EU Commission _ UK Automotive Study on the Pricing and Fitment of Optional Extras to Passenger Cars and Light Commercials
Final report
February – 2016
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Luxembourg: Publications Office of the European Union, 2016
ISBN 978-92-79-58256-1 doi:10.2834/235371
© European Union, 2016 Reproduction is authorised provided the source is acknowledged.
Contract Number: 340201/2015/716355/SER/CLIMA.C.2
A study into the fitment and pricing of optional extras onto new motor vehicles in the UK and their resale in the used market 17th February, 2016
ABSTRACT Analysis of the car and light commercial vehicle UK markets regarding the fitment and pricing of optional extras when new. Analysis by segments A, B, C, D, E, F, J, M, S, NI Class I, NI Class II, NI Class III and at three time points, November 2003, 2009 and 2015. Also including CAP HPI expert views of how the used market values options in the used market.
Requested by & Delivered to: Ian Hodgson CLIMA.C.2 [email protected] Transport and Ozone Unit Tel: (+32-2) 2986431 Climate Action Directorate General Fax: (+32-2) 2969554 European Commission
Office address: Postal address: Avenue de Beaulieu 24 Office BU-24 -1/19 B-1160 Brussels, Belgium B-1049 Brussels, Belgium http://ec.europa.eu/clima/policies/transport/index_en.htm
Produced by: CAP HPI Consulting Contact: CAP HPI Michaela Hill Capitol House Technology & Data Consultant Bond Court [email protected] Leeds Office: +44 (0) 113 222 2054 West Yorkshire, UK Mobile: +44 (0) 7739 304822 LS1 5EZ http://www.cap.co.uk/
Contents
Page.
Executive Summary 4
Report Sections -
1. New vehicle analysis of optional equipment availability
a) General trends in optional availability 6
b) Cost aggregation of options new over the data periods 9
2. Used vehicle market analysis of cost effective vehicle options 14
3. Consumer insight of purchasing a used vehicle with additional cost option 17 fitted when new
4. Effects of optional equipment on CO2 emissions 20
5. Manufacturer selection of optional equipment against competitors
a) Overview of why standard equipment levels improve over time 24
b) Specific Segment analysis for passenger cars and light commercial vehicle 28
c) Fleet market analysis 36
d) Actions taken by manufacturers to ensure competitiveness 38
6. Appendix
i) Mean Cost Option Analysis: Cars by Segment 41 - Segment coverage A/B, C, D, E, F, J, M, S.
ii) Mean Cost Option Analysis: Commercial Vehicles by Segment 60 - Segment coverage N1: Class I, II and III
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Figures and Table Contents
Figures Page
Figure 1 Feature Adoption Profile Across Segments 6
Figure 2 Air Conditioning Feature Evolution 7
Figure 3 Variation in Commercial User Requirements 35
Table Page
Table 1 Options Average Price Movement Summary by Generic Category: Cars 9
Table 2 Options Average Price Movements: N1 segment 10
Table 3 Passenger Cars Options Average Price by Generic Category 11
Table 4 LCV Options Average Price by Generic Category (mean average price) 13
Table 5 Key Options Average Price and Retained Value Percentages (Cars) 14
Table 6 Option Pack Residual Value Performance – MINI 15
Table 7 Option Pack Residual Value Performance – Honda CR-V 15
Table 8 Option Pack Residual Value Performance – Hyundai Tucson 15
Table 9 Key Options Average Price and Retained Value Percentages (LCVs) 16
Table 10 CAP HPI Black Book Editorial Commentary by Segment 18
Table 11 CAP HPI View of the Effects of Optional Equipment on CO2 Emissions - Cars 21
Table 12 CAP HPI View of the Effects of Optional Equipment on CO2 Emissions - LCV 23
Table 13 Historic Feature Development of Rear Parking Sensors and Rear View Camera 24
Table 14 Historic Feature Development of Daytime Running Lights and Active City Stop 25
Table 15 Historic Feature Development of Alloy Wheel (incl. Size) and Bluetooth 26 Connectivity
Table 16 Historic Feature Development of Air Conditioning 26
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Table Continue…. Page
Table 17 Historic Feature Development of Puncture Repair Solutions 27
Table 18 Historic Feature Development of Sunroofs 27
Table 19 B-segment Specification Line-Up Fiesta vs MINI 29
Table 20 Historic Feature Development of Headlight Technology 30
Table 21 Historic Feature Development of Electric Door Mirrors and Headlight 30 Washers – LCVs Table 22 N1 class I Specification line-up- Fiesta van vs Corsavan 31
Table 23 Ford Transit LX pack specification line-up 33
Table 24 Tyre Options Ford Transit vs Mercedes Sprinter 34
Table 25 N1 segment Historic Development of Alloy wheel Size Variations 34
Table 26 CAP HPI View of Manufacturer Activity by Sector and Market 38
Table 27 Models Reviewed by Segment 40
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Executive Summary
1) New Vehicle analysis of optional equipment availability
Features typically start as an option in the F-segment with the premium brands and then go on to become standard fitment. They are then “backfilled” with new optional features. This trend filters down through the segment hierarchy, both when optional and standard. Key reasons for the trend for increased specification: o Competition between manufacturers to make their products stand out o Existing customer retention and attracting new customers o Reducing costs of newly developed technology o Maintain margins for both manufacturers and dealer networks LCVs do not exhibit this hierarchy: as the focus is on practicality, manufacturers compete by offering a wider range of body types, rather than options and standard features. In passenger cars and LCVs, exceptions to this are driven by either legislation or technology. The passenger car segments J (SUV), M (MPV) and S (sports) behave differently. J-Segment is very broad and also divides across utilitarian and lifestyle lines. M-segment is more focused on practicality. S-segment is more about the driving experience, is dividing along the lines of true sports cars and more luxurious, comfortable cars.
2) Used vehicle market analysis of cost effective vehicle options 1) In the used market, options often hold very little value. Analysis of options pricing is complicated by to the vast array of permeations across the many brands, models and over time. By using CAP HPI’s generic options structure, a trend of increasing prices emerges over the 12 years studied, but at a rate below that of UK inflation. Options themselves have also generally become more sophisticated over the same period. Most options retain little value in the used market. The key ones that do retain value, and that thus could be deemed “cost effective”, are the ones that are visible and interactive: o Navigation systems o Parking aids o Panoramic roofs o Air conditioning (including climate control) o Leather interior trim Options packs are used by manufacturers to simplify the buying process and encourage sales, but often perform poorly in the used market as many of the features packaged have little customer appeal. LCV options selection is focused much more on practicality e.g. ply lining to protect bodywork. Safety features on LCVs are becoming more evident driven by health & safety considerations. The 4x4 LCV market has split between utilitarian (commercial buyers) and lifestyle choice vehicles (private buyers).
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3) Consumer insight of purchasing a used vehicle with additional cost options fitted when new
The key difference is the buying process in the used market: the customer does not choose what to add but has a choice of vehicles in the market where specification is already set. Additional specification can to the value of vehicle, but more often influences the choice between vehicles without impacting the price the customer is willing to pay. The options that the typical used customer is willing to pay for are visual and / or interactive. Greater personalisation of new product via options is adding complexity and becoming a challenge for motor traders to value in the used market.
4) Effects of optional equipment on CO2 emissions 2) Few options improve CO2 performance, as 3)most add weight or increase the current draw on the electrical systems.
