Why Americans reject build-to-order cars

[jpd80]

 

June 6, 2016 @ 12:01 am Larry P. Vellequette

 

 

In 2015, less than 5 percent of new vehicles sold in the U.S. were built to customer order,

according to the National Automobile Dealers Association. In Europe, the number was

about 50 percent.

 

For U.S. dealers, that means thousands of dollars in extra floorplan expenses.

For automakers, it means huge advertising and incentive costs for each unsold

vehicle sitting in inventory, waiting for a buyer.

 

"Selling almost entirely from stock in the U.S. generates both higher stocking costs

and more lost revenues," said Ben Waller, associate director of ICDP, an automotive

distribution research group in the United Kingdom.

 

Waller estimates that 11 to 12 percent of the sticker price of a vehicle sold in the U.S.

is needed to cover the cost of stocking and selling the vehicle. And he says the cost

of selling it includes discounts to attract a customer who isn't getting exactly what he

wants and revenue lost when a customer won't settle for a different spec

 

 

More at Autonews,com...........

 

So having those huge inventories and offering buyers a long list possible option combinations

is hurting manufacturers' profitability. I guess that has to be balanced against maximizing sales.

 

I have to wonder when the F150 ordering guide is over 120 pages whether Ford should be

offering their product in a more simplified form built along popular combinations and just

drop a lot of the variations and see if controlling order options really affects sales that much

 

[theoldwizard]

Every new car I have ever bought was "built to spec".

[akirby]

Or maybe having so many vehicles in stock means you don't have to special order to get what you want.

 

I'm fairly picky about what I want and have ordered several vehicles. But the last 5 vehicles we've bought were all in stock because we were able to find what we wanted with the right options and colors.

 

Also - Americans are impatient and don't like to wait 6-12 weeks.

[silvrsvt]

Every new car I have ever bought was "built to spec".

 

Same here....I wonder if most Americans even know they can order a car made to their specs, since most dealerships would rather steer them to something on the lot for a quick sale

[akirby]

 

Same here....I wonder if most Americans even know they can order a car made to their specs, since most dealerships would rather steer them to something on the lot for a quick sale

 

Some don't know but I suspect most people just aren't that specific about the options they want (or even know what is available).

 

I see post after post where someone bought something off the lot only to find out it's missing a feature they wanted and now they want to add it aftermarket and find that it's either impossible or very expensive.

 

E.g. - roof side rails on the MKX/Edge. I think it's a $200 factory option (or less), but to buy them afterwards they're $1000 plus installation which requires removing the headliner.

 

Or Navigation. "We bought this one off the lot and it didn't have Nav but now we'd like to add it." Sorry. If you wanted Nav or a bigger engine why not just buy it that way in the beginning?

 

Too many impulse/uneducated buyers I guess.

[SoonerLS]

Too many impulse/uneducated buyers I guess.

That's part of it, but I'd bet that some don't realize that they want a feature until they've been in the vehicle for awhile.

 

Also, you can usually cut a better deal on a car that's already in stock. When you have incentives that require that you take delivery by June 30, it doesn't help that you may not take delivery of an ordered vehicle until mid-July.

 

My parents ordered a Bronco in '84 so my dad could get the options he wanted. The last two new vehicles I've bought were ordered to my specifications--the difference was that the vehicles with the options I wanted were already sitting on a dealer's lot (one was on another dealer's lot; one was on another of my dealer's lots).

[Hugh]

I just for fun B&P a 2017 Escape and afterward I did a search inventory. The ones I'm looking for are available in the local area. That could be another possibility. I also agree with the unit push at the dealer. I bought my Escape off the lot but the salesman was pushing another unit. It got to the point where I pulled up the window sticker PDF on my smartphone and directed him to the unit on the lot which was I was looking at in the first place where he found me. After the dust settled, the deal went off pretty much without a hitch.

