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October 10, 2001

When More Options Are Standard, the Choices Boil Down

By JIM McCRAW

New York Times

October 10, 2001

There was a time, when the moving assembly line was young, that all cars were built pretty much the same way and all the customer could choose was the body style and the number of doors. Almost every item of optional equipment, from radios and heaters to rear-view mirrors and spare-tire covers, was arranged for and installed by the selling dealer.

In today's market, with as many as 17 million new cars and trucks sold each year, even small, inexpensive cars come with power steering, power brakes with anti- lock systems, power windows, power mirrors, power locks, automatic transmission and AM/FM/CD sound systems. The reason is simple: economies of scale mean it's easier and cheaper for factories in the United States, Japan, Korea and Europe to build them that way. And customer expectations of what is standard have risen to this level.

A number of carmakers, among them Ford and DaimlerChrysler, are devising ways to refine the option selections even further.

Ford recently announced changes in the way many of its 2002 models would be built and sold, with most car lines having more models, all built the same way, but with fewer options at generally lower prices.

"The objective is to minimize the number of orderable combinations, and get the right ones to the dealers and customers," said John Jelinek, a Ford marketing spokesman. For instance, he said, "On the Ford Focus, we went from over 9,000 orderable combinations last year to 152 for 2002.

" Mr. Jelinek said that last year about 40 percent of Ford's customers reported they were unable to find the car they wanted in dealer stocks or were forced to buy a car with items they didn't want to get the items they did want. The new system was offered on certain models last year, with positive consumer response. Now it will be expanded to the Taurus, Excursion, Escape, Crown Victoria, Thunderbird and Windstar, among others, making it easier to comparison shop on the Internet, Mr. Jelinek said.

The Chrysler Group has shocked the industry by lowering prices on most of its 2002 models while generally keeping its standard equipment lists intact. Price reductions vary from $450 on a Dodge Neon (now $12,204) to $1,200 on a Chrysler 300M (now $28,340) to $2,000 on a Jeep Grand Cherokee (now $25,425), averaging $200 across the board.

Chrysler also had Internet shoppers in mind. "We took a holistic look at all our vehicles in an attempt to get to `right' pricing, to get less dependence on incentives and to help the more than 60 percent of all automotive consumers who do research on the Internet before they buy," said Thomas R. Marinelli, an executive of Chrysler and Jeep Division Global Brand Center.

"We're trying to make it as easy as possible," he continued. "On the new Jeep Liberty, there are only two models, the Limited and the Sport, with four option packages on each model." The Liberty option list offers a convenience group (things like power windows, mirrors and door locks), an off-road group, a power convenience group and a security group on either model, in addition to 28 individual options, from a bigger engine to bigger tires, anti-lock brakes, air-conditioning, a six-CD changer and a sunroof.

The company also looked at what should be standard and what should be optional on each of its car and truck lines, to simplify the offerings and price classes, Mr. Marinelli said. He added that in 2000, the company created a Dodge Grand Caravan minivan and a Chrysler Town and Country minivan, called the EX, a well-equipped minivan priced for Internet shoppers at $26,500, with no incentives. This year, there will be an EC version for $16,995, and an EL long-wheelbase minivan for $24,300, both aimed at Internet shoppers, neither one eligible for incentives.

A notable exception to the trend toward simplicity in options is Toyota, which offers a large number of free- standing options in its various models. The popular Camry for 2002 offers anti-lock brakes, keyless entry, a six-CD changer, a navigation system, moonroof (also called a sunroof), aluminum wheels and heated seats as individual options, but Camry also offers nine different packages of options on the Camry alone.