Features that do reduce CO2 are standardised very quickly in order to meet environmental targets and to reduce taxation costs, particularly for company car drivers.
The private car market focused more on fuel efficiency than CO2.
The UK taxation system has made company car drivers particularly sensitive to CO2 output.
High CO2 figures are a considerable competitive disadvantage in a sizeable UK market.
LCVs are less focused on CO2, concerned more with practicality and total cost of ownership.
Changing technology is challenging some existing views of how options impact CO2 e.g. newer
dual clutch automatic transmissions improving CO2 output over manual transmissions, new
“intelligent” electrical systems reducing CO2 by management of the whole electrical system.
5) Manufacturer selection of optional equipment against competitors 4) Specification improves over time as features5) fil ter down through the segment hierarchy, the drivers for which include: o Competition between brands o Customers who have become used to ever increasing specifications in new models o Legal & environmental requirements o Using specification to support brand image o Reducing cost of new technology and back filling standardised options with new ones. Manufacturers with a presence in all the segments F through to A have a competitive advantage. Some of those that do not have formed alliances to overcome the issue. Manufacturers differentiate themselves (via product or the buying process) by taking different approaches to specification: offering a vast array options or virtually none; offering a list of individual options or packing multiple items together, typically along a common theme. When purchasing a vehicle, different customers are influenced by a variety of factors: o Private users: size & functionality; branding; price; specification; fuel efficiency
o Commercial (company cars): style; specification; brand; tax (CO2); fuel efficiency o Commercial (LCV’s): practicality; total cost of ownership; safety (more recently) o Commercial (rental): maximising residual values; attractive specification & brands Manufacturers compete on many different fronts including: infrastructure; discounts;
financing; CO2 (impact on taxation); specification; fleet focus; brand strength; warranty.
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1) New Vehicle analysis of optional equipment availability
1a) General trends in option availability
The extraction of manufacturer’s optional equipment availability on new vehicles over the time periods 2003, 2009 and 2015 has led CAP HPI Consulting to the conclusions shown in this report. They have been reached by comparing option availability on two vehicles per segment, a total of 22 vehicles over 11 segments in accordance to the time periods requested. Vehicle models were selected using SMMT (Society of Motor Manufacturers and Traders) sales volumes, the best-selling models were chosen and then narrowed down to the superior performing derivative within that range.
Premium manufacturers drive the specification for the mainstream brands
The general trend in passenger car options availability is for a feature to appear first in the more expensive luxury segment (F-segment) and then for the availability to filter down through the segment hierarchy over a period of time (Figure 1). As the market evolves, many of these features become standardised, following a similar trend of starting in the F-segment and filtering down through the hierarchy (Figure 1). This is driven by a combination of manufacturer and customer behaviour. Some manufacturers, particularly new brands entering the market, do deliberately disrupt this trend by introducing new, highly specified cars into the lower segments. Specification in these cases is used to compensate for either poor brand awareness or reputation.
Feature Adoption Profile Across Segments Figure 1
F Segment
E Segment
D Segment
C Segment
B Segment Vehicle Segment Vehicle A Segment Time Option Standard
Manufacturer Behaviour
In order to maximise revenue to cover both the additional unit costs of a feature as well as the design and development costs, manufacturers typically start by charging a higher cost in the F-segment first. This segment stands this higher price through a combination of the early adopters willingness to pay and the option price relative to the retail price of the vehicle overall. As the feature becomes more widely available through the segment hierarchy, the retail price tends to reduce. This is due to a combination of factors:
Feature no longer seen as “new” by early adopters and thus losing its premium Reduced unit costs through supply chain improvements Price relative to retail price in lower priced segments Changing customer expectations of specification within each segment
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Customer Demand
Customer demand for new features in vehicles is primarily a function of the competitive nature of the car market in the UK, where there are a large number of manufacturers selling fundamentally similar products across a number of segments. Whilst brand, design and reputation are all factors in consumer choice, manufacturers use equipment levels and technological innovation to attract new and retain existing customers, as well as to target specific demographic groups.
This has two effects: as one manufacturers adds new technology as an option, or makes it a standard feature, its peers will be obliged to play ‘catch-up’; other non-peer brands will add these features in order to position themselves against these brands and to offer a value-for-money proposition to buyers. The impact of consumer demand for these technologies is limited. Whilst manufacturers will use market analysis tools to gauge the likely popularity of new technologies (and the consumers’ willingness to pay for them) this process is better characterised as manufacturers “pushing” new features into the market rather than consumers exerting “pull”. For example, manufacturers are currently promoting Connectivity features in the hope of attracting a certain demographic (the technology-focused ‘online generation’) despite evidence that this group is less interested in cars than other groups, and that their economic position means that they are often unable to afford the technology at current prices.
Feature Evolution
When a feature is standardised, the manufacturer typically “backfills” with new options. This is in order to maintain the options revenue for both the manufacturer and dealer network, to continue to offer customer choice, and also to remain competitive against other brands. For some, the feature itself can be upgraded e.g. air conditioning has evolved from a manual system on to automatic climate control, to dual zone and currently to 4 zone climate on some vehicles (Figure 2).
Other segments
It should be noted that 3 segments have not thus far been mentioned:
J-Segment (SUVs): This represents a complete product range in its own right, ranging from the Dacia Duster 1.6 16v Access (UK retail price £9,295) through to the Range Rover Estate 5.0 V8 Autobiography LWB (UK retail price of £163,445) and follows the same trends as already outlined within the segment itself. The segment has also undergone some significant changes as it was previously focused on functionality (like the M-Segment) but has evolved to now be more focused on lifestyle and therefore behave more like a traditional car segment.
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M-Segment (MPV’s): For customers in this segment, the primary concern is a level of practicality (the need to seat 7 people, load carrying capability etc.) and thus are less influenced by what may be seen as unnecessary items e.g. leather seats. As a result, feature adoption tends to lag a little behind other segments at a similar price point.
S-Segment (Sports): These are typically 2 door vehicles with 2 seat or 2+2 seat configuration. Again, customer requirements in this segment differ from the mainstream segments. Performance, handling and driver involvement are more significant and can often be at the expense of additional features. Recently, this sector has started to see two distinct sets of behaviours, one focusing more on the more “luxurious” side of the market, sometimes referred to as “GT”, (e.g. Audi A5 Coupe) and the other remaining focused on the more traditional sports car concept (e.g. Lotus Elise where the lack of feature becomes part of its appeal, with Lotus describing the interior as “Focused minimalism”).
Used Market
From a financial point of view in the used market, whilst some options do hold a value (see Section 2), many options do not and the cost when new is completely lost over a typical 36 months / 60,000 miles ownership period. Also, a distinction should be made that whilst some options do not hold any value, they can make the vehicle easier to sell and therefore will be favoured over a vehicle without them by the trade.
Some options, particularly those that include technology, can often be obsolete by the time the car arrives in the used market, for example at 3 years of age. For example, the CD player is starting to be removed from some standard specifications.
Finally, the used market tends to think in terms of a more simplified options list. For example, the used market values the optional extra of leather trim, however typically does not differentiate between differing standards of leather trim which may have had very different costs when the vehicle was new.
LCVs
The LCV sector has not experienced the steady cascade of additional features, either as options or as standard equipment, which has been experienced in the passenger car market. This has arisen due to the fact LCVs do not have a clear hierarchy similar to that of passenger cars. It is segmented by size of vehicle (in terms of weight, driving payload capacity) as the LCV customer is far more focused on the practical use of the vehicle. LCVs are mostly purchased as a “tool” to perform specific tasks.
