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Feb 16, 2009
Automakers cut options
DETROIT - WHEN American consumers start buying new cars again, they'll likely find fewer combinations of moon roofs, seat upholstery and stereo systems to choose from. As with better fuel economy, it's a case of US automakers taking a cue from their Japanese counterparts.

A buyer of the 2008 Ford Fusion could choose from the various models and extra features available and come up with 2,600 combinations. For the 2010 version due in showrooms this summer, the number drops to 104.

The Toyota Camry and the Honda Accord were the two best-selling cars in the US in 2008. The people who purchased more than 800,000 of them combined last year picked from a total of just 15 versions. For the Accord, the models or trim levels were limited to just four, each level complete with a variety of extra bells and whistles.

The American car makers need to cut costs. Sales are at a 26-year low. General Motors and Chrysler are surviving on government loans. A reduction in options not only streamlines the manufacturing process, but also cuts engineering, design and marketing costs, said Laurie Harbour-Felax, an industry consultant. Those costs often total more than the manufacturing costs.

'The industry has way too many brands, too many models, too much choice, to be efficient,' said Mike Maroone, president and chief operating officer of AutoNation, the largest automobile retailer in the country. The Japanese companies' approach 'may not serve every niche but it's a much more efficient business model.'

'The Japanese will not create complexity at really low volume to keep one customer.' said Ms Harbour-Felax. She said Honda Motor is a leader when it comes to simplicity and eliminating customer confusion. The car buyer spends less time in the dealership.

'The reason we do that is to keep manufacturing simple, but we work within that theory to make sure customers still have that choice,' said American Honda spokesman Chuck Schifsky.

The most complex choice Michelene St Amand had to make when purchasing a new 2006 Honda Accord - her third - was whether or not to get a spoiler on the vehicle.

'I didn't have to dicker about getting a model with a moon roof, but without seat heaters. It made the whole process relatively pain free. That would seem like an example Ford and the others should emulate,' said the Watertown, Massachusetts, resident.

The Detroit Three, meanwhile, continue to streamline features to keep up with Honda and Toyota Motor, Ms Harbour-Felax said.

General Motors streamlined options for many of its models over the last two years, offering three to four main trim levels for its popular Chevrolet Malibus and Cobalts.

It was common for Chrysler LLC to offer 10,000 different vehicle combinations, accounting for different variations of transmissions, safety, and interior features.

Now they are trying to get the number of combinations down to 1,000 for some of their major models, such as the Sebring.

'People don't have the money to spec out a US$50,000 (S$75,000) car anyway,' Ms Harbour-Felax said. -- AP

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