By on November 21, 2010

The U.S. auto industry went to the brink. It was rescued by massive amounts of taxpayer money. Brands, factories and dealers shuttered. The business went through traumatic changes. But one thing has not changed: The antiquated way of selling cars. No, I’m not talking about selling cars via the Internet or Costco. I’m talking about build-to-order. A.k.a. “mass customization.” It’s not a pipe dream. It’s done every day. Just not in America.

The story about the supposedly short in supply cars reminded me: Most, if not all  European brands already build-to-order. You buy your car like a Dell computer. You go to your dealer. You pick a car, maybe test-drive it. Then you sit down with your sales guy and build your car a la carte. Color, engine, trim level, extras. You have the choice of a dizzying (and often overwhelming) array of choices. The salesguy has a dizzying arsenal of ways to up-sell you. The result is a car that is as individualistic as you are. Volkswagen has done it as long as I can remember – and that’s long. We once figured at Volkswagen that on the average, 1.5 identical VWs are on Germany’s streets. And that was a few years back.

If the dizzying array of choices is not dizzying enough, then many carmakers have in-house shops that fulfill any wish. Volkswagen Individual GmbH will probably give you a Golf in leopard skin, if it’s deemed ecologically responsible.

Once the order is placed, it goes to the factory, and the car is made for you. Takes a few weeks. When I left Volkswagen the bulk of the cars sold in Europe were built-to-order. Instead of cars being built willy-nilly and dumped on dealers’ lots, only the cars people want get built. In Germany, more than 30 percent of the buyers actually make a trip to Wolfsburg and pick up their own car themselves. In the Autostadt, a Disneyworld for carbuyers. Not with a schlocky Disneyworld Hotel. With a Ritz Carlton.

The upshot for the dealer is that they don’t need a huge inventory of cars. One of each suffices. And the more esoteric ones can be sold out of the catalog, or via fancy multimedia setups (that never really work.) If you insist on an oddball car, the dealer doesn’t have to call around and try to locate it. He just writes the order for the oddball car, and it will show up. What about instant gratification? If you want to drive away immediately, the dealer has a limited stock. It is understood that you need to take what’s there, and it’s only the most common configurations that usually work as build-to-order showpieces.  If you want your wishes fulfilled, you go the build-to-order route. If you are in a hurry to get wheels. the dealer will give you a rental at a very reasonable price for while you wait.

One of the reasons why imports don’t make huge inroads in Europe is that they can’t do the build-to-order for imported cars. Your choices are limited to what rolls off the boat.

The U.S. auto industry went through so many gutwrenching changes, why not change to the build-to-order model while we are at it? It’s not that Ford and GM don’t know how. Their cars in Europe use the same system. (Hit the “Konfigurator” button). Want a “bespoke Fiesta?” Build it here.

Build-to-order would also be a better weapon against the imports than witch hunts. Customers love choices. The imports couldn’t keep up with it – unless they build in America. And in America, foreigners are already making the first steps. BMW is pushing the build-to-order model for the X3. Books have been written about the topic. Even China is going to build-to-order.

Want Americans to buy American? Build-to-order is the key.  Yeah, sure, it’s never gonna work here. Add it to the rest of the stuff that ain’t working.

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121 Comments on “How To Get Those Cars Off The Lot Quick: An Immodest Proposal...”


  • avatar
    LeeK

    Absolutely!  Have the dealer have a two or three representative samples of each vehicle: a stripper, a mid-level, and an all-the-bells-and-whistles version.  That way potential buyers can see what the features and trim levels look like in person.  Give meaningful test drives.  Let the buyer determine exactly what they want, in the combination that they want, with no-haggle pricing.  No more high pressure sales (“you’d better get this today, but I had someone in here right before you that is going to buy it if you don’t”).  Take some of the fear and sleaze out of the new car buying process.  There will be plenty left in the used car business, but at least it’s a start.

    • 0 avatar
      forraymond

      Sounds exactly like the Saturn Dealerships I bought through.  Go in, find a salesperson, take a test drive, go back to dealer, fill out a form, wait a month, get the vehicle that you want. – SIMPLE! NO PRESSURE! FAIR PRICE! NO GAMES!

    • 0 avatar
      thehomelessguy

      go even further than that. Have it be like a furniture store with fabric samples, or even whole seats with different color combinations.

    • 0 avatar

      This model already works well with Mini, even though it takes almost 8 weeks for the car to show up.  My most recent car purchase was a Mini Cooper S.  I went into the dealer with the expectation that I would order the car custom (because that’s just how Mini’s are).  I drove a car representative of what I was getting (another S).  The sales person then asked what I wanted to do.  I said I decided I wanted to get a Mini (already made up my mind a long time before…).  She pulled out an order sheet and a computer and said: “what do you want to get?”.  I put in my order, got OK’d for financing, and the car arrived 8 weeks later.
      To be honest, I’ve purchased a lot of cars “off the lot”, and nothing beats going down to the dealer to drive the car you custom ordered right off the showroom floor.  I wouldn’t do it any other way.
      One of the other benefits of doing this, is it appeals to my age group (younger).  We expect everything to be custom, from our computer to iPhone; it’s hard to drum up enthusiasm for buying the generic colored, generic optioned model because the dealer didn’t have anything else; especially since enthusiasm for cars in general is lower than it’s ever been among the 18-30 age group.
      If American brands want to compete, they MUST follow the build-to-order model.

    • 0 avatar
      Wacko

      The only Problem I see With the Built to Order in North America, Is All the packages that have to be chosen.  On most Cars, you have to choose a certain pakage to be able to add a certain item.  For example, to get a better stereo, I would have to take the performance package then I can Add the Stereo system.  That’s not build to order, Let me pick and choose what I want.  Let us choose the options we want, without having to take crap we don’t.  Make It a real Built to order, and you will be saved!!

  • avatar
    Gardiner Westbound

    “Customers love choices. ”
     
    Spent a lot of years in marketing. Too many choices can be paralyzing. The bewildered customer often chooses nothing.

  • avatar
    tced2

    I have ordered 3 cars.  The first was a 1970 Camaro – it took about two months to arrive (a decent car in the end).  The second was a 1974 Camaro – it took about six weeks to arrive (an Ok car).  The third car was a 1982 Cavalier – it took about five months to arrive (and very quickly became a lemon car).

    The rest of the dozen cars I have owned were picked out of dealer inventory.

    The idea of taking a trip sounds nice.  But the distances in US are much greater and hence the costs would be higher.  Imagine buying a Hyundai in northern California and flying to Alabama to pick it up?

    • 0 avatar

      Nobody forces you to go to Wolfsburg. They will deliver it to your dealer, and a good dealer will deliver it to your doorstep. Going to Wolfsburg is your own choice. I was amazed by the huge numbers who do it.
      As for the bewilderment: True. In the 80s, there were many bewildered customers, bewildered dealers, and a bewildered computer system. That’s behind us. Everything running smoothly.
      The current long wait times are not due to the system. It’s just too much demand, especially from China. They need to wait up to half a year for a Q5. And they order it nonetheless.

    • 0 avatar
      forraymond

      I can’t imagine anyone going to Alabama by choice.

    • 0 avatar
      stuki

      Geographical size is one thing. Another is market size. In a small market, total lot inventory will be low, hence on average increasing the distance between what a given customer wants, and the closest match the dealer can get hold of on either his, or another dealer’s, lot. Because of this, in a smaller market, BTO adds more value for the average customer. It could well be that once a uniform car market reaches US size, the passed along efficiencies of building for lots, outweigh the perceived benefits of individually optioning down to the slightest detail. Honda certainly seems to think so, as their lineup is the exact antithesis of BTO.
       
      Also at issue is repair facilities and reliability. No car makers can test gazillion option combinations as exhaustively as they can fewer ones. Particularly some Japanese brands have in the US built such valuable brand equity around reliability uber alles, that they may be loathe to do anything that risk upsetting their position. Just look at their foot dragging with bringing DI engines to market.
       
      And then there is financing / leasing. The expected residuals on leopard skin VWs are really hard to pin down with any degree of certainty; something which will be reflected in the lease offers that are such an important concern for selling cars in the US.

    • 0 avatar
      PeregrineFalcon

      “Just take you bigoted comments to a KKK or Daily Kos site, wherever you feel most at home.”

      He said he didn’t want to go to Alabama, so he’s probably not a fan of the KKK either.

    • 0 avatar
      joeaverage

      So Bertel – can Americans still go to Wolfburg and pick up their new VW too? I once had a VW Rabbit convertible that the first owner purchased, picked up at the factory, used around Europe for a week or two and then was shipped home to CA. I was led to believe that the shipping was paid for by the factory (included in the purchase price).

      So does this still happen? We’re looking at a VW Jetta Sportwagon TDI with six speed manual and I’d love to pick up a VW at the Wolfburg factory. Especially if it was a German built VW instead of the “Hencho in Mexico” car that we looked at.

    • 0 avatar
      wallstreet

      @ joeaverage,

      I will answer that for Heer Schmitt since he is either sleeping due to the time zones or looking angry. You can no longer do European delivery on VW, however, they do allow you to do that for Audi & Porsche. It has to be a US spec vehicle.