As a result, specification is considered secondary to the practical application, driving manufacturers to compete by offering diverse body styles “off the shelf” to meet these varied requirements. These typically include a basic chassis cab and also panel vans, Luton box bodies, trippers, dropside, single cab, crew cab, minibus etc. The more specialised applications, e.g. cherry pickers, ambulance conversions, are offered as aftermarket conversions, sometimes with manufacturer approval.
The specification that has become standard has generally been driven by safety considerations (e.g. anti-lock braking systems, audio remote control) and legislation (e.g. air bags). Electric windows are one feature that may be described as “luxurious”, although it can be argued that even this adds to the safety and welfare of the driver. This is covered in more detail in section 5.
However, LCV options have followed the passenger car trend of steady evolution and become more sophisticated. This is not only the obvious area of technology (e.g. DAB radio), but also in practical applications, such as the options around the bulkheads which separate the crew and cargo areas.
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1b) Cost Aggregation
Passenger Car Options Pricing
Due to the huge complexity of the all of the differing options in terms of price and feature content, it would be impossible to do a detailed price comparison at a low level for every model and manufacturer. However, the CAP HPI data (taken directly from the manufacturers) is structured in such a way that a generic category (88 in total) can be attributed to every option, therefore making analysis at the three data points (2003, 2009 and 2015) possible.
Table 1 summarises the movements in price over the time period. On a mean average basis, there is little movement between 2003 and 2009, however this does mask that individual generic categories have moved. Between 2009 and 2015 there is an overall increase (14%) leading to overall increase between 2003 and 2015 of 18%. Over the 12 year period this is the UK inflation rate. The full break down for these price movements between the three time periods studied is displayed in Table 3.
Table 1. Options Average Price Movement Summary by Generic Category: Cars
2003 to 2009 2009 to 2015 2003 to 2015 Number of Ave Number of Ave Number of Ave Categories Price Categories Price Categories Price Increase 27 67% 49 47% 32 111% Decrease 50 (39%) 34 (32%) 46 (42%) No Change 11 0% 5 0% 10 0% Total 88 (1%) 88 14% 88 18%
Please note that over the 12 year period, the options within these generic categories have also devleopled. For example, a CD Radio often being replaced by a multi media interface including touch screen functionality. Thus CAP HPI Consulting would recommend that these numbers are best used to represent a trend rather than absolute values.
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LCV Options Pricing
Analysis of the N1 segment class I, class II and class III have identified a total 46 generic categories available across the N1 segment between 2003 and 2015. Packaged options are not included as each option is identified as an individual attribute and is grouped accordingly to the relevant generic category based on this attribute.
Aggregated cost analysis demonstrates that between 2003 and 2009, c.50% (23) of the option categories showed a price reduction compared to an increase in c.30% (16). The scale of the increases outweighed the decreases to leave a net position of a 1% increase. Between 2009 and 2015 there were more categories showing an increase (25), but of a smaller magnitude, leaving a net neutral position. Overall, the conclusion for the price movements over the period 2003 to 2015 is that there is no identifiable trend, with various increases and decreases. This has resulted in a net neutral position using the simple average list price over this period. This equates to a real terms reduction after taking into account inflation. This is in contrast to the passenger car segment.
Table 2. Options Average Price Movements: N1 segment
2003 to 2009 2009 to 2015 2003 to 2015 No of Ave. No of No of Ave. Price Ave. Price categories Price categories categories Increase 16 72% 25 40% 10 1% Decrease 23 (37%) 16 (33%) 21 (1%) No Change 7 0% 5 0% 15 0% Total 46 2% 46 2% 46 0%
There follows the detailed breakdown of the price movements by generic category across the three time periods studies for both passenger cars and LCVs (Table 3 and 4).
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Table 3. Passenger Car Options Average Price by Generic Category (mean average price)
Mean Option Cost ( £ GBP) Option Generic Category 23/11/2003 23/11/2009 23/11/2015 3x3 point rear seat belts 155.46 150.00 50.00 ABS 387.34 Air conditioning 816.28 517.72 473.96 Alarm 264.60 203.39 212.17 Alloy wheels 759.66 712.73 798.70 Audio remote control 599.33 341.16 289.26 Auxiliary input socket 831.24 809.97 Blind spot information 463.50 535.12 Bluetooth connection 609.70 448.56 408.05 Body coloured bumpers 311.44 630.67 463.88 Central locking 334.29 74.75 144.00 Climate control 638.36 511.95 448.18 Cloth seat trim 220.16 300.17 461.16 Collision avoidance braking 1,387.50 1,109.82 649.34 Cruise control 405.83 575.09 557.36 Curtain airbags 466.08 281.53 489.69 Digital radio 480.00 285.68 427.87 Drivers airbag 250.00 90.00 DVD 1,799.78 1,440.81 970.20 Electric door mirrors 555.08 275.10 280.42 Electric sunroof 722.24 777.53 916.66 Electrically adjustable drivers seat 1,205.30 873.92 976.40 Electrically adjustable passenger seat 1,324.02 866.76 888.08 ESP 535.98 371.70 Fixed panoramic glass roof 947.00 655.86 794.29 Folding rear seats 506.40 310.40 440.71 Front armrest 355.50 174.01 115.31 Front electric windows 187.83 176.72 510.00 Front fog lights 325.36 194.26 356.11 Front head restraints 927.22 119.83 479.87 Front parking sensor 462.63 486.99 502.60 Full size spare wheel 110.24 127.66 261.54 Headlight washers 549.01 593.22 591.14 Heated door mirrors 173.51 184.09 428.02 Heated front seat 1,034.98 823.46 862.48 Height adjustable drivers seat 1,184.05 770.98 1,051.25 Immobiliser 265.00 265.00 260.00 Internet connection 299.20 Isofix child seat anchor points 355.81 82.76 85.70 Lane departure warning 434.70 549.79 Leather seat trim 1,368.60 1,878.76 1,412.42 LED headlights 2,740.00 1,059.99 Lumbar support 768.56 602.27 791.78 Manual sunroof 325.84 378.33 985.00 Media storage 967.14 895.43 Metallic Paint 429.57 480.46 595.01
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Table 3. Passenger Car Options Average Price by Generic Category (Cont.)
