Quote:
Originally Posted by rmay635703
While true on the head of things, especially in your market,
in the US “legislative compliance cost” is up to 30% of vehicle cost to the consumer on “volume” models, on low volume models even higher, on very high volume models much lower.
I too work in the industry and generally if the take rate isn’t high enough to reduce regulatory costs under 30% it won’t be considered,
historically us auto makers would allow you to buy a custom car offering options that may only have a take rate in the dozens.
The consumer simply paid the shipping and overhead costs for customization.
Now days the “custom car” is all but impossible because the cost of the customization is pennies on the dollar compared to the regulatory cost, you can’t divide a 25 million dollar regulatory cost over a few thousand cars.
That is why everything is standard at OEM and only the aftermarket can offer true options.
Compare the US for example to Europe, most US volume models offer at most 2 engine/ transmission options, in Europe the same car may have 6 or more drivetrain options and that is on a much smaller market with much lower volumes, legislation first and foremost makes the decision for the automakers, if this wasn’t the case the Euro zone would not have significantly more drivetrain selection than the US, they should have less.
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This is where the benefits of globalized regulations come into play.
Europe and Asia can naturally offer more options because you can export vehicles between the markets, because of shared regulatory requirements.
Quote:
Originally Posted by jamesqf
But if you already have most of the development &c done, as with say the '80s Toyota pickup, it costs nothing to keep making them, and very little to keep making incremental improvements.
Compare with computers, for instance. Intel doesn't start with a clean sheet for every new CPU, it keeps the same basic design and improves it, so you can run 30 year old software on the latest generation.
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That's what Ford did with the US-only Focus and Ranger. Incremental improvements to outdated hardware.
And when they became too far out of sync with their global counterparts, they had to be dropped. You can only make so many incremental improvements to an old chassis. At some point, it becomes more expensive to improve it than to make an all-new one.
China is starting to get some of those. And for the same reason... cost savings.
China-only cars based on previous generation models.
But I believe the same fate will eventually befall them. They're going to die out in favor of globalized products with a wider appeal.