  • avatar
    Bytor

    More choice equals more expensive. Price any BTO Euro car against the equivalent American lot car. The American Lot car is much less expensive.

    Part of it is that most things are more expensive in Europe, but part of it is that it cost more money to have seven engine options, than two. (multiply by all the systems on the car) It costs in a more customized build process instead of assembly line build process, it costs in inventory and parts cataloging.  It costs more in engineering and smog testing a dozen drivetrain configurations instead of two.

    Maybe you can do this for Cadillac, but you are not going to BTO a Cruze and expect to be price competitive.
     
     I would rather shop the various $18K compact cars for the one that best fits my needs with the limited option packages, than pay $22K to get essentially the same thing but with more individualization.
     
     

    • 0 avatar
      MBella

      I agree with you. Say GM did this with the Cruze. I went into the dealer and wanted the stripper model, only with leather seats and sat nav. How much would this BTO order creation be? I bet you way more than an equivalent one of the lot, that also includes everything else. Complicating the production line is not the answer, and something the Japanese learned years ago. Offer a few trim packages at reasonable price levels. If a customer wants option A, he’s not going to be pissed off he’s getting option B and C too, for the same price.

    • 0 avatar

      I can’t imagine anyone using batgirl as an avatar, don’t u no star trek?

  • avatar
    HerrKaLeun

    Bertel, you miss to mention that the built-to-order cars that are available right now (i.e. BMW) do a much better job in scamming costumers for options. It also is less efficient to built each car individually. I don’t think costumers are ready to built-to order.
     
    In fact, you already can built-to-order most cars in the US, but costumers don’t use that option. I did that for my Mazda 6 since the combination I wanted was not available (hatch, MT, 4-cyl., gray, Grant touring). but most people wouldn’t want to wait 3 months. You make it sound like US costumers are not able to do that, while they chose not to do that. Of course, the sales man is more interested in selling what he already has on the lot and paid for.
     
    In the built-to-order world the sales person also has much more power over you when knowing what each option really costs and skimming you even more. I don’t think the US costumer wants the sales man to have even more power. Dealing with sales people is already bad enough when I just have trim levels.
     
    built-to-order also gives manufacturers/dealers more options to charge you extra for standard features in the name of individualism (that power lock is an $ 1,000 option, so that you can differentiate yourself from your neighbor). In Germany all cars have standard color red or white (which there is the least favorable most depreciating color). Any other color is called “metallic bla bla bla”and cost $ 800 more. Do we really want that?
     
    I’m happy with the way it is, paying $ 5,000 less for a similar car than in Germany, and still having the choice to built-to-order if I really have the time to wait. Maybe it would be good if manufacturers would just get rid of the ridiculous trims (Honda Civic without AC, Nissan Versa without ABS – really?) and only offer 2-3 trims. then there can be some dealer-installed options (especially for electronic gadgets). that would keep production cost down, and still give me some individualism without having to wait 3-4 months.
     
    All you are asking for is already available to US costumers (maybe not for all brands, but most) Except that costumers don’t use that option, as statistics show.

    • 0 avatar
      Bytor

      BTO here doesn’t really get you anything different than you could in theory find on a lot. It is just if you want a rare combination, you may have to order it because that particular combination isn’t on the lot. But you still choosing from a relatively small set of options. You can still likely only choose between 2 engines.  Many cars now only offer MT on base models, again in America BTO won’t help. You still can’t order a higher trim with MT.

      In Europe even economy cars have at least half a dozen engine choices. So BTO America is not equal to BTO Europe.
      But I agree with the sentiment. Half a dozen engine choices means increased costs for everyone. I would rather have only the best two engines at a lower price.

       

  • avatar

    I didn’t miss the scamming part: “The salesguy has a dizzying arsenal of ways to up-sell you.”
    As for the efficiency, you need to have been there. The car is not “built individually” in the sense we understand. It marches down the assembly line, and magically, as it goes from station to station, just the right piece appears and goes into the car. You want it blue? The computer will spray it blue. Leather seats? Leather seats appear as it goes to the station where the seats go in. And so on. Fully automatic.
    As for the customer not taking it: The customer buys a car, The customer doesn’t care how it’s made. If what he wants is on the lot, he tales it. If the dealer needs to call around and find it, he’ll take it. If the dealer needs to order it, he’ll take it. But the dealer wants to move what is on the lot, and he’ll be damned before he’ll offer a built to order car.
    While I was in the USA, I bought a black Expedition Eddie Bauer, tan leather, every two years. The dealer could plan ahead. On the last one. there was a TV set for the rear seats in it. “Did I order that?” “It’s great.” “Only my dog is in the rear seat, and he doesn’t watch TV.” The dealer had only that car and had to eat the price. It was quite pricey, if I recall correctly.

    • 0 avatar
      HerrKaLeun

      The final assembly line efficiency might not suffer. but the overall design and the parts will be more expensive. Having to design the car for 10 different engines, different brake systems, and ordering different parts makes it more expensive. If I buy 1 million Golf and only 500,000 have AC, then each AC unit will be more expensive. I know now the Golf has AC standard, this is jut an example. VW used to offer the very same car with carburetor and injection. What the hell? Of course offering two different fuel systems will make it more expensive to manufacture. Ironically injection is cheaper to manufacture than an electronic carburetor, but the carburetor was a less expensive option to the costumer.
       
      you are correct that the costumer doesn’t care how it is made… but he cares about 3 months waiting. and less popular features will prolong it even more. In addition the contracts are written, so that even when it takes longer than they promise, the costumer still has to take the car. I had ordered a Seat Ibiza with curtain airbags, which at the time wasn’t standard. It took 2 extra months just because of those. BTO might work if the contract would say ” 3 months from today, or the costumer can refuse to accept the vehicle”. In practice the costumer signs the contract expecting 3 months. If it takes 5 months, he is out of a car for 2 extra months without the right to just go elsewhere.
       
      I know Dell was used as an example. First, they built horrible desktops. Second, their built-to order is a matter of 2 days, not 3 months. If it was 3 months, no one would use them. the costumer is to impatient. life is too fast to wait 3 months. 30 years ago it was acceptable to read news in the newspaper the next day, today I expect to read them on my phone the second it happens. If people were patient, they wouldn’t camp in front of best buy to wait for the new play station. They want it today. If i see a new car i want, i want it today. Even waiting the few days for them to prep it is too long. Of course, some people are willing to wait for that special car (and i did so myself), but the majority of buyers isn’t.
       

    • 0 avatar
      John Horner

      Build to order doesn’t have to mean that there are more options and configuration than the manufacturer wishes for there to be, it simply means that the customer orders the one they want. Several years ago I wanted a manual transmission Honda Accord with leather and a built in navigation system. The dealer finally found one, 400 miles away. I would have been just as happy to simply have it built for me. Heck, I might have flown to Ohio to pick it up and drive it home to California. I have lots of friends and family between here and there and it would have been a fun road trip. Icing on the cake would have been if they had deleted the many hundreds of dollars in delivery charges in return for me picking it up myself.
       

    • 0 avatar
      Highway27

      And you’d also might rather have one built to order than have the one that’s been schlepped around the lot for months waiting for someone to buy that rare combination of color / transmission / equipment.
       

  • avatar
    CJinSD

    American buyers used to be offered a bewildering range of engines in many model lines. If you knew what you were doing in the ’60s, you could order any car as a boring fleet sedan that could barely get out of its way on up to a fire breathing homologation special with a NASCAR or Trans Am racing engine. In between were variants with numerous different displacements, different induction systems, and camshafts with different lifter configurations. It was our emissions rules and Corporate Average Fuel Economy standards that changed all this. Now US market automakers need to spend a fortune certifying every engine and transmission that they offer. Then they need to balance the supply of the different drivetrain configurations built in order to meet their fleet average economy requirements. If Americans want more choices, we need to dismantle the EPA. It seems more likely that constant propaganda has made the majority of us learn to love our cage.

    • 0 avatar
      HerrKaLeun

      Europe has emission standards too and each combination of tranny and engine must be tested and fuel efficiency of the average car is much better than what CAFE requires- somehow that doesn’t stop them from offering a (ridiculous) number of engines.
      It is just cheaper for the manufacturer to offer fewer engines. and MT is not being phased out due to the EPA, but because most costumers don’t want them (sadly).

    • 0 avatar
      golden2husky

      Change in engine choices and options has nothing to do with the EPA.  Detroit chose to emulate the Japanese with option packages to simplify manufacturing in the early 80s.  I still recall people considering option packages better than Detroit’s “nickle and diming” stand alone optioning.  I guess those folks who made such comments never shopped for a BMW.  They have the nickle and diming thing down pat. as for the EPA. go to a boat or classic car show to give yourself a taste of what you’re daily commute would smell like if the EPA disappeared.

    • 0 avatar
      SimonAlberta

      Just a comment on the quoted “ridiculous” number of engine options in Europe;

      Bear in mind that a big percentage of cars in Europe, and especially in UK, are company bought vehicles. As such they are used as rewards/incentives for job performance or attainment of grade levels etc. and so the availability of a wide range of engines enables one model range to serve a wider range of end-users.

      For example, a junior sales executive may get a base-level trim car with a modest engine, a more senior man may get the same car but with up-level trim and a fire-breathing engine.