Mean Option Cost ( £ GBP) Option Generic Category 23/11/2003 23/11/2009 23/11/2015 Mica Paint 331.93 433.73 558.49 Mobile phone App interface 318.68 Navigation system 1,824.08 1,377.46 765.16 Opening panoramic glass roof 1,066.68 874.90 950.87 Park assist camera 773.53 392.48 Partial leather seat trim 1,240.71 1,810.60 829.68 PAS 214.83 432.61 323.55 Passenger airbag 225.36 174.42 150.00 Pearlescent Paint 645.26 496.78 675.47 Radio/Cassette 802.97 617.33 Radio/CD 1,017.58 1,045.14 712.80 Radio/CD Multichanger 699.20 543.81 692.04 Radio/Minidisc 323.23 Rear airbags 318.18 272.74 362.04 Rear armrest 236.49 200.14 428.16 Rear electric windows 277.14 352.56 339.73 Rear headrests 423.27 75.92 84.24 Rear parking sensor 333.92 434.17 459.99 Rear wiper 250.00 197.91 209.00 Remote central locking 418.81 463.82 448.30 Reverse parking aid 450.23 463.13 388.34 Roof rails 190.60 192.71 240.65 Self parking system 630.56 536.90 Service 1,250.00 330.46 Side airbags 362.30 261.19 331.72 Solid Paint 661.47 1,643.54 1,743.46 Space saver spare wheel 53.92 86.34 113.86 Spare wheel 176.96 131.02 152.98 Special Paint 1,211.23 1,297.20 1,024.07 Sports seats 940.85 1,495.50 1,218.60 Steel wheels 216.17 117.37 309.43 Steering wheel mounted controls 271.26 482.33 224.28 Steering wheel rake adjustment 478.51 275.52 347.12 Steering wheel reach adjustment 659.06 234.93 347.12 Telephone 1,015.37 514.07 577.47 Traction control 525.66 504.57 733.00 Trip computer 1,164.25 766.70 190.93 TV 2,325.03 802.00 1,062.95 Tyre pressure monitor 252.35 177.41 177.16 Tyre repair kit 63.42 635.65 1,249.88 USB/iPod interface 413.79 486.20 Xenon headlights 675.40 739.81 792.69
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Table 4. LCV Options Average Price by Generic Category (mean average price)
Mean Option Cost (£) Option Generic Category 23/11/2003 23/11/2009 23/11/2015 ABS 612.55 1164.37 Air conditioning 962.77 944.54 972.27 Alarm 384.07 263.25 363.15 Alloy wheels 512.88 618.72 782.23 Audio remote control 937.30 436.05 636.31 Bulkhead 229.87 287.72 238.55 Cargo area lining 217.48 257.94 281.74 Central locking 299.64 74.75 267.30 Climate control 1661.13 1410.08 1140.05 Cloth seat trim 166.36 202.71 108.49 Deadlocks 293.75 195.60 118.93 Drivers airbag 503.70 449.73 553.83 Electric door mirrors 189.37 234.66 185.81 Front electric windows 230.06 579.44 392.97 Front fog lights 115.10 282.93 352.70 Glazed rear doors 176.83 218.59 256.22 Headlight washers 224.95 209.19 561.61 Heated door mirrors 161.22 312.89 191.29 Height adjustable drivers seat 422.76 282.37 318.37 Immobiliser 355.11 Lashing points 347.80 161.62 247.35 Leather seat trim 93.44 233.98 140.50 Metallic Paint 502.30 488.40 691.96 MP3 player 265.00 825.51 466.59 Navigation system 1633.41 1447.92 816.86 Part leather seat trim 195.26 PAS 420.00 Passenger airbag 554.84 361.39 376.01 Pearlescent Paint 690.79 597.43 570.35 Radio 305.50 434.09 Radio/Cassette 211.17 113.85 Radio/CD 831.90 944.58 457.96 Radio/CD Multichanger/MP3 380.37 320.20 Remote central locking 565.75 140.15 208.72 Roof rails 378.07 243.96 160.19 Service indicator 204.00 Side loading door - near side 307.52 517.49 598.55 Side loading door - off side 360.02 458.71 589.88 Solid Paint 484.31 374.45 542.50 Solid rear doors 446.63 309.92 313.52 Speed limiters 86.50 86.80 99.53 Steel wheels 115.23 149.10 Steering wheel rake adjustment 83.43 101.97 Steering wheel reach adjustment 83.43 101.97 Traction control 320.53 543.34 580.21 Vinyl seat trim 78.70 33.86 45.01 CAP HPI Ltd new vehicle data options are defined by a generic dictionary which contains defined categories. Radio/CD has x5 generic category levels due to key attributes of the cost options identifying a need to position the options separately to its key relations.
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2) Used vehicle market analysis of cost effective vehicle options
Used Values 6)
From the extensive list already shown, the most significant options in the used market in terms of retained residual values are:
Bluetooth connection USB/iPod Interface Xenon headlights Front parking Sensor Fixed Panoramic Glass Roof Air conditioning Navigation system Opening Panoramic Glass Roof Climate control Park Assist Camera Self-Parking System Leather seat trim Rear Parking Sensors DVD/TV Alloy wheels
From this data, Table 5 illustrates how these key options depreciate over the 3 time points of this study (12, 36 and 60 months), showing the value that is retained (features retaining more than 1/3 of their original cost are highlighted in green).
Table 5. Key Options Average Price and Retained Value Percentages (Cars) Average Average Retained Values New Price at 12 mths at 36 mths at 60 mths
Bluetooth connection £408 25% 18% - Front parking Sensor £503 27% 17% 6% Navigation system £765 55% 30% 14% Park Assist Camera £392 36% 22% 6% Rear Parking Sensor £460 34% 20% 5% Self Parking System £537 31% 15% 5% DVD £970 13% 9% 2% TV £1,063 2% 1% - USB/ipod Interface £486 21% 16% - Fixed Panoramic Glass Roof £794 47% 30% 16% Opening Panoramic Glass Roof £951 39% 25% 13% Xenon headlights £793 20% 12% 7% Air conditioning £474 47% 38% 22% Climate control £448 50% 40% 24% Leather seat trim £1,412 43% 30% 19% Alloy wheels £799 32% 19% 8%
The best performing options financially can be grouped into 5 categories as listed below. The common theme being that they are highly visible to the customer (new and used) and are items the driver interacts with.
1. Navigation 2. Parking aids 3. Panoramic sunroofs 4. Air conditioning 5. Leather trim
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Options Packs Options packs are created by manufacturers to offer an alternative way for a customer to choose options on a new vehicle. They can help a customer to buy options on a “theme” rather than individually, and may also offer the customer a small discount over purchasing them individually. It also helps a manufacturer increase overall options sales and to sell options that are perhaps less popular by packaging them with more popular features. Often the retained value of an option pack performs worse than the base car itself in the used market, as only the feature that used customers want attracts a value. Table 6 illustrates this with the 3 door MINI Cooper and the Media Pack XL, as there are few features that will maintain a value in the used market, resulting in a lower percentage of the new price being retained. Furthermore, upgrades to navigation systems typically have little impact as the used market as purchasers rarely differentiate between different grades of navigation, assuming equal screen sizes.
Table 6. Option Pack Residual Value Performance - MINI
Pack Contents: Bluetooth, brake assist added to cruise control, upgraded Navigation system, 3 spoke leather steering wheel, centre storage, multifunctional wheel, visual aids added to radio Brand Model Pack Price New Price 36/60 £ 36/60 % MINI Base - £15,430 £6,375 41.3% MINI 1.5 Cooper 3dr [Media Pack XL] £1,800 £17,230 £6,775 39.3%
A second example is shown in Table 7 where the DASP pack also does not add any value. The used price at 36 month / 60,000 miles is actually lower than the base car, although it is not possible to attribute this solely to the option pack as there are many other factors that can affect this models value e.g. level of supply. This is more common where a pack does not contain a significant desirable option. Thus a pack certainly does not guarantee a value uplift over a standard vehicle. This is currently often the case with safety equipment as a consumer already expects a newer vehicle to be safe.
