Last week Automotive News got some quotes from Ford Motor Company CEO Jim Hackett about his “decontenting” strategy, which was pitched as a way to help make vehicles more affordable. But it sounds to me like consumers are just going to end up paying more for basic options.
Here’s a key excerpt from AN author Jackie Charniga’s story:
Removing neglected features such as garage door openers or CD players is one way the automaker can trim vehicle costs and lower prices to more affordable levels, Ford CEO Jim Hackett told Automotive News.
“We’re beginning to look at things that customers don’t use at all,” Hackett said.
The tactic, which Hackett calls “reductive design,” could help the Detroit automaker control rising vehicle prices and avoid problematic loans. Removing content is an alternative to extending loan terms to riskier levels, a practice that Ford’s captive finance company has been disciplined against, Hackett said.
Oh yeah, we could all totally afford brand new cars if it weren’t for those darn CD players and garage openers adding thousands of dollars to the list price. Right, folks? Anybody?
AN also quoted senior manager of industry insights at Edmunds, Ivan Drury, on Ford’s potential cost-cutting strategy: “Are they going to pass all that cost savings to the consumer? Not likely.”
Airlines didn’t start charging for carry-on bags so your plane ticket could be cheaper. Well, they did, ostensibly. But the objective of corporations was and always will be boosting profits. And in the case of airlines, and Hackett’s decontenting idea, that could happen by charging more for things most people need as basics.
As much as I love the idea of an ultra-cheap basic-ass base model version of anything, the only potential reality I see happening here is Ford making a handful of stripped-spec vehicles to advertise a low MSRP, dealers ordering about a dozen nationwide, and most consumers finding themselves paying up for power windows and cruise control like it’s the 1980s all over again.
Except now, there are even more tech features we’re going to get suckered into plopping down for because your average consumer can’t live without smartphone connectivity and parking sensors in 2019.
Auto loans will continue to inflate, Ford’s communications manager will keep bragging about the F-150’s stratospheric average transaction prices on Twitter, and decent new vehicles will continue to get harder to afford.
Race to the bottom on Sunday, sell on Monday.