Edited June 6, 2016 by Hugh

[transitman]

Since I've been paying close attention to the dealership I'm working with inventory of 2017's, they stock either basic standard feature models, or fully equipped high end models. Their inventory for Fusions are either SE, 2.5L, 200A or loaded Titaniums, nothing in the middle. I guess they figure walk-ins want either basic transportation or loaded luxury and nothing in between.

[akirby]

The last two new vehicles I've bought were ordered to my specifications--the difference was that the vehicles with the options I wanted were already sitting on a dealer's lot (one was on another dealer's lot; one was on another of my dealer's lots).

 

My last 3 vehicles:

 

Ordered the 2000 LS

Ordered the 2006 Fusion

Found the 2013 Fusion in stock at another dealer - my dealer traded for it

 

My wife's last 4 vehicles:

 

2003 Aviator - in stock - left over model with huge incentives

2008 Edge - found in stock at another dealer - traded for it

2014 Escape - in stock

2016 MkX (gave daughter Escape to replace her older Focus) - in stock (unloaded it off the truck 12 hours after we were at the dealership)

[mercurymichael]

I have found that dealers frown on ordering. They always push for what is on their lot or they want to search inventory and find it for you as opposed to taking the time to order.

 

There are also limited options as compared to the past. Colors, especially interior, are extremely limited. Options are lumped into packages, forcing you to buy things you may not ever consider or want. For example you cannot just order heated seats, you have to a buy a trim level and then an option package which often times includes things that are in no way related to the option you are after. If manufacturers offered options singularly, I think you would see a vastly different end result on what people would buy.

[fuzzymoomoo]

We were ready to order our 2015 Focus since no dealer nearby had one with everything we wanted, until our dealer found one in Cincinatti that had everything we wanted but was the wrong color. We decided to let the dealer do a swap and got a black one instead of magnetic grey.

[hermans]

I recently bought an Edge. I could not find what I wanted on the area dealer lots. A dealer found one (in 10 minutes) that was 37 miles away. We were lucky as it had exactly the options we wanted and it was our first color choice. The other dealer that looked for one or us told us there weren't any available for 150+ miles. All dealers are not equal.

[fordmantpw]

We typically order to get exactly what we want as we tend to keep our vehicles for a long time. My last two trucks, though, have not been ordered. My '05 was bought off the lot due to the crazy deals at the time (33% off MSRP), and the '08 I have now was bought used. I think the wait actually adds to the excitement and the enjoyment of driving that new vehicle off the lot.

[aneekr]

Too many impulse/uneducated buyers I guess.

 

Too many new vehicle buyers, too. Customers who are averse to doing a sold order on a new vehicle should consider pre-owned vehicles instead.

[30 OTT 6]

What's in it for the dealer? If:

• they order the vehicle is the profit the same as selling directly off their lot?
• they have to bring a vehicle in from another dealer do they have to share a cut of the profit with the other dealer and is the shipping expense covered by the selling dealer or both?

[bzcat]

We live in a country where land is basically free so it makes sense for vehicle distributors (and every other kinds of distributors) to build vast holding lots (or warehouses) to store inventory. This is not going to change no matter how much we belittle the average consumer. The issue is not the consumer. It is the supply chain... car makers will shift the inventory burden to the distributor as long as land cost is basically zero or near zero.

 

If you ever wonder why there are no car dealers left in Manhattan, this is why... it's impossible to store that many cars and still have a viable business.

 

In most European cities, people have to order their car because distributors can't physically inventory that many cars. They have to custom order their cars because that's the only way to get one, not because they prefer it.

[Biker16]

Every car I have ever owned was made to order.

[akirby]

 

What's in it for the dealer? If:

• they order the vehicle is the profit the same as selling directly off their lot?
• they have to bring a vehicle in from another dealer do they have to share a cut of the profit with the other dealer and is the shipping expense covered by the selling dealer or both?

 

 

The only difference is that they don't have to floor plan a special order so an order may cost them a bit less in interest than one that's on the lot.

 

I've had dealers tell me they'll special order something on X plan but not sell one off the lot (usually on limited supplies).

