Why Do We Have Numerous Variants in Car?


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Why do we have so many variants in every Car Model?
Why not only 1 or 2 variants at the max?
Wont this strategy help in cutting the costs and overheads of the company, which will bring the prices down and benefit both the company as well as the customer.
Why not make 2 variants in which:
Variant 1: All the safety features + 2/3 Comfort and Convenience features
Variant 2: All the safety features + All Comfort and Convenience features
If i am buying a 20 lac base model of a 'D' segment car, i would at least want the Safety, Comfort and Convenience features which i get on the top-end variant of a 'C' segment car.
 

Akash1886

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Re: Why Do We Have Variants in a Car?

Why do we have so many variants in every Car Model?
Why not only 1 or 2 variants at the max?
Wont this strategy help in cutting the costs and overheads of the company, which will bring the prices down and benefit both the company as well as the customer.
If a brand is mainly dealing in the mass-market, then, the brand has to be considerate of the fact that not everyone has the budget to opt for the Top Spec, fully loaded version and neither the buyer wants a basic model which misses on the host of features i.e both in terms of safety & comfort. Every buyer has a different set of requirement and budget when buying a car or for that matter any FMCG product. Hence, the brand, makes sure that for every buyer they have a product to offer. Example: A buyer has a budget of say 30K and wants a LED TV and he/she approaches a brand for purchase so if the brand doesn't have product to offer in his/her price range then the buyer may walk away there by ruling off a sale which shall impact on the sales revenue of the brand. In a mass-market segment, the competition is high so every brand makes sure that it gets maximum number of customers/buyers which can happen only if the brand offers a product in possibly every price band. As far as the lowering of prices goes with less number of variants, the company/brand might be able to reduce their operational cost and overall investment but then the sales & revenue will also take a hit because in today's market, the customer/buyer doesn't settle for just a single product easily, they look for choices and accordingly choose the product. It is to be noted, among the buyers & sellers, the buyer has an upper hand. The comfort level of the buyer hold utmost importance.

Why not make 2 variants in which:
Variant 1: All the safety features + 2/3 Comfort and Convenience features
Variant 2: All the safety features + All Comfort and Convenience features
As I mentioned above buddy, every buyer has a different set of requirement, budget and needs during the purchase process hence, the buyer will choose the product which suits his/her need. If one brand has a product suiting the needs well and good but if the brand doesn't have one then buyer has all the time to look for other available brands that offer products matching to their requirements. In India, the mass-market segment of cars is quite customer centered because brands look to capture the buyer base. There are buyers who'll opt for base model (without safety & less comfort), there will be buyers who'll opt for a mid model (with optional or mediocre safety and comfort) and there will be buyers who'll go for fully loaded model. So, the brand has to make this product line up in such a way that there is something for everyone.

Another important aspect here is the sales target. In mass-market segment, the minimum sales target for a month for one person can be minimum 100-120 cars so if there are just 2 variants then the sales guys will have a tough time selling them because they won't have anything to offer the buyer base that looks for the middle spec models. And as you may have observed, the middle spec sells the most followed by the top spec in 2nd place.

If i am buying a 20 lac base model of a 'D' segment car, i would at least want the Safety, Comfort and Convenience features which i get on the top-end variant of a 'C' segment car.
C&D segments are luxury segments which isn't in the reach of majority of car buyers because today the pricing in these segments specially of top spec and one below top spec model has kind of gone beyond the purchase limits of majority. Look at the pricing of Top Spec Honda CITY Top Model for example. At one stage, the Honda CITY was well within buyer's reach but now it has gone much higher. In C-Segment as well, the need of multiple variants is there because there are people who'll like to own a big sedan and choose a variant that suits their pocket and needs.

Coming to D Segment, this is where the niche buyers come in picture. The sales target of D-Segment cars is like 50-60 cars in a month. Not every brand in India looks to cater in D-Segment because the sales / revenue generation is more in mass-market segments. So, as D segment has defined buyer base so they can maintain 2 variants in their model line up because their dealers do not have to hard sell to every walk-in in the showroom. Therefore, the brands catering to D-Segment buyers in a market will keep the line up short and simple.

However, with the changing economic stature of the working class and easy availability of financial resources possibly there will be a rise in buying of D-Segment cars too which may make the brands of this segment re-think on their strategy w.r.t the model line up and sales.

Regards

Akash
 
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Re: Why Do We Have Variants in a Car?

Purely an economics question!
E.g., I am a car-maker in price sensitive market. To grab the bigger pie, I have to deliver what people want and not the other way round.
I am a car-buyer in India, one of the most price-sensitive market. I donot want Rear Defogger, Front/Rear Fog lights, Power Windows and Central Locking but require ABS, Stereo, AC, Power Steering. My friend want a bigger car with no frills (read the base variant). Another friend wants a fully loaded smaller car (read top variant).

This is why manufacturers are providing us with so many variants. Pure business thing buddy! [:)]
 
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Re: Why Do We Have Variants in a Car?

Skoda Kodiaq is an example,
only 1 fully loaded variants, and still the sales number are good for that price range.

I am sure a break-up of sales variants-wise will show the base variant sales figures to be lower in all cases.Then why to waste the money on it? Why not pass on the benefit of money saved on to the Customers.

A base model is purely a marketing trick to show the model is available cheap. A Base model which is just 4 wheels with an engine.

My personal opinion is that all Premium Cars (Hatch,B,C,D,SUV,Compact-SUV) should have 2 variants where the product remains Dignified and Prestigious, the Grace and Glory remains intact[:)]
 
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Re: Why Do We Have Variants in a Car?

Skoda Kodiaq is an example,
only 1 fully loaded variants, and still the sales number are good for that price range.