      That same model also has to appeal to the private buyer who may have a different set of criteria in mind.

      It’s a case of horses for courses.

  • avatar
    Paul Niedermeyer

    BTO was much more common in the US decades ago. In the mid sixties, a full size Chevy had up to ten different engine choices. And the option list was huge, and they weren’t packaged.
    The Japanese changed the system in the late sixties: they imported cars fully/properly equipped; there were no stripper Coronas. That system was critical for their success, because it allowed them to streamline their production systems dramatically. And BTO from Japan then didn’t make any sense. Americans loved it because they felt like they were getting more car for the money. Which is true.
    The Japanese approach has clearly shown to be more efficient: a few trim levels, and a few option packages. Everyone has adopted it in the US, and cars have become commodities. And costs are lower for the manufacturers who don’t have to worry about changing the production stream constantly.
    BTO may make good sense for luxury brands, but I doubt you’ll see BTO Camrys or Sonatas any time soon in the US.

    • 0 avatar
      HerrKaLeun

      + 1
      BTO has its justification for upscale cars because:
      - those buyers often have multiple cars, so waiting isn’t so bad
      - whoever buys a BMW / Cadillac shouldn’t care about the extra cost
      - those vehicles are bought for image, there the differentiation is more important.
      but 95% of the people buy a Camry, Sienna or whatever to meet their needs and they don’t give a hood if their neighbor has the very same options. they rather take the savings. 95% of car buyers buy a car because they either see it and fall in love with it, or their old car breaks down and they need replacement. In both cases waiting for months isn’t an option.
       

    • 0 avatar
      Monty

      Not so! When we bought our son his Toyota Yaris, we custom ordered it. The salesperson warned our son that it would be a minimum of six weeks waiting period (which ended up being almost three months), But my son didn’t care; he was willing to wait for the specific options and colour we ordered. Plus, he got a 2007 model year, which still weren’t on the dealer lots yet, so taking a car from inventory would have been a model year penalty as well.

      Yes, it did cost more, as the dealer wouldn’t budge from MSRP on a BTO Yaris (at the time, in Canada anyway, Yarii were flying off the lots, and some dealers were adding markups to the MSRP), but my son got exactly the combo he wanted, and after all, it’s a Toyota, so it’s going to run forever.

    • 0 avatar
      DC Bruce

      +1 Also.  In the 1950s and early 1960s, everything was optional on American cars: the clock, the radio, the right outside rear view mirror, a sun visor for the passenger side,  the heater (the cheapest was the recirculating air type; one that brought in fresh outside air was optional at extra expense), not to mention engines and transmissions.
      This made price shopping very difficult, because comparisons were not exact.  Also, there was a perception that a buyer would end paying sticker for a B-T-O car, but would “get a deal” on one off the dealer’s lot.
      The “European model” you describe makes intrabrand competition almost non-existent.  Dealers are essentially order-takers.

  • avatar
    65corvair

    I like build to order.  Works best at little dealerships who don’t have much stock.  One big dealer said to me,”We have 45 ****’s, and you can’t tell me there isn’t one you want?”  Well, no, so I ordered a car at my local tiny dealer.  Down side it takes month’s, not weeks.  The salesman knows if you don’t leave with a car now, you are never coming back.  Most customers want to leave with a car today too.  I waited six months for my Fiesta!  The upside I got everything I wanted and didn’t pay for things I didn’t want. 

  • avatar
    Brock_Landers

    BTO delivery takes more than few weeks in Europe. In my country at least 3 months for BMW (I’ve heard that it is the same for the rest of Europe). And there is always the risk that dealer cannot get all the options right. Then you have to wait another 3 months. You really have to be a car nut to wait that long. Average buyer wants their appliance right now. Today. Or at least in few days. Americans are not ready to wait for their appliances for months.

  • avatar
    krhodes1

    BTO doesn’t add costs. You still have to tell the assembly line what to assemble, does it matter whether the customer, dealer, or manufacturer central planning does the telling?
    Why on EARTH would you build a bunch of cars that don’t have buyers already waiting for them? This is the route that leads to all those fields full of cars. Or Saab giving $14K discounts

    Just because in Europe manufacturers offer everything at extra cost, and offer 20 engine choices in a Golf does not mean it HAS to be done that way. You can have the exact same relatively limited options as here and still do 90% BTO.

    Though I think it makes sense from the manufacturers perspective to offer more options BTO – it increases profit! For example, in the US I cannot buy a Jetta TDI Sportwagon in Blue with a tan interior – VW in thier infinite wisdom only offers this car in this color with gray or black interiors. I could buy a red car with tan, but not a blue one. But in a BTO world, why not? Doesn’t cost them a cent, makes the customer happy, and they could even do as Volvo does and charge a small fee for doing it.

    I actually am planning to BTO a BMW next year. I want a RWD 3-series wagon with 6spd stick and a couple of options. This car flat-out does not exist on a dealers lot in the US, they are all automatic AWD cars. Hoping to do factory delivery on it and take a couple weeks vacation in Europe with it.

    • 0 avatar
      HerrKaLeun

      all those fields full of cars are not because of the lack of BTO, but because of the cars are not desirable. Saab is a dead brand (more or less). BTO wouldn’t change that.
       
      VW (and others) do the same stupid limitations in Europe with BTO. There you also can’t freely combine outside of what they think you should be allowed to. And if they let you, then you can order that blue leather only when you buy that $ 2,000 CD changer and the $ 2,000 alloys. BTO doesn’t change the corporate marketing. I would have ordered my Mazda 6 4-cyl. as wagon, but since they only offer wagon with 6-cyl. I settled for the hatch. BTO didn’t give me any more choices of what I can do (only more choice of what they actually built out of their pre-determined choices)
       
      For a BMW buyer like yourself, BTO is a thing that works since money isn’t necessarily an object and you seem to have time to wait and the Europe vacation sounds cool. but 99% of car buyers don’t buy like that. Not that they wouldn’t want to. But they couldn’t afford to. BMW buyers aren’t really representative.
      Have fun with it… how does factory delivery work? Do you have to ship it yourself then? Or? I only can imagine factory delivery on the same continent so you can drive it home.. but in Europe? Do they show it to you in Munich before they put in a container? Can you even drive it there since it doesn’t meet European regulations (emission etc.)?

    • 0 avatar
      Bytor

      You are right if you do BTO with the same limited options as today, then it won’t increase costs, but then again you aren’t really getting a benefit either.
      When you actually start getting the benefit of BTO is when the options are wide open, but when you get a dozen power-train combinations, then there will be many increased costs for everyone.
      More choice costs more money. It is as simple as that.
       

    • 0 avatar
      HankScorpio

      BTO does cost more money.  A simple example would be power windows.  You know at the beginning of the model year you are going to make 60K vehicles with power windows, so you make a deal with your power window provider to provide 60K power window units in a specific time frame.  The supplier knows what they are getting into and can give you a better price based on KNOWN volume.  Now in practice this is much more complicated in a JIT environment because orders can change depending on market forces and changing option mix.  However, suppliers are still given weekly, monthly, quarterly estimates of parts to supply. In a BTO environment, the quantities can be estimated, but not known. The uncertainty in turn raises overall cost.
       
      BTO also adds cost in build control systems and quality control.  If you are Honda and you make an LX, DX and EX, you have three basic cars to build.  It is easier to control the parts that are installed and easier to make sure you did it right in the quality checks.  When everything is BTO, each line item of the vehicle needs to be verified prior to shipping.  This takes more time, more people and more technology to make it work properly.  BTO is what the Japanese call Muda; waste.  It adds cost to the vehicle without adding value if 99% of the buyers are satisfied with the predetermined option levels.

    • 0 avatar
      krhodes1

      So why build undesirable cars that don’t have buyers? BTO would mean they never get built in the first place! Just plain stupid. Production can probably never be 100% BTO, unless yo consider dealer orders for stock to be BTO as well, which some manufacturers do. And again, this is not in any way a revolutionary concept, most cars in Europe are already sold this way, and most Minis in the US. And BMW is pushing it, hard.

      I find it baffling that people make thier second largest financial commitment on a whim.  Even when buying my deeply discounted leftover Saab from dwindling stock, I STILL searched every Saab dealer’s inventory East of the Mississippi to find my car. And if I had not found a 6spd wagon, I would not have bought one at all. If an 8 week wait causes someone to change thier mind, then obviously they should not have bought the car in the first place!

      As to how BMW Factory Delivery works, it’s quite simple. You order your car at your local BMW dealer, they give you a date when you can pick it up in Germany. BMW gives you a nice discount off MSRP, a pair of plane tickets (sometimes), and a night in a hotel. They also include European insurance for a couple weeks, which is cheaply extendable to up to a couple months. The car also gets a temporary German license plate. On the appointed day, you show up at the BMW center, they give you a song and dance, and you drive off in your new car. You drive around for a couple weeks, then drop the car off at any one of twenty-something locations across Europe. BMW ships the car to your local dealer (takes 4-5 weeks), they shine it up and you pick it up again.

      No issues with not meeting regs, the car is US spec. Just like you can bring a European car to the US on vacation temporarily, you can drive a US car temporarily in Europe too. Last time I was in Hungary, I had an early 90′s Buick LeSabre waft by me with Illinois plates on it!

