Demand for niche vehicles is on the rise and brands are jumping on the wagon. By RICHARD BLACKBURN.
HenryFord famously once said buyers could order the Model T in any colour, as long as it was black. His theory was, if the assembly process was kept simple and uniform, the company could keep costs down, make cars more affordable, sell more of them and make bigger profits.
He was right. Ford's introduction of the assembly line made motoring accessible to the masses and made the Model T the world's most popular car.
Until then, cars had been prohibitively expensive items, handmade to order for the rich and famous.
But fast forward a century and some companies are heading back down the path of personalisation, developing niche vehicles that are more expensive to make, while appealing to smaller buyer groups.
In some cases, they are essentially answers to questions nobody asked. It appears a risky strategy on the surface but the idea of developing a car no one has specifically asked for would have resonated with Henry Ford.
He once — less famously — said that if he had asked people what they wanted before he built his first car, they would have said a better horse.
Although niche cars generally fly in the face of financial wisdom, some brands have enjoyed spectacular success — and profits — from developing quirky models from more established vehicle platforms.
Audi, which is about to launch its A5 Sportback, a five-door hatchback with a coupe-like profile, is one of the believers.
Board member Peter Schwarzenbauer says niche cars may be more expensive to develop but they serve a purpose.
"If you talk to our financial people they would say yes, it's getting too complex, but if you look out in the market I think the consumer is asking for different things," he says. "Consumers are asking for differentiation, individualisation. It's our job to create it. It's not the best thing for our production line but it's the best thing for our consumer."
Done properly, he says, niche vehicles can deliver more sales and, crucially, better profit margins.
Citroen spokesman Edward Rowe agrees. The company has just launched a new upmarket model line with a tiny city car, the DS3, which aims to capture
luxury-car buyers who are downsizing to avoid Europe's new tax regimes, which heavily punish larger cars.
"People want to downsize from larger luxury cars but they don't want to lose individual style, exclusivity, performance and features," Rowe says.
"That's why Citroen has created a whole new brand."
It's a theme repeated in the boardrooms of many of Europe's leading brands.
Audi will soon release a city car, the A1, to sit beneath the smallest car in its current range, the A3. BMW is planning a similar-sized competitor and even Aston Martin is toying with the idea of a city runabout.
Companies are also spinning more variants off a single car platform.
Citroen once had one version of its smallest car platform, the C3. It now has six: a budget city runabout, a mainstream hatch, a sports version, the luxury DS3, a convertible and a people-mover.
Mini, one of the great niche success stories, has now spawned spin-off products of its own.
Apart from the sportier Cooper S and John Cooper Works versions of the hatch, there is the Clubman — a slightly larger, three-door Mini — and the convertible. A four-wheel-drive model, dubbed the Crossman, is under development, while a two-door coupe and roadster are likely to see production soon.
Mass-market brands are also chasing new niches.
Nissan spun the Dualis, a more car-like soft-roader, off its X-Trail platform, while Suzuki and Volkswagen have sub-compact soft-roaders that sit between conventional hatches and compact 4WDs such as the Toyota RAV4 and Subaru Forester.
The Dualis, Suzuki's SX4 and the Volkswagen Tiguan are basically no more than high-riding hatches with a choice of front or all-wheel-drive. They carry scarcely more cargo than a hatchback but have a high “command” driving position and rugged looks courtesy of flared arches and chunky bumpers.
Kia, Renault, Peugeot and Citroen have created compact people-movers. These vehicles are not much longer than a conventional hatch but offer occasional seating for seven.
At the top end, luxury brands are challenging convention by offering the four-door coupe.
Traditionalists will argue that the word coupe, by nature, means a two-door but Mercedes turned that on its head with the sleek, low-roofed and successful CLS.
Mercedes rivals are tripping over themselves to enter a market they once scoffed at. Maserati already has its Quattroporte, Porsche has just released its Panamera, Aston Martin is readying the Rapide and Audi is developing the A7.
