Consumerism has devoured the world since industrialization, and the automobile industry is not exempted. As an industry featuring standardization and individualization simultaneously, the goal is rather simple — attracting as many customers as possible and selling to them at the lowest possible cost. Production, operation, and marketing work together to maximize profit and eventually lead to consumerism within the industry. Nowadays, people rarely buy a car purely for self-mobility. Consumers want more, and manufacturers are offering even more.
Cars are not just about transportation now as consumers want more than needed. Cars are now a symbol of social status and personal taste. For example, the owner of a red BMW M4 may be considered rich, stylish, and athletic, sometimes risky and bothering. On the other hand, the owner of a normal black Mercedes-Benz E220d with an entry-level package may be considered a businessman of success who is elegant yet conservative. The joy is not derived from driving and riding but from the possession of the car itself and related accessories. One is happy not because he or she drifts a BMW every day, but because he or she has a BMW parking in the garage.
The desire for a symbol lead to the booming of entry-level FF models among luxury brands since those premium brands know that people would pay for the marque even if the underpinning structure does not differ much from cheap budget cars. Volkswagen AG provides a wide variety of FF vehicles using the same MQB structure. A Škoda Fabia may be well enough for daily use, but one may pay more for an Audi A1 due to its fancier look and more subtle interior touch. The price difference between the two is not for the mobile capability, but for comfort and feel.
Manufacturers make a step further by offering an incredible range of options, and they always try to trick customers into paying more. They do succeed as choosing options is now an important process of buying a car. You can see people citing option names like “23P” (M-Benz’s driving assistance), “5AT” (BMW’s driving assistance), and “4D chassis control” (Porsche’s handling optimizing system) when discussing cars without really knowing the detail. The expansion of individual departments is another move for the same purpose. Traditionally considered a boutique service to special customers, manufacturers now hope to bring about more revenues by generalizing it.
Blank buttons are the foxiest method to stimulate one’s vanity. If one does not go for all options, the blank will stay forever to mark the left-out capabilities. Porsche, who is notorious for charging every additional piece, is the master of blank buttons. Would you pay the same amount for a fully equipped Cayenne or an absolutely empty Cayenne S?
Another example is Mercedes-Benz’s Burmester audio system option. Models without the expensive Burmester stereos only get black stereo covers, while the ones with Burmester get fancy silver metallic covers with a spinning effect. The Burmester option is quite expensive, and one usually does not spend a long time listening in the car. However, with the design differentiation, people might take out more cash just to make the interior more complete.
In addition, the reason that Apple Carplay does not allow third-party apps is to force customers to spend more on the infotainment system if they want more functions. Other unnecessary options include large wheels, aerodynamic kits, and limited edition packages that often occur. These are things that only fulfill one’s eyes and mind and help barely anything in daily driving. However, minds and eyes often dominate the decision process of buying a car.
Does consumerism end with the delivery to the customer? Certainly not. Tuners and third-party suppliers are waiting outside the dealerships with even more tricks. One can easily swap every part of his/her car at a price that exceeds the original price tag. Some exotic wheels? Roaring exhaust sounds? Stylized body kits? Additional film on the body? Or even a power upgrade? Absolutely no problem. Some tuners are so successful that they are either authorized by the original manufacturer or directly merged into the brand. Those are stories of Alpina with BMW and AMG with Mercedes.
If a car can last for a long time, all these investments are somehow acceptable. However, some exogenous factors are forcing people to buy more often than before: emission regulation, safety regulation, and decreasing reliability. Emission reduction is now a keen issue in many nations, and some even apply the laws retrospectively to old cars. Unless the owners come up with new devices to reduce the emission, the old cars cannot go on the road.
For new cars, regulation constantly requires cars to emit less and be safer than before. To meet the ever stricter requirements, carmakers are putting plenty of unthinkable gadgets into cars, such as 48V motors, electronic safety systems, turbochargers, diesel particulate filters (DPF), diesel exhaust fluid (DEF, or AdBlue), and exhaust gas recirculation (EGR). These complex components increase the difficulty of maintenance and eventually lead to decreasing reliability. One has no choice but to buy a new car in case of that.
Consumerism does not only happen in the end consumers but also the middle consumers —all layers of suppliers in the supply chain. As a result of the economy of scale, firms focus on their own advantages and outsource the parts in which they have no comparative advantages. What should a firm do if it finds producing a component in-house too expensive? The answer is: just buy it from another supplier that offers it at a better price. In reality, almost everything is purchasable on the market, from a single gear set to the whole car. We now see gearbox makers purchase gears from upper suppliers and then sold the finished gearboxes to the manufacturers.
Outsourcing is especially common in developing brands. The Korean Hyundai Group is the best example. In order to catch on with other prestigious brands in terms of quality, Hyundai buys nearly everything from notable suppliers. Hyundai once purchased engines and gearboxes from Mitsubishi and obtained the common rail diesel engines from VM Motori in the early 2000s (VM Motori was then owned by Detroit Diesel and Detroit Deisel was then owned by Daimler Truck). Recently, Hyundai hired previous Audi and BMW engineers and opened an R&D center in Germany in order to produce “German-style” cars.
Another example is the Taiwanese brand Luxgen. Without major techniques in core power components, Luxgen purchased almost everything from external suppliers. Its first chassis is from Matra, the gearboxes are from Aisin, the engines are tuned by Delphi, and the suspension is adjusted by Magna and Prodrive. Furthermore, Luxgen hired Kazutoshi Mizuno, the father of Nissan GTR, to lead the R&D team, hoping to roll out better products. Under Kazutoshi’s leadership, new Luxgen models get Mitsubishi turbochargers, Denso’s injector, and Bilstein’s damper.
While outsourcing does not necessarily improve or worsen the quality, it changes the way how firms develop vehicles. Of course, one can still choose to work every part out in-house, but that is not cost-efficient anymore. This somehow makes car manufacturers lazy in self-developing. Need a good gearbox? 4WD system? Convertible roof? Common rail injection system? Or even a brand new sports car (Yes, I am talking about Toyota Supra.)? Just buy it. Procuring something of high quality at a price lower than that of self-development can never be wrong.
Always remember that the ultimate goal of a company is to make profits, not good cars. This is why BMW is making FF cars, why Porsche is making SUVs, and why Mercedes is co-developing with Renault-Nissan. They do not care whether they hurt the feelings of their loyal fans. They just want more people to spend money in their dealerships and fewer accounts payable to the suppliers. Since the pursuit of earnings will never stop, consumerism is here to stay.
Thank human greed.