I am sure a break-up of sales variants-wise will show the base variant sales figures to be lower in all cases.Then why to waste the money on it? Why not pass on the benefit of money saved on to the Customers.

A base model is purely a marketing trick to show the model is available cheap. A Base model which is just 4 wheels with an engine.

My personal opinion is that all Premium Cars (Hatch,B,C,D,SUV,Compact-SUV) should have 2 variants where the product remains Dignified and Prestigious, the Grace and Glory remains intact[:)]
It's true that the base model is used for bait and switch strategy but they still sell, even if the sales are not spectacular. Apart from the need to cover all reasonable price points, the primary reason for so many variants is the ease of manufacturing. Today’s car models are modular and the manufacturing line is flexible, so the manufacturer can produce different variants with very little marginal costs. Hot swapping models on running assembly lines is easier and robotics ensures mundane tasks are faster ,accurate and cost efficient. Having lower number of variants will ensure the customer moves on to other brands offering a better product-price mix. Why lose a potential customer when the cost of production of the variant isn't significant ? The scenario will be different if all manufacturers offer only 2 variants.
 
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Re: Why Do We Have Variants in a Car?

Though slightly deviating the topic,better thought will be ,in D segment and segments above ,1/2 variants will do ,just what Mr.Silvereyes had pointed.
In cost cutting terms some manufacturers-(pointing Hyundai Verna)-Its Automatic Full Option lacks many things that its Manual Full option offers-one feature was Start stop button.
See,being a swift full option owner ,if I plan to buy a full option Verna,this itself will disappoint me,as when a 7L car offers this feature ,why not 15L one.[surprise]
 
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Re: Why Do We Have Variants in a Car?

Though slightly deviating the topic,better thought will be ,in D segment and segments above ,1/2 variants will do ,just what Mr.Silvereyes had pointed.
Thats why i have mentioned PREMIUM CARS
A premium Hatch like Baleno for example, makes a brand value Esteemed and Valued if only top 2 variants are available.

In cost cutting terms some manufacturers-(pointing Hyundai Verna)-Its Automatic Full Option lacks many things that its Manual Full option offers-one feature was Start stop button.
See,being a swift full option owner ,if I plan to buy a full option Verna,this itself will disappoint me,as when a 7L car offers this feature ,why not 15L one.[surprise]
Exactly What i mean to say Vishnu,
When a 7lac car has it then why not the top end of higher segment car!!
 
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Re: Why Do We Have Variants in a Car?

Surprisingly some useful features aren't available in top end model that base model has .Eg Ertiga automatic is vxi not available in zxi variants
 
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Re: Why Do We Have Variants in a Car?

Why do we have so many variants in every Car Model?
Why not only 1 or 2 variants at the max?
Wont this strategy help in cutting the costs and overheads of the company, which will bring the prices down and benefit both the company as well as the customer.
Why not make 2 variants in which:
Variant 1: All the safety features + 2/3 Comfort and Convenience features
Variant 2: All the safety features + All Comfort and Convenience features
If i am buying a 20 lac base model of a 'D' segment car, i would at least want the Safety, Comfort and Convenience features which i get on the top-end variant of a 'C' segment car.
Very interesting topic Animesh, there was a time till the 80's when we had just the humble AMBY & Fiat with one variant, you either buy it or lump it.

Then came the mighty M800 and changed how India drove, a tiniwiny 800cc horizontal engine driving the front wheels, it had many first's, factory fitted A/c DX model, front disk brakes to name a few.

Now, even the base variant has most creature comforts and safety features, so manufacturer's use this trick of offering many features to hold on to the customer.

Regards.

Vinod
 
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Re: Why Do We Have Variants in a Car?

To answer in simple words, THAT'S THE MARKET NEED


Your strategy will work for the Premium segment, BUT Premium is "Premium", not something that is named "Premium"
I dont think that its because of the Market need, but its because the Market is offered base models.
I do agree that PREMIUM is not defined by labelling Premium, if you are referring to my example of Baleno.
 

Akash1886

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Re: Why Do We Have Variants in a Car?

To answer in simple words, THAT'S THE MARKET NEED


Your strategy will work for the Premium segment, BUT Premium is "Premium", not something that is named "Premium"
Totally Agreed.

I dont think that its because of the Market need, but its because the Market is offered base models.
I do agree to Satish's view. If it wasn't the need of the market, then, in first place the brand would not have thought about introducing a base model. The Market's need is defined by the target audience and the segment the brand is catering to.

A car's top spec with all bells and whistles can't be referred as premium if we actually go by true sense of the word. A premium brand / model is one that caters to a niche buyer base in my view. But, when it comes to mass market, a top spec variant is often called premium simply because the variant is priced at premium for it's features. I would say Mercedes Benz / Rolls Royce and the likes are the ones who indeed are Premium.

The word Premium indicates different meanings when referred to a mass-market brand and when referred to a ultra-luxury brand and i.e because the thought process of their target audience is different too in majority of cases.

Regards

Akash
 
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Re: Why Do We Have Variants in a Car?

I dont think that its because of the Market need, but its because the Market is offered base models.
I hope Akash made it clear. Business is always to cater the market need and that's what every manufacturer does here.

In case of niche segment, brochure has a single variant and the customer could customize the car straight from the factory with multiple options and features. Few decades back this was the case with most of the cars, when it used to be "pleasure car". Even few accessories / customization were done at dealer end. Gone are those days when sales figures used to be in 4 digits annually.

Those days every car is considered to be premium and there were only a handful of people who could afford cars. Today the scenario is poles apart. Cars became more affordable and with the variety of customers and needs it is mere impossible to satisfy the mass market with a couple of variants.
 
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