  • avatar
    twotone

    I grew up in the 1950′s — 1960′s in rural Connecticut. My dad was a tried and true Ford man. We’d get a new car every four or five years (fond memories of the Country Squire station wagon). Every car my dad bought was custom ordered. I don’t remember how long it took to receive the car, but I’m guessing a month or two.

    I’m waiting for Mercedes and BMW to figure out how to custom order five year old used cars.

    Twotone

  • avatar
    AJ

    I did a build to order for my Jeep TJ and I had corporate pricing so I saw upfront the prices for the options.

    I don’t know that it would cost any more in manufacturing? Last May I toured the new Wrangler factory in Toledo and computers tell the humans what to do as all of the parts are brought in by robots/ computers to the line. Even the supply trucks are unloaded by robots so as long as the parts are in stock, everything just comes together to build what is programed to build. Even if someone was to put the wrong decal on they showed us that the computer would notice and not allow the vehicle to move ahead on the line.

    The issue I see is back at the dealer as they want vehicles in stock to sell on the spot and not give the customer time to think it over (lol)? That is why they give you such grief when you ask them to check other dealers for a particular vehicle.

    • 0 avatar
      Steve65

      as long as the parts are in stock,
       
      As a person who had a career in production planning and inventory management, I can assure that that this is nowhere NEAR as simple to execute as it is to say. Making sure that the right parts are in the right place at the right time, for the right price, is an entire industry, and not one for the faint of heart, the slow to react, or the easily confused.
       
      I’ll give a hint – every item has a different lead time, but they all have to be in the same place at the same time for final assembly. And warehouse space is cash circling down the drain, all day every day.

    • 0 avatar
      nikita

      Why then was this done so commonly in 1960′s America, before computerized inventory and production controls existed. Yet a ’65 Chevy was available in 15 exterior and seven interior colors, in four sizes, several body types (sedan, wagon, hardtop, etc.) and three trim levels each, not counting several powertrain choices before you even start talking about individual options.
      Back then imports gave you only the choices coming off the boat, with dealer installed accessories, such as a radio.
      The costs of having dealers with many acres of storage lots, especially in high cost urban areas astounds me. The local Ford dealer used to occupy no more space than two strip malls.

  • avatar
    dwford

    Build to prder is a pipe dream. As others have already noted, most customers want their cars RIGHT NOW, and dealers want the same think, since a customer that leaves without writing a deal only comes back about 10% of the time, and even if they write a deal, then leave, there is a good chance of buyer remorse setting in and having them cancel before deliver. My store alone had 30 deals cancel in the month of October.

    Also, an ordered car is not going to be discounted as much as the one that has been sitting on the lot getting floorplan charged against it.

    Then there’s the cancelled order. What’s to stop the customer from cancelling their custom order? In most states, dealers can’t legally keep deposits (though many put up a fight to try and keep the deal). Now the dealer is stuck with that customer’s dream combo of odd options. Then what?

    • 0 avatar
      HerrKaLeun

      it would be interesting to see how that legally works and how long the costumer can cancel without losing money. If the costumer has the right to cancel, then the system will be expensive for the dealer. If the dealer has the rights to force the sale or keep a deposit, then the system will be expensive for the costumer. Either way, it will be expensive for someone, which will increase average car prices.

    • 0 avatar
      SVX pearlie

      All you really need is a non-refundable deposit, and if you’re smart & clever, the deposit is proportional to the rarity of the order.

      That is, you order a beige car, the deposit is $100 or so. You order something that nobody else has ordered, the deposit is 20% or so. This way, if the buyer cancels, they’re basically out the effort it takes the manufacturer to find someone else who wants the car.

  • avatar
    scottcom36

    When did American manufacturers stop doing build to order? I bought my ’98 F-150 that way, a fairly plain truck with the key options I wanted and saved $1,500 over the sea of XLTs on the lot. It took four weeks, built in Canada, shipped by rail to Boston and by truck to my dealer.
    Many Americans expect instant gratification and wouldn’t tolerate waiting a month or two for delivery.

    • 0 avatar
      dwford

      Ford and GM still do factory orders. Not sure about Chrysler.

    • 0 avatar
      HerrKaLeun

      dwford: exactly my point, most (if not all) manufacturers already offer BTO. At least for models built in North America. Mazda does, as you mention Ford and GM and probably all other US-made cars (i.e. Camry). The point is, that costumers already have that choice but chose not to use it. Therefore I don’t understand the article how BTO could work in the US… it is offered and (for the most part) isn’t used.
       
      When I lived in Germany, I could for the love of god not imagine anyone not doing BTO, but to just take one of the dealer lot cars. In that, I changed my mind and enjoy the option to just take a car at any time. The difference in Europe is, that (former) laws prohibited dealers with multiple brands and gave the tiny dealers much power. This results in many small dealerships only offerng one brand. Of course, they don’t have the capacity to have a hundred cars. they have maybe 1-2 of each model. In addition the manufacturers offer so many (useless) engines. the Golf used to have a 75 hp (1.4l) and a 90 hp (1.4l) engine. the 90 hp had better mileage. So why would anyone take the 75 hp engine? simple, VW charged $ 2,000 extra for the 90 hp (and it might have cost then $ 100 more in production). Then there was the 100 hp engine, the 115 hp engine. I was wondering when they start introducing fractional horsepower motors to give me even more choice. In addition all the diesels. given all this marketing idiocy and the anti-competitive laws in Europe, BTO prevailed and cars cost $ 5,000+ more than int he US at similar trim. i take less choice and my $ 5,000 any time. although, I would like the choice of one smaller and more efficient engine. But not 10 engines.
       

    • 0 avatar
      dwford

      Herr, the Japanese and Korean makers in the US don’t do factory orders.

    • 0 avatar
      HerrKaLeun

      dwford: I BTO’d my Mazda 6 made in Michigan

  • avatar
    MarcKyle64

    I’d LOVE for the BTO system to be more prevalent. I test drove an Accent with the automatic transmission, and while the car was pleasing to drive and I really liked the handling, the transmission left me cold.  I’ve always been a M/T kind of guy, the first 4 cars I had were manuals.  If I’m going to be making payments, I should be paying for what I wanted rather than what was on the lot.
    I tell the saleshark I like the car but want a M/T. “Sorry, we don’t have one in stock and there’s not one in the state”.  “Can I order and wait for it to get here?  “No, we get what’s allocated to us from the boat”.  I walked away.  Automakers might not realize that many more sales from BTO, but they would be there if they cared to try and they’d be stealing sales from the guys that don’t do it.

  • avatar
    Carlson Fan

    “Ford and GM still do factory orders.”

    The kicker there is they still try to persuade you to buy something off the lot that has incentives on it which might not apply to your “ordered” vehicle when it arrives months later.

    The problem w/make to order cars for the consumer is that weeks/months is too long. Toyota who manufactures better than anyone, was supposedly aiming to take “lead time” of an ordered(custom) vehicle down to days. Imagine that! Order your new car and 6 business days later pick it up at the dealer. That would be huge.

    • 0 avatar
      HerrKaLeun

      the sales guy always tries to do what is best for him.
       
      I believe in the 6-business days BTO when I get it in writing that the dealer has to pay me liquidated damages for every day beyond that.

  • avatar
    Dragophire

    BTO is ok for some folks and not for others. My wife in 07 built online her ES350 in MoonShell Mica with the Ultimate Pkg.  She put down 10k and waited 14 weeks.  She was told that they could not find it anywhere in the US on any Lexus lots.   They had to “make it” for her.  Since then I have been checking online and only have seen about five for  sale since then. They dont make the color anymore.  As for me my 08 CX9 in Blk cherry in GT form was easy to get fully loaded.  I only choose the color and some minor extras but all of this was on the lot.  The dealer had seven the same color and pretty much same options the only difference was auto start, thats it.
    I personally prefer having the choice on the lot. also you guys dont forget you have the internet now to research where a car might be.  I found mine at a dealer in a suburb of Chicago and at the time I lived in NC. The dealer took the car I wanted off the lot and stored it for me. They paid for my plain trip and picked me up at the air port. They paid for my over night stay in town as well. Woke up the next day and 12 hours later I was home.

  • avatar
    DenverMike

    OK, I’ll take a base Mustang with the 5.0-liter /MT, vinyl seats, rubber floor, radio delete, and crank windows. What? You said I could get it ANY damn way I chose to order it…
     
    All right, all right. Even the base Mustang V6 comes standard with power windows/door locks, carpet, criuse, cloth, etc, etc and no ‘delete’ options.
    Then again, the base F-150 does come pretty bare bones. Hmmm… Let’s see; A regular cab, 4X2 shortbed XL is $22,415 MSRP and can be ordered with the 5.0-liter 32-valve  V8 ($1000) and 3.73 limited slip ($300). I think I found my next new car!

  • avatar
    baabthesaab

    I have special-ordered all of my cars that I have bought new. 4 Dodge Caravans;’85,’91,97,’02, 2 SAABs; ’94 900,’01 9-5 (both to get cloth seats instead of leather). All took between 6 and 8 weeks. Not only do I get the car I want, but I can have dealers compete on price for the EXACTLY same car. I got very good pricing each time.

