Frustrated with the current retailing process and being unable to get the features they want on a car, U.S. consumers are intrigued with the idea of a build-to-order model when purchasing an automobile, according to Gartner Group, Inc. A recent Gartner survey of 883 new-vehicle buyers found that 83 percent of those consumers surveyed would prefer test driving a demo-vehicle, but ordering the actual car from a manufacturer if that would mean they would pay a lower price for the vehicle. To get their vehicle with the correct options, 74 percent of the consumers would rather wait and order the vehicle instead of buying one from the dealer's lot that is incorrectly equipped. 62 percent of the respondents are willing to order the car to get it in their preferred colors. However, the majority of consumers expressed to only be willing to wait up to three weeks to receive their vehicle once an order is submitted. "The consumers' preference to get the exact vehicle they want in a relatively short time will have a direct impact on the automakers' production and distribution strategies and will represent a challenge especially for foreign automakers that face longer delivery times due to importing most of their vehicles into the U.S.," said Thilo Koslowski, senior analyst in Gartner's e-Business Services group with responsibility for the automotive vertical market. "To address these challenges, the industry will have to simplify the vehicle-configuration process by combining separate options into packages. Furthermore, automakers will need to establish distribution centers with adequate supplies of base-vehicles that can be customized in a timely fashion to meet the customers specific orders." There has been a lot of discussion about supply chain issues when implementing a build-to-order initiative, but Gartner analysts said it's important to also examine the processes that need to change in the retail segment. "In order to address the needs of a consumer in a build-to-order scenario, the traditional dealerships would have to transform into a consumer-centric operation by replacing today's sales-driven compensations system with a customer-satisfaction-based rewarding method," Koslowski said. "Dealerships and manufacturers should invest cost savings from reduced vehicle inventories into new retailing processes that will steer the consumer's interest away from pricing considerations and point it toward other value propositions such as emotional aspects to create a unique buying experience for the customer." With a build-to-order model, the traditional auto dealership could become an extension of the automaker's brand values. For example, a luxury car dealership could use exclusive furniture and lighting to create a lavish ambience for the consumer. Automakers that offer sport utility vehicles could add an off-road track behind the dealer's showroom to invite their customers to a test drive. The rows of cars on a dealer's lot could be replaced by a small fleet of demo vehicles that would allow consumers to preview and test automobiles as well as all available options. Dealerships could utilize new technologies that would support three-dimensional visualization of custom ordered vehicles such as large displays to show the customer how the finished vehicle will look. "Virtual showrooms" could be located in densely populated cities or at businesses that complement the automakers' image (for example, jewelry, designer boutique). "Dealers, manufacturers and third-party automotive Web sites could use standardized tools that would directly communicate with the manufacturer's supply chain management software via the Internet," Koslowski said. "The standardization of the ordering process would allow consumers to start, modify and finish the vehicle from multiple locations." About Gartner Gartner helps clients achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and brand reach IT professionals globally through Gartner Research, its research and advisory unit; Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and, at www.gartner.com. Gartner, founded in 1979 and headquartered in Stamford, Conn., achieved fiscal 2000 revenue of $859 million. Gartner's 4,600 associates, including 1,400 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's products and services, visit www.gartner.com.
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