Ask Jack: Bundled to Death?

Jack Baruth
by Jack Baruth

Serious question: What kind of experience do you need in order to write credibly about the automobile? If you were to ask some of the autojourno Boomers, they might tell you that the minimum requirement would be the career path followed by my time-and-again boss, Larry Webster: engineering degree, followed immediately by a magazine employment history that starts at “road warrior” and ends at “E-I-C of the most solvent color rag in the business”.

Some people would say that my boon companion Sam Smith did it right: college degree, time as a professional BMW mechanic, many years as a self-funded club racer in concert with his experienced and mechanically knowledgeable father. I’d like to argue for my own path: mildly successful car salesman, F&I experience with multiple captive finance firms, ground-floor experience with automotive tech and production, eighteen years of motorsports with a sack full of wins and lap records.

Ah, but these are means and not ends. They are how and not why. They detail the pathway by which expertise is acquired but they are not expertise themselves. If you read everything that Larry and Sam and I have written, you would know a major percentage of the things we know, and then you would be free to go forth and apply that knowledge to future situations. All you would need at that point would be an ability to write.

You could get by with less. LJK Setright was frequently dead wrong but I’d rather read his mistakes than labor through Csaba Csere’s researched conclusions. Gordon Baxter was not a great pilot and he was a worse driver. As a teenager, I read the work of gunwriter Jeff Cooper until I knew much of it by heart; years later, a mutual friend confessed to me that Cooper was only just competent with a .45 caliber pistol.

This is what you cannot be and still succeed, not if there is any justice in this world or the next: ignorant and proud of it, stupid yet blase about it, stilted in prose but unwilling to fix it. Which brings us to this week’s question.

Matt asks,

As a car guy, I’m sure you’ve had plenty of opportunities to complain about car manufacturers that won’t sell you a car with the manual transmission AND the big engine. Or even though they might have a gorgeous paint color available and an interior color you dig, they won’t let you configure a car that includes both.

It’s been this way (at least somewhat) as long I can remember, but the trend has certainly been for fewer and fewer individual options and more constraints by trim level, or “convenience” packages. Of course, the 1 percent of us who are car people want things configured just so, but normal people don’t tend to care.

…or so I thought. Recently I’ve heard several non-car people complaining about the packages they’re forced to choose from. One friend wanted the built-in back seat sunshades on his Pilot… but was appalled that it would require a $6,000 upgrade from the trim level that otherwise fit his needs. I’ve heard friends make similar complaints when buying Toyotas and Subarus recently, too.

Have the automakers gone too far in their quest to simplify production, inventories, etc? Is it time for the pendulum to swing a little bit the other way again, and maybe let someone get the built-in sunshades without the 47-speaker stereo? Or is that just wishful thinking on my part?

This is a good question, acknowledging as it does the realities of life while still offering a rational amount of hope for a better future. I’m less impressed by a conversation that is currently worming its way through the fourth-tier blogger-journo automotive Twitterati; it could be most economically rephrased as “F the dealers lolz.”

There is a lot of wailing and gnashing of teeth about the collapsing event horizon of automotive configuration, and there is a lot of pseudo-violent rhetoric aimed at the “stealerships” that are preventing YOU, the automotive enthusiast, from getting the car YOU want. It doesn’t help that not a single name in said conversation has ever taken possession of a new car with an MSRP above that of, say, a Camry LE. Nor does it help than most of them have never owned a new car. You might as well listen to their complaints about private jets, because they would have the same approximate grounding in reality.

Here’s the reality of the situation, a reality that I’ve conveyed many times in the past: Dealers, not civilians, are the real customers of the automakers. They buy the cars and they assume the multi-million-dollar liabilities and they buy all the stupid $200,000 service computers and they spend millions on adhering to the automakers’ ridiculous architectural guidelines. They take the risk and they reap the reward. Right now it’s pretty hard to not earn seven figures with a major franchise, but I can easily remember a time when dealers went bankrupt in droves. They are not banks. They are not too big to fail. They do not use union labor. They will never be bailed out by a blue wave.

A surprising number of dealership principals and executives are, in fact, passionate about cars. What they are not is stupid about cars. You might be willing to spend your celibate nights wrenching on some 25-year-old German shitbox because your time has a net value of zero, but the man who has proven himself worthy of managing a $100M floorplan — there are most certainly women who have done so, but I’ve never met or heard of one — is not going to waste his money the way you waste your time. He wants inventory that turns quickly at a reasonable profit. Period, point blank. Anything that doesn’t meet the previous criterion is useless to him. If you had his job, you would also choose to spend $50,000 of floorplan on a slot for an Explorer that turns 10 times a year at a net profit of $3k each time over a slot for a Mustang that turns twice a year at a net profit of $1k each time. To do anything else is to toss $28,000 into a fireplace and burn it.

The more options an automaker offers, the slower the inventory turns. Don’t blame me for this. It’s the law of the jungle. Weird-color cars turn slow, stick-shift cars turn slow, but worse than that is the “bad order” that comes from making poor choices when selecting dealership inventory. I can still remember the day in 1995 that my sales manager dealer-traded for an Explorer XLT without a sunroof. We had something the other dealer needed and we were doing them a favor because they’d done us favors in the past. When the Explorer arrived, my general manager walked out and looked at it. Then he walked back in and said to the sales manager, “Bobby (at the other dealership) was an idiot for ordering a 945A with no hole in the roof, but you’re a fucking idiot for taking it off his hands.”

