The are over 30 small cars for sale in the UK. Over 30 SUVs, Crossovers, 4x4s of various sizes. And over 30 estate cars. Just over 15 MPVs and about the same for large cars and again luxury cars.
The surprise is in the best-selling sector there are just 15 real contenders. What’s interesting is when you look closer it boils down to a choice of just 9 platforms.
- The Audi A3 and Seat Leon are on a VW platform. That’s three in one.
- The BMW 3-Series seems to stand alone until you discover where they source diesel engines.
- The Citroen C4 is part of the Peugeot Group who make the 308.
- The Ford Focus and Mazda3 are on the same platform.
- The Honda Civic seems to stand alone.
- The Hyundai i30 and Kia Cee’d are one group.
- The Nissan Qashqai is on a Megane platform and part of the Renault-Nissan Alliance.
- The Toyota Auris seems to stand alone as does the
- Vauxhall Astra until you learn where they source their diesel engines.
In fairness these cars are so good it would be silly to consider entering this market and competing with them. Only the Nissan Qashai appears different.
However, nine platforms dominating the UK’s biggest selling car sector. Many have Peugeot, Renault or Fiat engines. It begs the question, is there any real competition? Do UK consumers benefit from the savings manufacturers make with economies of scale?
If there was competition there would be differences in car prices if we took Ford Focus prices as a benchmark. Does the VW Golf diesel deliver better fuel economy and performance for the money? (no) Medium small cars are going to be about the same size with similar cargo areas by virtue of being in the same class. Is the Nissan Qashai that different? Ecology and safety features are now very similar being driven by agreements, legislation or taxes.
If cars are so similar in size, versatility, ecology, and safety and turn out to have similar fuel economy and performance then they’re just a commodity to be bought on price. Unfortunately if there are not a lot of sellers there’s not a lot of price competition.
Car manufacturers overcome competition with product differentiation. In other words they offer the same product with different trim names, different engines with different power outputs, different packs and options and say their car is different deserving a different price – not that prices are different.
They then add a raft of different offers – discounts, deposits, interest rates, payment profiles, warranties – but again similar to the competition.
It really gets mixed up when the car salesperson says you can only have this deal on this model, if you want that deal you have to buy that model – NOW.
Add a little sales patter and things get very confusing. One thing that bugs me is the way stability control systems are described to make them sound different and better when last I heard there were only two manufacturers in the whole wide world. Safety systems should be all be described in the same clear understandable way as should AWD and 4×4 systems.
Which brings me to the point much of a car is assembled from parts bought from the same manufacturers is Japan, China and Eastern Europe so they can’t be that different. Hence delivery of very French Renaults is being delayed by the recent disasters in Japan.
All this means the poor punter has to drive a really hard bargain to get any value. They need to do four deals. One on discount. One on finance. One on the part exchange price. One on the options. They have to be very careful not to be suckered in by one or two offers at the expense of the other.
For example the bits for cruise control for most popular makes can be bought for £50 from a garage parts department and a mechanic will fit them for another £50. Cruise control is over £400 on most car price lists. It works the same with fogs and alloys.
So are cars different when it comes to performance and economy?
If one car has a DVLA combined 50 mpg and another 55 mpg they warn if cars rank closely there may be no difference on the road. What does closely mean?
If a car hits 62 mph in 9.4 seconds and another in 10.1 will it really make a difference on the road? No. It’s who dares wins if you’re racing which makes the Kangoo 1.5 diesel van the highest performing car in the UK. And it depends when the next gear change is after 62 mph.
So let’s get back to competition, prices and value. A Focus entered the market at around £16000 back in Feb 2011. A Kia Cee’d is around £13000 and Astra £14000 with similar performance – big price difference. When you walk up the model ranges these differences narrow or disappear. The difference is Ford and Vauxhall will offer umpteen deals from their marketing programmes and special editions with special offers making little difference in prices.
If you want a competitive deal you have to take it out on the poor car dealers. I say ‘poor’ because they have little control. Unlike most retailers who get to pick products they think will be a hit with buyers and be winners for them, garages are dictated to by manufacturers who finance most of them.
During the four decades I sold cars there were many attempts by governments to change car distribution, pricing and promotions. They all fell by the wayside.
Your consolation is the products are good. They would be they’re virtually the same. The was a saying in the trade that if manufacturers come up with the right solutions to same problems the answers will be the same. You just get the same message in a slightly different envelope – another old trade saying when new models were launched.
The Nissan Qashqai is different – easier access, greater flexibility, a feeling of airiness and spaciousness, an elevated view of the road – but they start at over £17000. You can’t win.
Regards
Ralph