Table 7. Option Pack Residual Value Performance – Honda CR-V Pack Contents: Forward Collision warning, Lane departure & blind spot systems, Traffic sign recognition Brand Model Pack Price New Price 36/60 £ 36/60 % Honda 2.0 i-VTEC EX 5dr - £30,035 £11,425 38.0% Honda 2.0 i-VTEC EX 5dr [DASP] £1,800 £30,299 £11,050 36.5%
A particularly well-designed options pack, aimed at specific part of the market, can add to the value of a used vehicle. These typically carry relatively few but carefully selected items targeted at a well understood customer and this is reflected in the improved residual values. These are commonly aimed at company car drivers and by using a recognised, fleet focused name (e.g. SE Nav, Business edition) they are quickly recognisable in the used market where buyers know what speciation to expect, such as satellite navigation and reflect this in the values. See Table 8.
Table 8. Option Pack Residual Value Performance – Hyundai Tucson
Pack Contents: Satellite Navigation system accompanied with minor trim detailing Brand Model New Price 36/60 36/60 Hyundai S £20,140 £8,550 42.45% Hyundai SE £21,940 £9,325 42.50% Hyundai SE Nav £22,740 £9,900 43.54% Hyundai Premium £24,990 £10,625 42.52%
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Mileage and Condition
Mileage and vehicle condition do not have a specific impact upon the valuation of options as it is covered in the depreciation of the vehicle as a whole. However, there is an underlying assumption in the used market that the option is in good working order.
Variation in the LCV market
The used LCV’s market often behaves differently to that of the used car market for similar features, largely due to the stronger focus on practicality. For example, an air conditioning system retains 18% more of its value in the used car market than the LCV market. This is partly due to the higher new price of the feature on LCV’s (average of £1,004 compared to £474). Navigation system retains only 12% in the 4x4 LCV market, compared to 30% in the car market.
Table 9. Key Options Average Price and Retained Value Percentages at 36 months / 60k miles (LCVs)
Small Medium Large Average Cost Luton Options CDV's Panel Panel Panel Tipper 4x4 Dropside New Price Box Van Van Van Air Conditioning £1,004 20% 20% 20% 20% 10% 10% 20% 10% Metallic Paint £687 44% 44% 44% 44% 44% 44% Side Loading Door N/side £623 40% Side Loading Door O/side £617 16% Satellite Navigation (VM O/E Fit) £833 12% 12% 12% 12% 12% 12% 12% 12% Tail-lift Omit Ply lining/loadliner £269 -112% -112% -112% -112% -186% -186% Hard top Leather trim* £839 89% Bulkhead £242 41% 41% 41% Electric pack (mirrors/windows) £290 26% 26% 26% 26% 26% 26% 26% 26% Towbar £300 33% Beacon/Lightbar Cruise Control £245 31% 31% 31% 31% 31% Central Locking + Plip £203 25% 25% 25% 25% 25% 25% 25% 25%
Sliding side doors on the small panel vans have a strong retained value on the near side (40%) rather than the offside (16%). The variation is due to the UK being right-hand drive, thus an offside door is less practical, opening onto road rather than the pavement. 270o opening rear doors are also proving desirable in the used market for both their ease of use and also safety considerations.
A lined load area, typically plywood, is an important addition to any used LCV, except for car derived vans (CDV’s). Any LCV without it will be worth measurably less as it reduces the amount of likely damage to the vehicle body, particularly outward dents which are costly to rectify. The feature is now generally standard with an option to delete (in Table 9).
Bulkheads which separate the cabin from the cargo area have one of the higher retained values due to practicality, allowing easier loading and are increasingly becoming standard in their simplest form with options focused on the material used (metal, wood, mesh) and openings (which can be glazed).
Leather trim holds little value in most of the used LCV market except for the 4x4 sector (mainly pick- up trucks) as these vehicles also find private as well as commercial customers. This broader market
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appeal drives leather trim to retain its value particularly well, at 89% of the £839 new price compared to a 30% in the used car market. In the 4x4 LCV segment we are starting to see a split in the market between the more utility focused vehicles, behaving like commercial vehicles, and the lifestyle focused vehicles which behave more like the car market.
3) Consumer insight of purchasing a used vehicle with additional cost options fitted when new As highlighted in Section 2, customers generally only7) value certain optional extras in the used vehicle market, the key ones shown in Table 5 and Table 9. This is largely due to the differing buying experience of new versus used vehicles. The used buyer is presented with the vehicle as it stands and compares it to other similar vehicles in the market at the time. They are likely to be less interested in many options fitted when new as they have not made the decision to add them. As already noted in Section 2, the primary options customers will pay for in the used market are those which the customer interacts with or those which assist with the practicality of use (LCVs). Other options, whilst not being valued, may help the customer choose between different vehicles on a forecourt or in private advertisements, but it is only one of a number of influences in the decision making process.
Research
Independent research carried out by CAP HPI via consumer focus groups supports the conclusion that customers are only willing to pay a premium for certain options in the used market. This research also supports the trend already identified that these are the options that they can see or interact with. An option that a customer cannot see (e.g. traction control) or have no interaction with (e.g. additional airbags) typically does not hold any value to the average customer.
CAP HPI Editorial commentary:
CAP HPI editorial commentary has been provided by CAP Black Book, and CAP Red Book following independent market research and analysis, providing insight and opinion into the cost options which are seen to be effective within the used vehicle market for each vehicle segment.
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Table 10. CAP HPI Editorial Commentary by Segment
Segment Commentary A-Segment The ‘young millennials’ generation of buyers have, without doubt, changed this sector. They want options such as Bluetooth and iPod/Connectivity to connect them to the social media space, the next generation will continue this evolution. The City Car sector is seeing an explosion of bespoke personalisation from the OEMs for the consumer, and options like leather, alloys, etc. are being replaced by colour packs, LED lighting, and more. This sector is predominately the cheapest to buy in the market and therefore has the weakest specification.
B-Segment Options such as parking assist, rear view camera and Xenon lights are increasing in desirability. As with many sectors, Bluetooth and general connectivity options are becoming incorporated as part of the standard specification, and used car values are starting to be impacted where not fitted. In a sector where bespoke personalisation is growing, MINI is increasingly focusing on simplifying their options offering by increased emphasis on predetermined packs.
C-Segment Options such as Bluetooth and connectivity are now expected as standard by consumers and thus where chargeable when new, hold very little value when used. In the used market additional options serve more to differentiate a vehicle from its competitors rather than holding an actual value. Options such as panoramic roofs, self-parking and other additional specification which are visually appealing all add value in the used market. The C-segment was one of the first segments to offer a fleet specification within the range line up, usually offering a specification also popular in the used market and reflected in stronger values.
D-Segment This sector is becoming ever more diverse, with the entry of the premium brands in the last decade helping drive increased customer expectation in terms of standard specification. Traditional options have now become standard and often replaced by safety options such as lane departure, traffic sign recognition and blind spot warning.
E and F Options are typically introduced in this segment first and filter down to the other Segments segments. These customers are typically the most demanding when it comes to specification. Features that consumers will pay for now as options are expected to be standard when they renew their car for the latest model. E-segment consumers tend to demand the specification offered in the F-segment and thus specification quickly filters down to the E-segment before any other segment, with innovative new technologies expected by the consumer.
M- Due to the intended use of these vehicles, options are mainly focused on comfort and Segment entertainment with assisted parking, navigation, and connectivity all desirable choices in the used market. Leather trim is a luxury that does not necessarily have any resale value in the used market.