    • 0 avatar
      SimonAlberta

      Exactly right. Spec up the vehicle you want and then ask multiple dealers to bid for your business. Best price wins. Good for the buyer, OK for the dealer. Less profit but easy sale.

  • avatar
    Zig

    I agree that ordering is the way to go. I have ordered every new car/truck that we have ever bought. It just makes since to get and pay for only the options that you want.  I wonder how many people buy off the lot and only once they get home they realize all the options that they really got.  Hey honey. Look,…  we got heated mirrors and a engine block heater, yuk yuk…
    I also believe that the 5 day car might be a little tough for the manufactures.  Sure they run different colors of paint at the same time, but they don’t run all the colors all the time.  Also they like to know exactly how many parts to order and have on hand. The parts makers like a few months lead time…
    I do think that we could push for more cars/trucks to be ordered.  The price with all rebates should be nailed down at the time of order. (no surprises).  I think most people would be happier with exactly the car that they want with no compromises.  The manufactures like the way it is so they can sell up loaded vehicles. It is really hard to find a striped down vehicle on the lot, because they make more money.
    If you are going to spend that much money, shouldn’t you get exactly what you want?

  • avatar
    JimC

    Don’t forget that most U.S. dealers now publish their inventories on their websites.  This is not exactly the same thing as buy-to-order but it is the next best thing.  You can usually figure out if there is a car you want at a dealer you can either drive to yourself, or just play dumb with your nearest dealer- they’ll usually trade dealer-to-dealer and you have to wait only 1-2 days.  You might end up paying for one or two options you didn’t really want or you can try to play hardball on the superfluous options.
     
    What I don’t like about new car sales in the U.S. is how backward and antiquated the business model is.  Haggling- why should two people pay a different price on identical goods?  My last new car I went with a pre-negotiated price service… boy, the dealerships hate those.
     
    I also hate salesmen who jabber about the previous model’s features but know less about the current mode than I do- the current model that I am interested in and did my homework on.  I don’t like the finance managers, the “four square” worksheets, the random giant calculator key mashing/computer keyboard typing while pretending to figure out what I can supposedly afford or what they’re willing to offer me on my trade that I said I wasn’t trading in, the add-on salesmen who drone on about the special high-tech paint protection package (uh, it’s called wax, all cars have it, and yours is not special), offers of extended warranties and maintenance by the dealer’s factory “trained” techs who subsequently perform shoddy work…  Gee, I had to have missed something in that rant.  Oh- the complimentary first tank of gas (which would be like fast food joints bragging about complimentary napkins and straws).

    • 0 avatar
      Gardiner Westbound

      “What I don’t like about new car sales in the U.S. is how backward and antiquated the business model is.  Haggling- why should two people pay a different price on identical goods?”

      I like the current system. People with more money than brains who pay too much give me the room to pay much less.

    • 0 avatar
      Gardiner Westbound

      “What I don’t like about new car sales in the U.S. is how backward and antiquated the business model is.  Haggling- why should two people pay a different price on identical goods?  My last new car I went with a pre-negotiated price service… boy, the dealerships hate those.
      I like the current system. People with more money than brains pay too much. That allows me to pay much less.

    • 0 avatar
      JimC

      Touché, sir.

    • 0 avatar
      kkt

      I like the current system. People with more money than brains who pay too much give me the room to pay much less.
      It’s not brains, it’s time to play stupid headgames walking out or threatening to walk out while the dealer wastes hours of time trying to extract just another $50 from the customer.
       

  • avatar
    SPQR

    Forraymond is 100% correct about Alabama.  Moved here with my wife 13 months ago for her new job. It is absolutely devoid of any culture beyond football and Nascar. EVERYBODY is employed by the town, city, county, state or federal gov., or else is receiving a pension from one of those entities.  And they all describe themselves as self-reliant.  Want to fit in?  Put on blue jeans, sneakers, and a toothpick in your mouth upon awakening.  Buy a pickup truck, even though you have no use for it.  Moving here has been worse than going through the death of my parents.  Can’t wait to leave this dump.  Nobody reads books or newspapers-they are happy being ignorant and drive with football flags on their vehicles. Roll tide-lol.

  • avatar
    william442

    Tampa Mercedes sales says they can change cars already ordered to fit one’s requirements; with delivery in six to eight weeks.

  • avatar
    findude

    I love BTO, bring it on. We ordered our last three cars and had no problem waiting 10-12 weeks for delivery.
     
    I don’t think you need 10 different engine possibilities, 2 or 3 is probably plenty for most vehicles if they are chosen intelligently. Sure you can choose from half a dozen or more engines for your new Mercedes-Benz, but they are the mostly the same engines available across all the other Mercedes-Benzes being made that year. It’s not that difficult.  To me the big attraction is being able to break the insidious bundles that are the bane of the car buying experience in America today.  Why, tell me, must I have a sunroof if I want leather seats?  I despise cloth seats only a little more that I dislike sunroofs (I’m tall and long-waisted so the two-inch reduction in headroom rules most cars out for me). If I want the V6, why can’t I have the manual transmission that comes with the 4-banger? Then there is the bundling of unrelated options where you can only get certain safety features if you buy the upscale package that contains a lot of seriously overpriced luxury items you’d rather not have. The list goes on and on.
     
    Last time we shopped we ended up buying a used Accord instead of a new one.  Why? Because Honda could/would not configure an Accord the way we wanted it. It’s really simple, if I can get exactly what I want, I’ll happily pay more (even quite a lot more). If I can’t get what I want, I’m not willing to take the depreciation hit so I just buy used.  good news for the used-car market I guess. . . . .

  • avatar
    Glenn Mercer

    Good post and lots of good comments.  I won’t repeat any, but will add one more: in a TRUE build-to-order system (or rather, a 100% BTO system) the factory goes into an absolute tailspin, as orders surge up and down.  Take seasonality: in northern parts of the USA you’ll get no shoppers at all for much of the winter months, with the implication that the OEM has to lay off workers.  Then comes a nice April, shoppers appear, and all of a sudden we are paying overtime.  And this whiplashes through the supply chain, causing havoc, and havoc is costly.  Look at Dell, which was highly touted for doing “build to order desktops” back in the day.  Dell executives confessed that they OFFERED BTO for 100% of their output but for 90% of it converted BTO customers to BTS (build to stock): that is, if you ordered a Fireblast with a 1 GB hard drive and they had none in the production schedule they would offer you one with a 2 GB drive (that they DID have in the pipeline) at a discount, to switch you.  Voila, you got the BTO thrill and they got BTS stability.
    The other thing I might mention is history: the USA is so far-flung that we established an “overbuilt” dealer network in part to ensure we had adequate inventory everywhere (not such a problem in a densely-populated nation like Germany).  So we all grew up with a system loaded with local inventory, meaning we could get pretty much what we wanted off the lot.  When you are used to that, hard to switch to BTO (except of course for pickup trucks, which contractors highly spec and can wait for, and enthusiast or luxury cars, where buyers are pretty picky), as in: “Wait a minute Chuckie, I am gonna write you a check for $28,000 and you’re telling me I gotta WAIT a month for the thing?”  So habit is part of it.
    You’ll notice that the whole move away from BTO here (such as it was) got a further boost from the Japanese as their sales surged.  Building a car to order in Hiroshima for delivery in Iowa was not gonna work (too long a delay), and the option of sending over thousands or millions of cars in every possible build combination (to meet every possible demand configuration) was gonna be way too costly.  So the Japanese really adopted the trim level system (DX LX GS whatever), packaging the most popular options together.  This further “trained” customers not to do BTO, by bunching the options together.
    In Europe, with its different history (as some commentators noticed) it was a lot easier to go the other way.  Also, with very expensive land prices, it was a rare European dealer who could afford to park 500 cars out on the lot anyway.
    Note that BTO sales are as high as 60% in Japan, also for historical reasons: ultra-high land prices and Jeez, who wouldnt do BTO given the salespeople go door-to-door showing brochures and taking orders?!

    • 0 avatar
      nikita

      Instead of an “overbuilt” dealer network, the big 3 used to have assembly plants, organized by zone sales offices, all over the country. Most plants built a large variety of cars and trucks, not just one or two models like today. South Gate, CA assembled everything from Chevys to Cadillacs.

  • avatar
    Lorenzo

    Yes, American makers still take what used to be called “special orders”, but the choices, as Paul pointed out, are far fewer than they were in the 1950s-60s. It cost more back then, but Bertel is making two points: first, a modern computer controlled system can handle those orders with a wider range of choices at negligible cost, and second, that the American system of dealers financing floorplans (buying large inventory for quick-as-possible sale) hasn’t changed to accommodate BTO in any meaningful way.
     
    American makers have/are upgrading to the latest assembly practices, but haven’t expanded the choices to take advantage of BTO. Check out any 2011 model and look at the exterior colors available. Don’t even bother looking for two-color combinations. Interiors are black, tan or gray, regardless of seat materials, so forget red leather, let alone plaid fabric.
     
    Most American models are sold on price (the only reason Chrysler is still in business), so don’t expect makers to expand their options. If they do, the floorplan based dealer system has to go, or it won’t work.  About the only thing you can do is buy a car and have it painted later, add your own seatcovers, and maybe, dye some of the vinyl. Good luck with the hard plastic.

