The average Toyota Camry likely sells for somewhere in the neighborhood of $25,000.
What if you could buy a more durable version of that Camry for, say, $33k…. and get a bumper to bumper lifetime guarantee?
Sounds crazy doesn’t it? After all, precious few of us would ever want to have a 25+ year old daily driver given all of the advances that have come since the days of Roger Smith and Lee Iacocca.
But what about the non-enthusiast?
Those wise souls who spend their lives in the pursuit of other interests. To most of them, a car is little more than a modern day Lay-Z-Boy and errand runner on wheels. Reliability is king. Convenience is queen. As for sport, it rarely amounts to jack in the real world of low speed limits and forever boring commutes.
A lot of folks are looking for that long-term security these days. To own a house forever. Keep a car forever. Many of our neighbors with automotive apathy desire little more than safe, solid, reliable transportation. With perhaps the option of a factory upgrade or two somewhere down the line.
It may be that a premium car with a premium guarantee would be the perfect fit for their needs.
For most manufacturers, it’s also never been easier to build a car that can endure for the long run. Even the lower rung of automakers have the technology and means to make reliability a given. Give or take a few recalls here and there.
As for profit, feel free to tell me. Who is more capable of gathering the long-term returns? A manufacturer who plans for the demise of a machine somewhere between years 12 and 15? Or one that can make that year 12 car drive like it is nearly brand new, and gets that customer back in the door for regular maintenance with spouse, children and friends in tow.
That extra profit up front and long-term commitment can make all the difference. A $7000 net profit push in North America can be immediately invested in the products for the emerging markets of the here and now. The manufacturer eliminates competition for that customer as well, receives a far higher profit than before, and the apathetic owner gets to solve another financial uncertainty.
I’m not too sure if a Suzuki or a Land Rover could make this work. But how about a successful manufacturer? Could, let’s say, a Toyota get ahead in the long run if they got an extra $10,000 worth of profit up front and spent only $3000 or so extra on parts and service?
This is a question for the ages that likely traces all the way back to the first marketers of tractors way back in the 1910′s. The mule of the time versus the eternal machine of tomorrow. How do you get these folks to invest in a high cost product for the long haul, and keep them?
A century later, this idea of permanence may resonate with a larger segment of the buying public than we realize. So, should certain manufacturers develop cars that are engineered and guaranteed for those seeking that long-term guarantee? If so, what price premium do you think those non-enthusiasts would be willing to pay for such a bedrock of automotive freedom?