There Is Such A Thing As Too Much Choice

Have you gone out and shopped for new vehicle recently? Are you overwhelmed by the variety of vehicles on offer? For example, if you decide to get a Porsche 911, you have the choice of 22 models. No, that isn't a misprint. Meanwhile other automakers have an array of models that carve out new niches and and mix existing body styles. Consider this, Audi sells 50 different variants around the world, a five-fold increase from the 90's when the German luxury automaker only sold 10 different variants. There has to be a point where automakers reach the point of too much and begin cutting back on their lineups, right?

PwC, a consulting firm tells Bloomberg that by 2018, some automakers will begin to level off their lineups. The reason for automakers leveling off their is increased costs in development and production, and better differentiate their offerings to consumers.

How bad is a large lineup for automakers? Detlef Kuhlmey, sales manager at Autohaus Kramm in Berlin tells Bloomberg that not many consumers get to see the full lineup because of how many choices there are.

“Carmakers look for something special to present,” Kuhlmey said. “To most customers it doesn’t really matter.”

Also trying to explain the small differences between the models adds a level confusion for dealers.

A case of automaker shrinking their lineup is PSA Peugeot Citroen. Europe's second-largest automaker is planning to cut back their global lineup from 45 to 26 vehicles by 2024 in a effort to return to profitability.

Others are going the opposite way. Mercedes-Benz is planning to add 11 new models by 2020.

“All these options reduce the likelihood that people will choose any, and reduce satisfaction when people do choose,” Lots of choices are helpful when people know what they’re looking for, but “in general, people don’t know exactly what they want,” said Barry Schwartz, the Swarthmore College social theory professor who wrote “The Paradox of Choice.”

Source: Bloomberg

William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.