  • avatar
    MikeAR

    The worst thing about the current system is options packages that mandate 2 or 3 things you don’t want or need just to get something you want. If you would rather use your cheaper and better nav system, too bad you have to get the factory system in the package with something you want. I would be in favor of anything that gets rid of the options package system and goes back to a la carte ordering of options.

  • avatar
    Zykotec

    I think the worst thing is, in the old days (50′s and 60′s at least as far as I’ve read) American cars were built to order more or less. It is possible that many options were dealer installed , but you’d be lucky to find two identical 69 Mustangs or 58 Chevys (10 engine choices, 15-20 exterior colours or more, One and Two-tone paint and 5-10 trim levels, etc.) back in the day. Then along came the Japanese. An Accord would have either nothing, or you could have the EX with power everything, and two choices of engines. And then the American manufacturers followed (well, 20 years later) cause this was a much more economic way to build cars. And then the marked changed again…

  • avatar
    Robbie

    A friend of mine in Holland is waiting 5 months for his RAV4 right now. He thinks that the US is lightyears ahead of Europe, with large amounts of cars on the lots…

  • avatar
    Dukeboy01

    Here’s a geography related question to consider: How much of the prevalence of build to order in other countries is a function of the lack of physical space to build 50 acre parking lots to store and display new/ used cars on? I spent most of my childhood (mid 80′s to early 90′s) in South Korea and they didn’t have huge car lots the way we do in America. They don’t have the space.

    I imagine the same phenomenon would exist here in major cities if the car lots hadn’t been built decades ago when land was cheaper. A downtown dealer today might be able to expand by buying a lot or two next to the property that his grandfather paid off back in the 40′s, but I would imagine that brand new construction of car lots today occurs strictly in the suburbs as opposed to inside the city limits or near downtown. Here in the Lexington, KY area I’ve seen two new dealerships go in during the last year. One (Lexus) built on the space that had been occupied by a huge used car lot and is close to downtown. The other, a Ford dealership, moved across the county line and built a huge new dealership in the next town over. Their lot was sold and redeveloped as a small shopping plaza.

    How are cars sold in Australia or other places with plenty of elbow room? If you’ve got the space to build a huge lot that can contain a variety of models and trim levels, why wouldn’t you? Build to order is neat, but completing a sale two hours after a customer walks on the lot for the first time instead of two months later has to be more satisfying for the dealer.

  • avatar
    dougjp

    At least the Europeans have the luxury of having options. Anyone noticed how in the North American “prepackaged” world, things you want aren’t available at all when they used to be?
     
    Want a manual 6 speed with your NON-base version car? Or with your V6 or turbo 4? FAIL. We are being told what we want and don’t want, yet its our money! They get away with it because a majority don’t care or want certain options.

  • avatar
    plee

    I only ever ordered one new car from the factory,  a 69 loaded Javelin.  It was at the dealership in NJ in less than four weeks and it was a great experience.  When I sold new Audis a few years ago,  I was always happy to write a factory order,  I figured it was commission guaranteed in the future.  We were a small dealer and did not have a lot of inventory.  If the configuration my customer wanted was not in the next allocation,  I would just call my factory rep and she would almost always be able to pull the body/drive train combination from another dealer’s order bank or from a zone pool and let me order it the way my customer wanted.  It made for great customer experiences since throughout the process I would be able to give them production date,  completion date and when it was going to arrive in port.

  • avatar

    As a guy who buys and keeps cars for a long time, I did a build to order for my last car.  BMW kindly built me a car with NO sunroof and with a cloth interior, options that don’t exist in the US order book but if you ask, it can be done.  The Dealer tried to get me to buy “off the lot” which would be better for him, but I’d waited this long, three more months weren’t going to kill me.
    This isn’t normal.  Most of the time the car makers in the US have an assembly line they need to keep going, so they “best guess” the builds and options.  This also assures that when you get to the lot, the car they have won’t be the one you “built” on-line or researched the prices of.  Score this one for the dealers.
    We also expect instant gratification, so that car has to be there NOW with a loan NOW and you “sign and drive”.  Score two for the Dealers.
    Having the car I want was worth the wait, but as most car buyers in the US go shopping when old bessie dies, and need a car NOW, it won’t be common.  Score #3 for the dealers.

    I had a copy of the German order book the year I did this, so I had the real full option list. The coolest part, which I only found out after the car was built, was that you could have ordered ANY color in the palette, not just the ones for that model. There was a cool blue on the 5 series that year…..

    • 0 avatar
      Wagen

      I’ll be doing BTO for my next BMW some time mid next year.  How recently did you do an order with options not on the US list?  I’d love cloth seats in my next car.  I just have a feeling based on previous experiences that the sole BMW dealer in my town isn’t going to be willing to do anything extra to order what I want if it creates even the slightest difficulty for them. 

    • 0 avatar
      SimonAlberta

      Just a comment on the idea that manufacturers build on a “best guess” basis as to what is going to be needed.
       
      Unless things have changed in recent times, when I worked for a Ford dealer we used to order our vehicles specced as we saw fit. Indeed, I was actually the guy that made the the decisions and placed the orders.
       
      So for Ford, and I believe GM and Chrysler also, it is the dealers that decide what gets built not the manufacturer.
       
      As I said, it used to be that way at least.

  • avatar
    The Gold Tooth

    Executed properly in the new car market, BTO could eliminate an entire class of automotive parasites, the dealers.

    There’s no reason why auto manufacturers shouldn’t have their own retail operations staffed by their own employees (who would be recruited mainly, I suspect, from the ranks of the ex-employees of the dealerships). Imagine the savings for the consumer, with no middlemen to pay!

    No reason, that is, except for the laws prohibiting such arrangements passed by legislatures beholden to the auto dealers’ lobby. Look at how hard it was for a couple of union-bankrupted manufacturers to let go a handful of superfluous dealers, and imagine how hard it would be to get rid of all of them! We can but hope.

    • 0 avatar

      And, look how the dealers got themselves opted out of financial disclosure regulations, which is a hoot as the “car loan” is the biggest non mortage note most folks sign.  A great tribute to lobbying again overriding the public interest.

  • avatar
    Quentin

    We ordered our MINI.  It was a pretty good experience because they kept us up to date on the arrival and the car arrived from England in 9 weeks, I think.  One thing they missed was telling us that cruise control didn’t come standard; the multifuction steering wheel was required.  So, that is a bummer, nearly 6 years later.  Overall, good experience.  It seems that most MINIs are ordered, so they acted like it wasn’t something foreign.
    We also ordered out VW GTI.  It was far less enjoyable because every dealer I called tried to sell me what they had on the lot.  I often started my calls saying that I knew the configuration I wanted wasn’t anywhere in the country and that I’d have to order.  Eventually, I got prices for the build from 4 or 5 dealers and went with the one that offered the best price.  Nearly 5 months later, the car finally arrived.  The dealer could rarely tell me anything and why it was taking so long.  I actually found someone on vwvortex that looked the VIN up on their system and was able to tell me where it was.  Pretty irritating considering they required a $500 deposit.
    My Toyota was “ordered”.  The packages turned out that what I wanted was a common package for what Toyota sent to the local dealers.  It took about 2 months, but I didn’t get the vehicle I “ordered”.  The dealer found one that met every criteria of what I’d ordered other than the outlet in the cargo area.  Close enough.
    Basically, they need to go all in ordering (MINI) or prepackaged (Toyota).  The sell-what-is-on-the-lot-but-reluctantly-offer-ordering way of VW was a pain in the ass.

    • 0 avatar
      Russycle

      I bought a Mini last year, and yes, most are BTO.  Wait was about 8 weeks, including sailing from England to California.  So easy with the internet to research options before you go to the dealer.

  • avatar
    amca

    Where this is needed most is in the luxury field, where the cars are becoming less and less distinguishable from lower priced cars.  The new luxury will be individuality.

    • 0 avatar
      Educator(of teachers)Dan

      Awesome idea. How much cachet would Cadillac get back by doing that?  Maybe people would pay full price for them.

    • 0 avatar
      chuckR

      Porsche will paint to any sample that meets environmental regs, install leather or carpet in any sample color they lay hands on, add any number of CF, wood or leather-covered details, add any number of exterior trim pieces, etc, etc.
      You don’t want to pay for it, though. Well, I don’t.

  • avatar
    John Horner

    I’ve come to the depressing realization that the average European car buyer is simply smarter and wiser than is the average US buyer. Considering the expense and durability of a vehicle, it should be a thoughtful purchase in which you get exactly what your really need/want. So what if you have to wait a few weeks from signing the papers to having your car. Doesn’t anticipation make the final act all the more satisfying?
    Back in the early 1980s I suggested to my father, who was a car salesman at the time, that build-to-order was the wave of the future for US auto sales. He thought me simple minded, and turned out to be right. The typical US car buying experience is a glorified impulse purchase and people are addicted to instant gratification. Never mind that the payments will go on for years, buyers want their new car fix NOW!
     

    • 0 avatar
      Wagen

      +1 and my own closely related revelation:

      I’ve come to the depressing realization that the average German driver is simply smarter and wiser than is the average US driver.