J-Segment This is an increasingly diverse segment, as it consists of both vehicles specific for their functionality and also lifestyle vehicles. Options, such as panoramic roofs, alloy wheels and parking assist items lend themselves to both the vehicle's usage and size. However, in the premium segment, items such as leather trim, navigation and alloy wheels are becoming standard along with lower priced items such as Bluetooth and connectivity. Where SUVs do not have these options, residual values can be significantly reduced.
S-Segment These vehicles are rarely bought for utility or flexibility, but more as a lifestyle choice. Standard specification has improved greatly and option availability is now more focused on external visual upgrades and performance improvements. Leather, lighting upgrades (LED/Xenon), performance suspension and sports packs which add noticeable differences from the competition are all appealing to the used customer and this is reflected in resale values. Mainly seen as ‘drivers cars’ and may prove to not be impacted in the future by
options relating to autonomous driving.
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Alternative As these vehicles become more acceptable and the premium brands enter the market, Fuel consumer expectations will increase. Early adopters are purchasing to be “eco-friendly” and their appetite for added options is less than the mainstream market. The move to premium models now offers something where looks are just as important as functionality. Future developments towards fully autonomous and connected driving will likely create a demand for new options that give “drivers” something to focus on other than driving. LCV Brand is an important influencing factor within the commercial industry where there is a distinctive order to which the industry perceives certain brands and this takes precedent over options in the used market. The most important consideration is the application for purpose and, as a general rule, traders do not pay extra for options. However, once on the forecourt, traders will often use options as a unique selling point to differentiate their stock. Some cost options may attract a premium in the used market, although the used buyer is not always even fully aware of their presence e.g. additional safety features. Luton Box bodies fitted with tail lifts usually see a premium compared to those without, with age of the vehicle and condition being an important factor. LCV NI Options which can command a premium are air conditioning, driver aids, metallic paint, Class I and navigation. Fleets will look to apply metallic paint when purchasing new to differentiate their vehicles from competitors and to help residual values on disposal. LCV NI Air conditioning is a key option, as with the other sectors. For example the British Gas Class II VW Caddy fleet include air conditioning into their fleet deal and thus command a premium when entering the used market as the trade are aware of this. However, most big fleet buyers purchase new vehicles with very few options and focus more on surrounding products, such as warranty. For 4x4s, options that command a premium include load liners, covers for rear loading space and driver comforts. 4X4s within the commercial area are split into two distinct subsets. Firstly the “workhorse” for which Truckman style tops are key and secondly “lifestyle” which focus much more on image and behave much more like cars in terms of popular options in the used market. LCV NI For class 3 protecting the body from both internal and external damage is key. Vehicles Class III without ply lining tend to dent more and are costly to repair. Furthermore, metallic paint brings a premium above solid paint, although if a vehicle has had company signage removed before resale then the reverse can be true due to the way the paint has faded around the signage, and metallic paint is more costly to respray. Other key options which consumers have come to expect in the used market are navigation and bulkheads. Mercedes are seen to be leading the way in ABS and traction control which can both reduce tyre wear and improve safety. Body variants like tippers and dropsides are areas where options are not taken into account at all as they are focused even more on utility rather than comfort or style.
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4) Effects of optional equipment on CO2 emissions 8) CO2 impacts (car market) 9) The key element where options impact CO2 output is either where they add weight or draw electricity, which needs to be generated by the engine.
As can be seen in the analysis (Table 9), the majority of customer selected options either do not noticeably impact CO2 or increase it. This is largely due to governmental requirements placed on manufacturers to achieve ever lower CO2 performance. The UK government has linked the CO2 output to the running cost of a vehicle using Vehicle Excise Duty (VED), company car taxation and the taxation element of the cost of fuel. For VED and company car tax, the CO2 element of the calculations is set on a standard specification vehicle thus encouraging manufacturers to make the base car CO2 as low as economically feasible.
It is possible that a situation could arise where the company car tax calculation take into account the options in terms of cost, not possibly not their CO2 impact. The result would be that adding a cost option to a company car that reduced CO2 output would actually cost a company car driver more in taxation than if the option was not added.
Taxation of fuel is a rather blunt instrument in driving consumer behaviour, however it is one that does penalise owners for increased CO2 output due to the relationship between amount of fuel used and the CO2 produced. This also applies to hybrid vehicles, particularly plug in hybrids (PHEVs) where the driver makes a choice to charge the vehicle between uses.
Three features worth individual comment are:
Automatic Transmission: The CO2 impact of this depends very much on the specific
system. Traditional automatic gearboxes tended to increase the CO2 output compared to manual transmissions. However, newer technology, particularly dual clutch systems with
up to nine gears can outperform manual transmissions in CO2 output. Electrical Technology: Improvements now mean that some new cars generate and use electricity in an “intelligent” way, using an “on demand” approach, therefore improving
CO2 output. Airbags: Overall, airbags have added a considerable weight to vehicles in order to protect the occupants. An additional air bag may not add a lot of weight itself (and therefore affect CO2), however the ever growing package as a whole is more significant.
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Table 11. CAP HPI View of the Effects of Optional Equipment on CO2 Emissions-Passenger cars
Major Option High Moderate Neutral Lower Justification fall 3x3 Rear seat belts None ABS None Air Conditioning Weight and compressor usage Alarm None – power draw low Alloy Wheels Lighter than steel wheels Audio remote control None – power draw low Auxiliary Input socket Minimal impact of current draw Blind spot system Minimal impact of current draw Bluetooth Minimal impact of current draw Body coloured bumpers Minimal impact on weight Central locking Minimal impact on weight Climate control Weight and compressor usage Cloth seat trim None Collision avoidance System adds weight Cruise Control Manual driving more efficient Curtain airbags Added weight from all airbags DAB Minimal impact of current draw Driver airbag Added weight from all airbags DVD system Added draw to run system Electric door mirrors Minimal impact on weight Electric sunroof Added weight and drag (open) Electric driver’s seat Weight and added draw Electric passenger seat Weight and added draw ESP/Traction control Low impact on weight Fixed Panoramic roof Heavier than standard car Folding rear seats Minimal impact on weight Front arm rests Minimal impact on weight Front electric windows Minimal impact on weight Front fog lights Additional draw when on Front head restraints Minimal impact on weight Front parking sensors Minimal impact on weight Full size spare wheel Weight increase Headlight washer Weight of pump/motor & draw Heated door mirrors Added draw from circuit Heated front seat Added draw from circuit Height adjust driver seat Heavier seat than standard Immobiliser Minimal impact Internet connection Addition draw when in use ISOfix Minimal impact on weight Lane departure system Minimal impact Leather seat trim Minimal impact on weight LED Headlights Lower draw than halogen Lumbar support Heavier seat than standard Manual Sunroof Added weight and drag (open) Media storage Minimal impact Metallic paint Minimal impact on weight Mica Paint Minimal impact on weight Mobile phone app screen Minimal impact of current draw Navigation system Additional current draw
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Major Option High Moderate Neutral Lower Justification fall Opening panoramic roof Added weight and drag (open) Park assist rear camera Weight and current draw Part leather seat trim Minimal impact on weight PAS Engine power to drive pump Passenger airbag Added weight from all airbags Pearlescent Paint Minimal impact on weight Radio/Cassette Added weight/current draw Radio/CD Added weight/current draw Radio/CD Multi-changer Added weight/current draw Radio/Minidisc Added weight/current draw Rear airbags Added weight from all airbags Rear armrest Minimal impact on weight Rear electric windows Minimal impact on weight Rear headrests Minimal impact on weight Rear parking sensors Minimal impact on weight Rear wiper Added motor weight Remote central locking Minimal impact on weight Reverse parking aid Minimal impact on weight Roof rails Typically added drag Self-parking system Added weight & current draw Side airbags Added weight from all airbags Solid Paint Minimal impact on weight Space saver spare wheel Heavier than tyre inflation Special Paint Minimal impact on weight Sports seats Variable dependant on brand Steel wheels Heaviest wheels Steering wheel controls Minimal impact of current draw Steering wheel adjust Minimal impact on weight Telephone Minimal impact of current draw Trip computer Minimal impact of current draw TV Added current draw Tyre pressure monitor Correct pressure aids mpg Tyre repair kit Lighter than a spare wheel USB/IPod interface Minimal impact of current draw Xenon lights Lower draw than halogens Day running lights Always on so increased draw Tow bar Add weight and increase drag Winter tyres Not as fuel efficient Body kit Likely to increase drag Premium audio system Additional weight amps Larger wheel size Depending on rolling diameter Automatic transmission Higher CO2 than manuals Four wheel drive system Weight and running resistance
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CO2 impacts (LCV market)
Features listed in Table 9 for cars have a similar impact on CO2 in the LCV market, with very few options reducing emissions compared to the base model. Unlike most cars, LCVs have not moved to alloy wheels, preferring to remain with steel wheels as standard fit. This is due to the cost and also that steel wheels are more resistant to damage and easier to repair. LCVs have also retained a full size spare wheel whereas inflation kits have become common in cars. Again, practicality overrides the weight reduction as a full size spare wheel reduces down time in the event of a puncture as well as a lower cost of ownership.
