CTS alone transaction prices shot up by $8,000. In the luxury segment, at least, you can afford to be a little bit more inefficient at the assembly plant by letting your customers buy cars the way they want them.    ​

    Toyota should read this carefully and think about it. I did not buy the advanced safety feature in 2009 because it was bundled after buying every piece of expensive and unwanted eye-candy. That same problem exists today and it isn't as if this is such a hard problem to solve:
    • Web page to build your own with a menu of factory options -> gives a configuration order number
    • Web page for dealer with dealer and port options -> gives a modified configuration order number
      • Order price w/o trade-in or other incentives (available upon visit, contract, deposit)
    Now it would require a custom wiring sets during assembly but there may be a modular approach. Regardless, it would mean we could order what we want and everyone gets a chance for a fair product and at a fair price.

    Bob Wilson
     
    #1 bwilson4web, Mar 8, 2016
  2. bisco

    bisco cookie crumbler

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    they gross more per car, but what does the lost efficiency cost them?

    as a consumer, i would love it. but i noticed with cable tv, that when they unbundled, the price for only the channels i wanted was higher than the package which included all those channels and more.
     
    #2 bisco, Mar 8, 2016
  3. bwilson4web

    bwilson4web BMW i3 and Model 3

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    They also sell more cars because we're not tempted by a better stack from their competition. It is called agile manufacturing and extends beyond higher prices across the board.

    Bob Wilson
     
    #3 bwilson4web, Mar 8, 2016
  4. fuzzy1

    fuzzy1 Senior Member

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    I seem to remember mostly unbundled options back in my childhood when my parents were ordering a domestic car.

    The bundling that appeared later was a mixed blessing, good when finding a bundle with many of the options I wanted. But the marketeers progressively got 'better' with their bundling packages, to the detriment of my checkbook.

    With longer transportation pipelines, the Japanese-label cars always had fewer option choices than the U.S.-label cars.
     
    #4 fuzzy1, Mar 9, 2016
  5. Trollbait

    Trollbait It's a D&D thing

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    The issue for a mainline make to unbundle versus a luxury one is the volume of cars going down the line that likely has a higher percentage of automation. The lower production volume, and higher profit margins, make switching easier to do for the luxury line. Switching the ordering process for unbundling is the easy step.
     
    #5 Trollbait, Mar 9, 2016
  6. Mendel Leisk

    Mendel Leisk Senior Member

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    A few years back i cut the cable and hooked up a DIY antenna. All we were watching was the evening news anyway.
     
    #6 Mendel Leisk, Mar 9, 2016
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  7. bisco

    bisco cookie crumbler

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    not to derail, but we (and when i say we, i mean my wife:cool:) watch about a dozen cable stations which unfortunately are not available elsewhere. that leaves us tethered to their $100./mo. fee. ah well, there are other places to cut the budget, if necessary.
     
    #7 bisco, Mar 9, 2016
  8. Mendel Leisk

    Mendel Leisk Senior Member

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    We're doing a lot of Netflix and ShowRSS
     
    #8 Mendel Leisk, Mar 9, 2016
  9. bisco

    bisco cookie crumbler

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    right. my kids do the same. no cars and no cable. but you can't get project runway, american pickers, golf channel, local sports and various other programs on those media technologies.
     
    #9 bisco, Mar 9, 2016
  10. Mendel Leisk

    Mendel Leisk Senior Member

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    On our antenna we get all the Canucks Play Off games (could be a big zero this year), and any regular season games that fall on a Saturday night. We get maybe 5 local channels, not that many, but they're rocking high-def, and a fair bit of weekend golf/football.

    American Pickers is on ShowRSS. It's one of those semi-legal services, I believe the acronym stands for Really Simple Syndication, shows like The Walking Dead, True Detective, Fargo, Better Call Saul. Basically, if you've got an internet connection, if the show's airing Sunday, you can download and watch Monday, and without commercials.

    Sorry, I'm really off-topic I know.
     
    #10 Mendel Leisk, Mar 9, 2016
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