    • 0 avatar
      SimonAlberta

      I think your second paragraph nails it.
       
      If all vehicle purchases were on a BTO basis I am pretty sure overall sales would be dramatically lower because that impulse element will be almost entirely removed.
       
      I was in vehicle sales around 20 years ago and it was hilarious how often a customer would buy something completely different to what their stated needs were. “Yeah. I need to replace this sedan with something a bit bigger. I have a family and need maybe a minivan or even a crew cab truck. Gee. This Mustang convertible is nice. How much? OK, deal. The wife won’t be happy.”

  • avatar
    Robert.Walter

    At the time I bought my 1981 VW Cabriolet I could only get the thing with a lousy grey cloth interior and roll-up windows … neither leather nor pwr windows were offered (had been in the past but not in 89) … i was really jealous of the germans that they could get the same car with a full leather trimmed interior…

  • avatar
    skor

    BTO was common in the USA back in the 1960′s.  One of the reasons that the original Mustang was a such a success.  You could order a Mustang with a wheezy little Falcon 6, 3 on the tree and a bench seat in front.  Or you could order it with  a four speed and big block topped off with a four barrel.  Or anything between those two extremes.
     
    BTO ended for a number of reasons:  As it’s already been stated, BTO costs more, and BTO confuses many potential customers.  You all missed on other important downside.  When BTO was common, many customers abused the privilege.  More than one wiseguy would place a small deposit and then proceed to order a black car with black interior and no AC.  When the car arrived, said customer would refuse delivery unless he got a substantial discount over the the previously agreed price.  Good luck trying to sell a car like that on the lot.  Or a car that was ordered with pink paint and polka-dot interior.

    • 0 avatar
      DenverMike

      An original BTO Mustang with a three on the tree or a front bench seat would be a rare find now a days. As would a BTO 4X4 Mustang for that matter! LOL?

    • 0 avatar
      Robert.Walter

      We had a ’69 Cougar with a bench-seat (one of 1200 out of 100,069 produced that year …) but it had a select-shift automatic (btw, I never heard of/saw a column-shift Mustang.)

    • 0 avatar
      SimonAlberta

      There are often negative comments about dealers on this forum but customers have a lot to answer for too.
       
      I would love to go back in time and find out how the current system of adversarial bargaining got started. I can’t imagine it would have been a dealer’s first thought to start giving money away.

  • avatar

    I could be wrong but I think a major factor in moving away from BTO in the US was the 1973 and 1979 oil crises. As Paul and others have pointed out, BTO was much more common in the 1960s, my dad ordered his ’61 Pontiac. When the oil crisis first hit, cars started piling up. Around Detroit there were huge storage lots as the excess inventory soared. I think that’s also when Detroit started getting into the incentive game too.
     
    Also, somewhere along in there, the business model shifted to having huge dealer inventories, not something you’d see in the 1960s. Remember, in the 60s, most of the dealers were located in cities, where they didn’t have acres and acres of storage. They had a few cars in the showroom, some demos for test drives and a small number of cars in inventory in the fenced yard in back.

  • avatar
    ajla

    Well, I would really like it if I could get a rental-spec Charger SE with the HEMI V8, an Ecoboost SHO not loaded with luxury stuff, or a low-option Impala LT with the 3900.

    • 0 avatar
      Educator(of teachers)Dan

      I agree on all those points.  Although as recently as 2009 model year you could get an LT with 3900 V6.  Although you likely had to order one, I’ve seen a few 3.9s in LT models if you search autotrader, carmax, or eBay motors really hard.  What I love is that you get the dual exhaust without the spoiler when ordering an LT 3900 (unless the dealer tacks one on.) Its makes the car more fun to drive while still staying anonymous.

    • 0 avatar
      ajla

      I’m not an Impala expert, but was it possible to get the 3900 on the more basic “1LT”?  I thought it required at least the “2LT” level.  And it was rare, the only LT 3900 I’ve ever seen at a dealer was a “3LT” and stickered only a few hundred under a LTZ.
      ____________________
      Looking back at my post, it seem like what I really want is a “police cruiser” style equipment/engine package available for civilian purchase.

    • 0 avatar
      Educator(of teachers)Dan

      Looking back at my post, it seem like what I really want is a “police cruiser” style equipment/engine package available for civilian purchase.
       
      Which as late as 25 years ago just about any of the big 3 would have given you if you knew what options boxes to check.  And yes I do love the idea of stripped down car, biggest engine available.  But you have pointed out the insanity of GM.  Why have 1LT, 2LT, and 3LT?  Oh don’t forget that there’s the LS package and the “base” Impala with no extra letter badges for fleet use.

  • avatar
    Dave M.

    Back in the good old days Honda led with the simplest configurations for the Civic and Accord…
    base
    DX
    LX
    EX
    Now there’s something like 12 different Accord sedans…..

  • avatar
    phantomwolf

    Something tells me that this is a very meaningful article on a whole series of levels.  Suffering in retail, fortunately as technical support and not a parasite, I have a unique view here.  Being in the Cellphone industry, the only segement the youth seem to care about anymore since cars are appliances, it is important to know why that is.  Young people still joke about “souless,” many asian imports are, but buy them out of their utility.  They would love BTO, if they had the choice and it was on things that had meaning to them.  Given the Nazi state we americans endure currently, when we drive, horse power only appeals to a few now.  Mostly now it is what the interior is like and colors.  My co-workers and customers often times don’t seem to be to overly interested in their engines anymore, and standard, what standard, everybody drives automatic now.  A more cost effective form of BTO  would be a boon for the domestic manufacturer who bases production on what people care to personalize.  You cannot please everyone with everything but you can at least take care of the more important things.
    The next thing would be asking, what do people want?”  Well, my generation, and the ones just getting the licenses right behind us, are looking at diffrent things than our parents or grandparents.  We care about, interior, sound, gagets, and roominess.  Color of the car if practical.  These are not the most desperately expensive bits for the manufacture to customize, and yet these are things that my generation seem to care about most.  Having read many a car manual trying to pair customer’s phones to their car’s bluetooth, I have come to the conclusion that at most the manufactures only offer two or three sound options with one of them being navigation.  I am sure that the tech savvy youthful crowd that is the future new car buyer deserves more options than that.
     

    • 0 avatar
      SimonAlberta

      Just a comment on your first sentence. You do realize that without the “parasites” selling stuff there wouldn’t be any need for any technical support persons? Methinks the term parasite could apply just as aptly to anyone in a non-sales position.
       
      Just an idea, no need to get huffy.

  • avatar
    Dave M.

    Given the Nazi state we americans endure currently, when we drive, horse power only appeals to a few now.
     
    Not sure what you mean by your comment, but I have to disagree with the America = Nazi state.  I just cruised this afternoon from Dallas to Houston at 75-80 miles an hour, beautiful rolling scenery, respectful traffic, all for about $35 in gas for my truck.  While the stoplight and speed cameras encroach slowly in our world (note: no speed cameras I know of in Texas; Houston just tossed their stoplight cameras out, although I like the safety concept of stoplight cameras – Texans aren’t a bunch to have it shoved down their throats… ), our motoring freedoms are pretty remarkable compared to most other places in the world.

    • 0 avatar

      Dave, you live in Texas.  You don’t count… you still live in America.  The rest of us have been sucked into the mire of Obama-Union Socialism. California has taken billions of taxpayer dollars and given it to the largest percentage of welfare cases of any state in the nation, illegal alien benefits, and million dollar teacher’s union salaries. To continue feeding the machine, they’ve doubled / tripled CHP revenue generation activities, and they are out in force writing a tickets to anyone going 66 MPH, blowing a 0.01 BAC, or who look like they won’t stick up for their rights in court (college students).

    • 0 avatar
      Advance_92

      For God’s sake give the rhetoric a rest.  In your scary boogeyman’s back yard, Chicago, traffic on the highways moves at 70 and above outside of rush hour.  Rural Illinois interstates have some irritating overpass laser traps, but I don’t think those areas vote Democratic.

      I lucked out finding the car I wanted on a lot, but if I had to buy a new car BPO would be great since manual transmissions seem to be disappearing faster than before. That said I’m still looking for a Volvo 240 so I can survive the zombie apocalypse of rolling jellybeans with no windows that seem to be the current trend.

  • avatar
    rocketrodeo

    Moving away from BTO is a consumer and dealer behavior, not a manufacturer behavior, at least as far as the Detroit 3 go.  For at least one major mfr here (that is doing quite well these days, thank you), EVERY car is BTO. Whether that car was ordered in a batch of a dozen or two for dealer stock (by dealers who have a very intimate understanding of which combinations of colors and options sell well, thus the rapid-spec options) or as a customer-generated order (the online configurators are very good at showing what the possibilities are these days), the thing that they all have in common is that they’re all custom orders. That means that as far as the mfr is concerned, every car that rolls off the line is sold.  They don’t play the channel-stuffing games that one crosstown rival did, filling unused stadium and airport parking lots with sales bank cars built simply to keep the assembly lines moving. Those cars would get shoved down dealers’ throats at the end of every quarter, to end up retailed at wholesale rates or dumped in fleets. It’s no wonder resale was so terrible for them. Nobody wanted them, dealers or customers.
     