We had that truck on the lot for half a year at a time when about half of our Explorers sold the week they rolled off the hauler. There was a real cost to that; our dealership had two small asphalt lots and every space was full.

So with that in mind, let’s get back to our question: Is it time for the pendulum to swing a little bit the other way again, and maybe let someone get the built-in sunshades without the 47-speaker stereo? The answer has to be this: The pendulum will swing if, in said swinging, it reduces the average time on lot of each unit. More correctly, it will swing if the dealers believe it will reduce that average time.

Earlier this week, my brother wrote a review of the Honda Pilot in which he discussed the absurdly low inventory time of said vehicle. As long as the Pilot stays hot, nothing’s gonna be done about that $6,000 mandatory upgrade for rear sunshades. If and when the Pilot cools off, then you’ll probably see Honda fuss with the model mixes a bit. They’ll do that by asking the dealers which units are stalling on lots and which are flying off. If the $6k upgrade units are stalling, they will unbundle the options a bit, or simply take some of them off the table.

An example of this, according to a conversation I had a while ago with an industry insider, would be the F-150 Platinum and F-150 King Ranch. Once upon a time, these vehicles had different visual style and vastly different equipment loadouts. The Platinum never met sales expectations, so Ford talked to the dealers. It turns out that while Ford saw the Platinum as a major step up over the King Ranch, the dealers thought that they were just the same truck aimed at two different demographics: Platinum for City Mouse (really, Suburb Mouse) and KR for Country Mouse. Using that mindset, the Platinum was a bad choice because it “made” the customer take more equipment that he might not want. Which impacted order volumes. So Ford realigned the two trim levels to dealer expectations, giving them very similar equipment choices but vastly different aesthetics. In 2018, the King Ranch and Platinum trims are just a few grand apart, and they get closer in price as you add the packages. Platinum volume is supposedly much better now.

So there’s some reality for you. What about the fantasy — that idea that if people just had a chance to buy stick-shift stripper models of INSERT UR FAVORITE CARZ HERE, success would be assured? Well, I chalk that up to youth as much as stupidity. These young blogosaurs weren’t around back when you could get every model of Accord with ONLY a stick shift. And they weren’t around when Honda reluctantly added crappy automatics at the explicit request of the dealers. And they weren’t around to see the automatic volume grow every year like kudzu in the South. And they were probably still looking at manga when dealer order volume for stick shift Hondas fell under ten percent. So they didn’t see the gradual nature by which dealers responded to the demands of their customers and what that meant for order mixes.

Really, all of their griping boils down to the idea that they know better than the people who actually buy the things. Which reminds me of a Frank Herbert quote from God Emperor of Dune: “Scratch a conservative and you find someone who prefers the past over any future. Scratch a liberal and find a closet aristocrat.” We have a lot of closet aristocrats out there in the blogosphere. What we don’t have is a lot of decent writers; but then again, how is the ability to write any more relevant for the automotive future than the ability to operate a clutch? When your audience has less than no experience with anything, what does it matter if you have merely none?

[Image: Faris/ Flickr ( CC BY 2.0)]

Jack Baruth
Jack Baruth

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  • Cimarron typeR Cimarron typeR on Aug 29, 2018

    For the 1% enthusiast mentioned above who can't get what he wants from available trim/option packages, whats the point of even buying a new car? I've seen and katzkin interiors,they're pretty good. Want a lime green 330I, get it wrapped for a couple of grand. Want 30 speakers in your 2018 Accord sport 2.0t manual- all of the surviving car audio shops do quality work-otherwise they wouldn't have survived. With online searching you might as well just buy a 1 year old car with plenty of factory warrant and fly and drive or shipped to your driveway(actually you end up usually taking delivery in a large retail parking lost). I've never been burned yet (knock on wood)doing both.

  • PandaBear PandaBear on Aug 29, 2018

    Yes you can still ORDER anything you want, but you may not get it any cheaper than "un-bundle". My father in law got a Camry XSE hybrid WITHOUT A HOLE IN THE ROOF, because he never used one in his last Camry V6 XLE. He supposedly SAVE MONEY, but I am not sure if he did. I know for sure he got raped in the butt in the negotiation process and if he ever plan to sell or trade it within 10 years.

  • Geozinger Put in the veggie garden (Western Michigan, we still can get frost this late in the year) finished the remainder of the landscaping updates and hand washed both my beater Pontiac and the Town and Country! Going to the beach today...
  • Rochester I wouldn't obsess over the rate of change, it's happening whether we want it or not.
  • EBFlex At the summer property putting boats in the water, leveling boat lifts, cleaning the lots for summer, etc. Typical cabin stuff in the most beautiful place on the planet
  • Lou_BC I've I spent the past few days in what we refer to as "the lower mainland". I see Tesla's everywhere and virtually every other brand of EV. I was in downtown Vancouver along side a Rivian R1T. A Rivian R1S came off as side street and was following it. I saw one other R1S. 18% of new vehicles in BC are EV'S. It tends to match what I saw out my windshield. I only saw 2 fullsized pickups. One was a cool '91 3/4 ton regular cab. I ran across 2 Tacoma's. Not many Jeeps. There were plenty of Porches, Mercedes, and BMW's. I saw 2 Aston Martin DBX707's. It's been fun car watching other than the stress of driving in big city urban traffic. I'd rather dodge 146,000 pound 9 axle logging trucks on one lane roads.
  • IBx1 Never got the appeal of these; it looks like there was a Soviet mandate to create a car with two doors and a roof that could be configured in different ways.