Table 12. CAP HPI View of the Effects of Optional Equipment on CO2 Emissions – LCV Options Major Option High Moderate Neutral Lower Justification fall Alloy wheels Lighter than standard steel Bulkheads - Steel Slight increase in weight ‘’ ‘’ - Wood Slight increase in weight ‘’ ‘’ - Window Slight increase in weight Half bulkheads Slight increase in weigh Cargo floor lining – Ply Ply flooring is standard ‘’ ‘’ Heavy duty wood increase in weight ‘’ ‘’ Plastic Slight increase in weight ‘’ ‘’ Rubber Slight increase in weight ‘’ ‘’ Sheet steel Slight increase in weight Deadlocks Security feature no effect Fuel tank expansion Weight of extra fuel and tank Rear door – Glazed Glass heavier than the base ‘’ ‘’ - Solid Base, lightest option Lashing points No effect Side Lining – wood Slight increase in weight ‘’ ‘’ - Sheet metal Slight increase in weight Sliding side door Increase in weight Spare wheel Majority have full size steel Tow bar Add weight and increase drag
LCVs have a variety of options not available on cars that increase the weight and CO2 of the vehicles studied, for example bulkheads and cargo area flooring. Bulkheads began as a cost option in 2003 and have now become standard throughout the segments. Conversely, cargo area ply lining has remained standard throughout, though cost options have increased with rubber, sheet steel and heavy duty wood now available. The bulkhead has a moderate impact on weight, however a heavy duty wood cargo area lining gives a significant weight penalty. Throughout the panel van sizes, standard sliding doors are becoming increasingly common, sacrificing weight in favour of ease of use. A less common option is a larger fuel tank, which is mainly seen on the larger panel vans, increasing by around 19 litres, thus increasing weight and CO2 but with practical benefit of an increased range.
Overall, practicality can hinder CO2 performance in the LCV market more than the car market due to the differing priorities of the customer.
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5) Manufacturer selection of optional equipment against competitors 10) 5a) Overview of why standard equipment levels improve over time 11) The level of standard equipment improves as manufacturers standardise features that had previously been offered as a cost option. The reasons for this are varied and include:
Competition between manufacturers, standardising options helps to entice customers through additional specification. Customer expectation that a new model is better specified than the outgoing one. Legal requirements e.g. safety features, daytime running lights. Environmental targets e.g. start stop, tyre repair kits, LED lamps. Equipment linked to brand image e.g. Volvo and safety features, Golf GTi for a ‘sporty’ image. New options to “back fill” standardised items to maintain margins and customer choices e.g. as parking sensors became standard, reversing cameras were introduced as an option. Reducing cost, especially technology related as production volume increases (economies of scale), patents expire, and supply chain experience and competition increases. Overlapping requirements of some features leads to synergies e.g. once a vehicle has a TFT screen, the addition of a reversing camera is relatively low cost.
Larger vehicles dictate specification for the smaller segments within the market
As already detailed in Section 1, manufacturers have opted to introduce new features on larger, more expensive vehicle segments first and then filter down to the smaller, cheaper vehicle segments. Table 13 shows two examples of this trend. Rear parking sensors are common on larger vehicle sectors (E-J) from 2003 for practical reasons (size of vehicle), with availability as an option down to the B-segment. By 2015 they are standard on D through M segments and available as an option on all others. The Rear View Camera is following the same trend and “backfilling” the standardised rear sensors.
This evolution of specification throughout the segments makes it clear that manufacturers that have a presence across all of these sectors can have a competitive advantage in being able to cascade a new feature from the F-segment through to the A-segment. VW Group (Bentley Mulsanne through to the Seat Mii), BMW Group (Rolls Royce Phantom to the MINI) and Toyota (Lexus LS to the Toyota Aygo) all benefit from this potential. Manufacturers with narrower product ranges that are not part of larger automotive groups can struggle and often form alliances to compensate, such as Fiat Chrysler Automobiles, formed in 2014.
Table 13. Historic Feature Development of Rear Parking Sensors and Rear View Camera
Option 2003 2009 2015 Option 2003 2009 2015
Segment Segment Rear Parking Sensors A Rear View Camera A B B C C D D E E F F Option J J M M Standard S S
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New legislation means manufacturers have to add safety features as standard to vehicles as a legal requirement
This is increasing the pace at which safety technology goes from optional to standard (Table 14). Daytime running lights (DRLs) were only available in the J-segment in 2003 and now all vehicles have them as standard due to new legislation. The D to S segments have adopted LED day running lights, largely due to the styling appeal, but also because the lower power requirements generate less CO2 by improving fuel economy. Continually advancing technology has led to a considerable fall in cost to the manufacturers and consequently DRLs are expected to filter down to the other segments.
Table 14. Historic Feature Development of Daytime Running Lights and Active City Stop
Option 2003 2009 2015 Option 2003 2009 2015
Segment
Segment Daytime Running Lights A Active city stop A Legal requirement B B Mostly LE D= L C C D L D E L E F L F O p t io n J L J M L M S t a n d a r d S L S Active city stop first appears in the F-segment as standard in 2009 and is filtering down the vehicle segments as shown in table 14. This has accelerated as in 2017 it becomes mandatory.
Many safety features which were optional in 2003 became standard features by 2015 e.g. ISOfix, front and rear side airbags, traction control and anti-lock braking systems. This has been driven partly by increased customer awareness of the Euro NCAP safety star ratings. In order to pass the tests associated with each star rating, specific safety features are required to be fitted as standard rather than available as an option. Achieving a five star rating gives manufacturers the opportunity to include it in marketing messages. Some of these standardised options are then “backfilled” with new options, such as pedestrian protection.