 

I've heard my salesman talking about swapping vehicles with another dealer and it sounded like there was some negotiation on the holdback but I'm not sure exactly how that works.

[BORG]

I generally try to avoid ordering because they've always been troublesome, but it's virtually impossible to get exactly what you want from Lincoln unless you order because their inventory and dealership network is small, especially within the fist 12 months of a new car launch. With a Ford dealership, the inventory selection across the dealer network is pretty good so you can get what you want most of the time.

Edited June 6, 2016 by BORG

[fuzzymoomoo]

I generally try to avoid ordering because they've always been troublesome, but it's virtually impossible to get exactly what you want from Lincoln unless you order because their inventory and dealership network is small, especially within the fist 12 months of a new car launch. With a Ford dealership, the inventory selection across the dealer network is pretty good so you can get what you want most of the time.

And you know what? That's a fair criticism. You aren't the only one I've heard that has that opinion either. I think the models that Lincoln dealers choose to stock leaves a lot to be desired. They can do better to make sure they have a better chance of finding what they want without ordering.

[BORG]

And you know what? That's a fair criticism. You aren't the only one I've heard that has that opinion either. I think the models that Lincoln dealers choose to stock leaves a lot to be desired. They can do better to make sure they have a better chance of finding what they want without ordering.

 

 

I know car ordering is still rare, even at Lincoln according to my sales rep. Most people come in and just buy what they can find and are fine with that. However, Lincoln sells and stocks a fraction of the models it use to so the selection is always tight which is why I began ordering.

[akirby]

Don't you think the local dealer knows what their buyers want and that's what they're ordering? If they continued to stock vehicles nobody wants they wouldn't be in business long.

 

I think it's more likely that they just don't stock what a specific person wants rather than not stocking what the majority of buyers want.

 

e.g. We were looking at Too Good to be Blue (Allure Blue for Lincoln). In the Atlanta area (90 mile radius) there were only 2 TGTBB Edges and 1 or 2 MKXs. But I don't blame the dealer because I'm sure that's not a big seller.

[transitman]

I generally try to avoid ordering because they've always been troublesome, but it's virtually impossible to get exactly what you want from Lincoln unless you order because their inventory and dealership network is small, especially within the fist 12 months of a new car launch. With a Ford dealership, the inventory selection across the dealer network is pretty good so you can get what you want most of the time.

My case is a perfect example. My 2017 Fusion order went in to the order bank on 3/8 and I didn't find out until the last week of April that it was submitted as a dealer order and wasn't even scheduled. I made a stink, it was resubmitted and now is scheduled for the week of 6/20. People who ordered their cars in early April are getting there's. If I ever order a new car again, I'm getting it in writing and will never rely on the word of a sales associate. Mine either doesn't give a shit, or is incompetent. It's not the customer is always right, it's there's always another customer, right.

[630land]

Why don't people order?

 

Most people want the car/ute "loaded" and just want to pick the color. Then fight over price, payments, interest rates, add ons, etc.

Sure, enthusiasts/purists/car guys/ will want to special order a manual trans sedan in burnt orange. But average buyer wants an SUV with AWD, sunroof, info-tainment, etc. Just pick black/white/gray or red/blue.

 

They don't care about manual trans, axle ratios, tissue dispensers, and unusual colors like the 60's. We read stories of some Boomer in 1969, who ordered his GTO with "this, that, and other thing", but now he will get "just a loaded truck".

 

And some that do special order end up waiting 6 months, complaining online saying "where's my car!?". If somehow someone were to "mandate" special ordering, as suggested above, there'd be revolt from dealers and customers. Can't "force" European lifestyles.

Edited June 6, 2016 by 630land

[BORG]

You also have to remember that many incentives are tied to dealership stock, not new car orders, although I believe this is less true for Ford or Lincoln. I know dealers generally discourage new car orders because they want to make a sale from stock today.

Edited June 6, 2016 by BORG