    My parents bought custom-optioned cars from all of the Detroit Three (Chrysler, Plymouth, Dodge, Buick, Chevrolet, Ford) for four decades. The last two GM cars had fit and finish issues that caused them to be rejected on delivery (and later, once those initial quality issues were resolved, serious reliability problems), which for many became a serious drawback to the custom-order concept by the early 1980s with regard to Detroit iron. Then they started buying Hondas and Acuras, which had extremely attenuated option lists but simply outstanding reliability.  I don’t think they minded the tradeoff.
     
    It should be said, too, that consumer-driven BTO never went away with the most popular models sold here, especially trucks. Bertel, take a trip over to the configurator for the F150, which at least on this continent has been the most frequently sold automobile for longer than many of the B&B have been alive. I count ten different submodels currently (XL, STX, XLT, FX2, FX4, Lariat, King Ranch, Limited, Harley-Davidson, SVT Raptor) with four different powertrains. There is a truly bewildering array of options available for custom order. BTO is alive and well.

  • avatar
    George B

    Bertel, I like the concept of BTO, but I also like lower prices made possible by equipment packages.  The obvious compromise would be to make the process of getting custom cosmetic features easier.  Others gave the example of beige interior with blue paint.  Here in Texas a black interior can be a deal breaker and gray leather looks like it came from a refinery instead of from a cow.  More choice of wheels would also be a nice win-win.  Customer gets to order something closer to what he wants and he doesn’t have to go through the step of selling the unwanted factory wheels on Craigslist.

  • avatar
    colognecapri

    My local Ford dealers are great about special ordering cars or locating one exactly how you want it. They even offer you price protection, so if the rebates increase or decrease after you order the car by the time you take delivery you don’t get screwed over compared to buying one off the lotl. Since I am a hardcore manual trans only type of guy, this works great for me. Examples: my 2002 Escort ZX2 (the 2002 S/R made me lust after a ZX2, and I ended up recreating 90% of one)…I special ordered it with manual trans, two tone leather seats (were actually really cool with dark grey edges, and perforated light grey insiners with “ZX2″ stiched into the top of the seat), power everything, moonroof. Several years later I almost ordered a V6 manual trans 07 Mustang, but they found one close to how I would have ordered it out of state, (black, grey leather, 17″ 5 spoke GT wheels with the 235/55-17 performance Pirellis, no dorky tape stripes, hood scoops, or rear spoiler. Kind of a poor mans Bulitt Mustang). Our 2003 F150 V6/manual work truck was located with the nice cloth seat/tilt wheel/cruise control/chrome bumpers, and the 3.55 limited slip axle. It’s was a cool feeling though when I special ordered the ZX2…fresh of the truck with your name on the window sticker and no “lot rot”.

  • avatar
    Lokki

    I could be wrong about this, but since dealerships in the US are independent businesses -  separate from the manufacturer, don’t the vehicles count as “Sold” for the manufacturer once they are transfered to the dealer?

    I know that they’re financed, but given that labor costs in the US are both high and essentially fixed regardless of the amount of cars produced, I think it makes the most economic sense for the manufacturer to run the line constantly with as few variations as possible.

    This allows (as someone said above) for constantly predictable production levels rather than the seasonal (etc) variances caused by BTO, and permits the reduced costs and reduced complexity of a Just-In-Time delivery system for parts. 

    Since the dealer bears the costs of the fleet that’s been produced, the work force can be smoothly scheduled, the parts inventory both reduced, and production simplified, it’s greatly to the big 3′s advantage. Additionally (as has also been stated above) land is cheap in the US and therefore storage of the built product cheap.

    The only reason I can think of for offering BTO is as a way to distinguish my product from my competitor’s.  In Europe, that’s a plus for the dealers.  In the US it used to be a way to distinguish  product in the days when you really only had the big 3 (ok 4) to choose from. THEN options are the differentiator that will sell product.

    Finally, there’s one other problem for most Americans with the BTO system – the value of the trade-in diminishes during the wait for delivery of the new car.

    So, for example, you make a deal  at the end of July  for the delivery of a 2010 car – and there’s a 90 day wait for delivery – you put 3000 miles on your car and it’s a model year “older”… 

    Suddenly the dealer wants to recalculate the deal to the buyer’s disadvantage.  

  • avatar
    geozinger

    Over the last 30 years, I’ve purchased 10 new cars, all of them off of the lot. I’ve never considered buying a BTO car, I’ve always managed to find one to suit me on the ground. Of course, I want to drive the car before I purchase it, so BTO isn’t an option for me. That said, I’ve had very good luck finding what I think suits me, including used cars.

    Or I’m incredibly easily amused, which may be true.

  • avatar
    MrBostn

    Nothing fits BTO like being able to purchase a car over the internet form the MFG.

    Imagine:

    Selecting the mfg, model, color, options, arrange some sort of money transfer and bam! car arrives outside your door in a week/month whatever.

    Now that is Taking care of business!

  • avatar
    sportyaccordy

    This will never work. 93% of Americans would rather forego customization to pocket the extra money and time that process would add. Seriously, nobody’s gonna pay an extra 7 grand to have custom seats & wheels on their Versa. The remaining 7 percent buy Ferraris, BMW Individuals, Astons, etc…

  • avatar
    xyzzy

    Others have reminded us that BTO wasn’t that rare in the US.  My family was a big BTO buyer in the 1970s when I was growing up, which netted us:
     
    1. A 1977 Ford E150 with no power steering because my dad forgot to check that box on the order form.  It was a serious burden to drive in parking lots
     
    2. A 1979 (I think) Chevy Citation that was a fleet special because my dad got tired of the multi-month wait for the one he ordered — it was several months late when he gave up and bought the one off the lot.  Who knows what they got for his when (if) it finally got in.
     
    My wife bought her first car, a first-gen Mazda RX-7 GSL-SE with all the options, brown with a brown cloth interior, for a steal because it had been ordered and the buyer balked when it arrived and it sat for months until she arrived to buy it.
     
    So in my family’s experience, BTO ain’t that great — for buyers or sellers.  In each case either an error made a car tough to drive, it took too long, or a dealer took a bath an BTO car that the buyer balked on.

  • avatar
    brandloyalty

    The Magna Steyr car factory in Austria makes different models for different manufacturers on the same assembly line.  No doubt there’s a cost downside to this, but it must make sense in some circumstances or they wouldn’t be able to continue doing it.  I don’t know how concurrently they make different models, but the video I saw appeared to have several models mixed.
    According to Wikipedia, they have assembled the BMW X3, Chrysler 300, Jeep Commander, Jeep Grand Cherokee, M-B G Class, Saab 9-3, Aston Martin Rapide.  I’ve seen video of them assembling the Peugeot 308 RC -Z.
    So production facilities can be very adaptable.

  • avatar
    rpn453

    I have a couple of friends who ordered their vehicles, and they’re probably quite unique because of it.  One is a blue 2004 Dodge 3500 non-dually quad-cab short-box Cummins with black leather, a manual transmission, and manual transfer case.  The other is a black 2011 S4 with a manual, upgraded black leather, and no drive-select or navigation.  The salesmen tried to push them into more loaded and discounted inventory vehicles, but it was still cheaper and better to special order them.  They were willing to wait a couple of months to get what they wanted without any undesirable options.
     
    When I bought my 2004 Mazda3, they had the color I wanted with a manual transmission in all the possible configurations: GS, GT, GT with leather, GT with sunroof, and GT with leather and sunroof.  So I bought it from inventory, a GT without leather or sunroof. I would not have compromised if they didn’t have what I wanted, but if they threw in the leather or sunroof for free I’d have taken it.

  • avatar
    wallstreet

    Hey folks, happy Thanksgiving ! I’m very thankful that I’m able to experience BTO first hand during this past summer.
    BTO is well and alive for BMW. I order my 2011 335d in mid May for pick up in Munich on July 8th (less than 2 months’ wait). It’s an amazing car with 425 lb/ft. BMW allows me to customized all bells & whistles. They even load up the European map on my idrive’s navigation system while traveling in Europe.
    I drop off the vehicle on July 21st in Vienna, and re-kindle with it on September 17th at BMW performance center in Greenville/Spartanburg, SC. BMW has even provide a special 800# for vehicle status update. The German plate is on the car when I pick-up on this side of the pond. I always wonder why BTO is not offered by more manufacturers. It is indeed the quickest way to build brand loyalty.
    For those who are interested, my European Delivery thread is located at bimmerfest.com/forums/showthread.php?t=470072

  • avatar
    Stingray

    Here in Venezuela, we don’t even have options. You buy the car the stealership has and that’s it. Each model has some color choices, but when the customer gets to the dealer, it’s the one in the showroom that it gets.

    Equipment? LOL, only what’s included from the factory. If they decide that a model doesn’t have power windows, you have to go aftermarket to get that.

    Still, the cars have big markups and high prices because of demand.

    I have configured some cars in some sites: A Challenger, a Commodore and a 9-3. It’s refreshing to see you can buy a car as you like it.

    If all the Lean, TPS and stuff of the world doesn’t allow a customer to order a car with the options he wants, I will be forced to call BS on the advances they represent. I think those production systems should in fact favor customization.


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