Audi and Volkswagen have introduced the A5 Sportback and the Passat CC, which are smaller variations on the CLS theme.
VW is also believed to be developing such a car based on the smaller Golf platform.
In the luxury off-road market, BMW is pushing the envelope with its X6, released last year, and its upcoming 5-Series GT.
BMW calls the X6 a "sports activity coupe". It's basically a sporty take on the traditional 4WD, while the upcoming 5-Series GT is a cross between a traditional wagon and a four-door coupe.
The X6 has had more than one motoring journalist scratching their head. It appears to have sacrificed function for form. While it is undeniably agile for such a large vehicle, it has only four seats and limited cargo space, prompting the question: is it a niche too far?
But BMW's Toni Andreevski says the success of the X6 is the ultimate answer to critics. He says it has attracted buyers who would not have considered a more conventional soft-roader, such as its X5.
"One of the objectives in chasing niche markets is to conquest," he says. "It's about trying to appeal to people who have never bought your product before."
He concedes there was a risk the car could have cannibalised X5 sales but argues that even if everyone who bought an X6 traded in an X5 to buy it, the company would still be ahead because of the price premium it charges for the X6.
Andreevski says niche products can turn profits for car companies. "Yes it adds more complexity and potentially more development cost. But at some point, if it sells a certain number, the benefit to the company outweighs the cost," he says.
"It's simply catering to customer demand and giving customers what they want.”
But Andreevski admits there are more risks associated with niche products than high-volume ones.
"It's a process of trial and error, of course," he says. "Not everything works but if you don't try, you'll never find out. Without risk you don't come up with something that's new and innovative."
Drive looks at some of the niche hits and flops and gives a layman's guide to some of the current trailblazers on the market.
For more on this story go to drive.com.au/niche
Have your say: What gaps in the market are crying out to be filled by car companies? Go to drive.com.au/blogs
HITS
SUBARU IMPREZA WRX
The pocket rocket launched in 1994 with boy-racer looks, the brand's
now-trademark boxer engine and
all-wheel-drive. It gained infamy when it became the choice of ram-raiders but has since grown to be a cult car with a fiercely loyal following.
TOYOTA PRIUS
Launched in 1999 with odd looks and a price tag most thought doomed it to failure. Initially a “press opportunity” car bought by councils who wanted to spruik green credentials, it became a darling of the Hollywood jet set and a must-have for early adopters.
MINI COOPER
The modern-day take on a cult hero is expensive, has a tiny boot and no rear legroom but people are still lining up to buy it. A unique blend of designer looks, individuality and go-kart handling is the key to the car's success. Competitors Citroen and Alfa are now looking to jump on the wagon.
MERCEDES-BENZ CLS
Some thought it looked as if Mercedes had left the clay model for the CLS out in the sun. A low roofline, four seats and some of the most brutal V8s ever built combined to make this an unlikely hit and sent the competition, including Audi and Porsche, rushing to the drawing board.
MISSES
FPV F6X
It seemed a good idea at the time. Take the Ford Territory and stick a 270kW turbocharged firecracker under the bonnet. Its first hurdle came when the price of petrol skyrocketed. The next hurdle was not many people were prepared to pay $75,000 for it.
CHRYSLER PT CRUISER
An attempt to cash in on the success of retro design. Unfortunately, it had retro build quality and dynamics as well. At the time of its launch, Chrysler said the PT Cruiser "broke the barriers of conventional automotive design and function". It didn't.
MERCEDES R-CLASS
An upmarket people-mover with a starting price of $80,000. Its main differentiating feature appears to be it has one less seat than most people-movers. At its launch, the blurb said the R-Class pioneered a "highly promising 'Sports Tourer' market segment". Just nine were sold in July.
SKODA ROOMSTER
The Skoda is unlike any other car. It straddles the small and medium-car segments, has a roomy cabin, good handling and frugal engine. At launch, Skoda said the Roomster "defines a completely new market segment". A very small segment: so far this year, 36 Roomsters have found homes.
Source: The Age
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