Each segment is affected by consumer demand for general convenience equipment to a varying degree, with options becoming standard at different rates
Two segments (A & C) where non- premium vehicles have been reviewed are the only one to remain on standard steel wheels throughout the data time period when other segments have moved to alloy wheels. Due to the sensitivity of the A-segment market to the retail price position, particularly a “starting from” advertised price, manufacturers look to make all viable savings which often results in weaker specifications. This is usually in line with customer expectations in the A-segment as value for money is key to customers.
The reason for the trend in the C-segment is as the main customers are fleet buyers where convenience options are seen as adding unnecessary cost unless they make an identifiable improvement to residual values. The B-segment has adopted alloy wheels due to a higher proportion of private buyers to whom style and image are often key, both when new and used.
The wheel size has also changed throughout the segments (Table 15), with E, F and J segment adding up to 2’’, and the A-segment adding 1’’. Conversely, the D-segment has reduced by an inch over the time period reviewed. This D-segment reduction is most likely to be fleet driven due to tax (CO2
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related) and total cost of ownership (smaller wheels with larger profile tyres are less likely to be damaged). When the standard wheel size increases, the size of the optional wheels also increase, which can have an adverse impact on CO2.
Bluetooth connectivity is a further example of shifting consumer demand influencing specification, where it has quickly been adopted due to the combined popularity of mobile phones and the banning of handset use in the UK. As a generic technology across all mobile telephone manufacturers, it also reduces the problem of vehicle hardware becoming redundant due to changes in the fast paced mobile phone industry. As a result, Bluetooth has replaced built in telephones which had previously been an option, particularly in the E & F segments.
Table 15 Historic Feature Development of Alloy Wheel (incl. Size) and Bluetooth Connectivity
Option 2003 2009 2015 Option 2003 2009 2015
Segment
Segment Alloy Wheels A 13" 14" 14" Bluetooth A B 15" 15" 15" B C 15" 15" 15" C D 18" 18" 17" D E 16" 16" 18" E F 17'' 18'' 18" F O p t io n J 17'' 19'' 19'' J M 16'' 16'' 16'' M S t a n d a r d S 18'' 17'' 18'' S
Option lists are gradually growing despite the rate at which optional equipment is standardised
As options represent an opportunity for many manufacturers to achieve higher sales revenue, it is not surprising that the number of available options has increased over the period studied. It also satisfies the increased desire for customers to personalise their new vehicles. The most expensive segments, F and J, typically have both the most expensive and extensive range of options available.
The example of air conditioning (Table 16) illustrates how standard features develop. The standard manual air conditioning system Table 16. Historic Feature Development of Air Conditioning being replaced by the auto climate system (previously an option), then by to dual systems and now the Option 2003 2009 2015
latest four zone climate control, Segment becoming standard in the F- Air conditioning A Man Man Man B Man Man Man segment. It is also now the optional (All standard) C Man Man Man upgrade in the J and E segments. D Auto Dual Dual Segments A through C remain with E Auto Dual Dual manual air conditioning, A and C F Auto Dual 4Zone segments due their customers J Auto Dual Dual being more cost conscious, and in M Man Auto Dual the B-segment because it is a S Auto Auto Auto popular upgrade that customers are still willing to pay for.
In the UK, the B-segment has experienced an increased demand for personalisation and some manufacturers have introduced a vast number of possible combinations using options, including colours (interior and exterior), specification, alloy wheels etc. Both the MINI brand and Vauxhall’s
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(Opel’s) Adam push this marketing message of individuality, with new and used buyers here being amongst the most fashion conscious in the market.
Over the data periods all segments have shown a greater focus on CO2, with the specifications changing accordingly
The data periods studied show a clear trend that manufacturers have a focus on reducing CO2 emissions. This is happening across all segments, the extent of which is often dependent on fleet market penetration. As CO2 is a major factor in calculating UK company car tax, emissions that are too high against competitors can have a detrimental impact on sales volumes. Specification and its impact on CO2 is then one tool a brand has to compete with. For example, manufacturers have progressively moved from full size spare wheels to space saving wheels, on to inflation kits to reduce weight and therefore improve CO2 as illustrated in table 17. Table 17. Historic Feature Development of Puncture Repair Solutions
Option 2003 2009 2015
Segment Spare wheel A S I I Full size = F B S I I Space saver = S C F S I Inflation kit = I D F S R Run flats = R E S S R F F F I (All standard) J F I I M F F I S I I I
Some options are not standardised, but do still evolve
Sunroofs are an example where this trend does not apply (Table 18). These have remained an option throughout the time period for all segments. There has, however, been a shift from the tilt and slide to panoramic roofs. The B-segment was an early adopter due to the popularity of the feature amongst private buyers with panoramic sun roofs deemed to be more stylish than the traditional tilt and slide.
Table 18. Historic Feature Development of Sunroofs
Option 2003 2009 2015
Segment Sunroof A T T P Tilt and slide =T B P P P Panaramic=P C T T P D T P P E T P P F T P P J T T P Option M P P P Standard S N/A N/A N/A
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5b) Specific Segment analysis
By using CAP HPI UK comprehensive new vehicle data relating to technical and specification components, comparison analysis has been completed focusing on the two high profile vehicles ,covering a 12-year life cycle period, within the following segments;
B-Segment: passenger car
F-Segment: passenger car
N1 class I: light commercial vehicle
N1 class III: light commercial vehicle
B-Segment
This segment is dominated by private buyers much more than other segments, and as a result has felt the effects of the increased trend towards personalisation in the market. The two models studied, Ford Fiesta and MINI, take different approaches to specification as a competitive tool.
The Ford Fiesta, launched in 1976, follows a more traditional approach: starting with a base model (Studio) and progressing up through a more linear hierarchy, adding specification and a wider range of engines (Table 19). At each trim level, optional extras are available for the customer to add. What is optional on the Studio becomes standard on the more expensive trim levels, e.g. heated windscreen is a £100 option on Style but standard on Zetec. Ford then “backfill” these options with others that are not available on all trims e.g. front parking sensors are not available as an option on the Studio model. This encourages customers to “walk up” through the model range in order to get the specification that they desire.
MINI (part of BMW), launched in the UK in 2001, has taken a different approach. Although MINI references the heritage of the car produced 1959 -2000, the current model was launched as a new, “fun” car targeted at a young at heart and affluent customer base. Rather than a rigid hierarchy, the approach MINI takes is to put a base model at the centre and offer options packs focused on different themes, such as technology or sport (Table 19). The majority of the packs are also not exclusive, allowing the customer to combine them. For example a sports-focused exterior from the Sport Pack can be combined with additional infotainment features via the Media Pack. This has proven to be successful: it has simplified the buying process when new and also allowed the used market to better understand specifications based solely on the pack name. A MINI with the Chilli Pack performs particularly well in the used market, maintaining a better residual value than a car without the pack.
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Table 19. B-segment Specification Line-Up Fiesta vs MINI
FORD FIESTA Sport Pack Studio Tech Pepper Pack pack Style Base
Zetec/Zetec S MINI Media Plus pack(s) JCW Titanium Pack pack Chilli Titanium X Pack
Sports / ST
F-Segment
This segment is dominated by demanding buyers and is where many new features are first introduced into the market. Again, like the B-segment, the two models studied (Audi A8 and Mercedes-Benz S Class) take different approaches to specification as a competitive tool. However, competitors within this segment tend to have quite closely aligned options availability at comparative price points. Typically, any advantage one manufacturer gains from being first to market with a new technology will be short lived.
The segment is typified by offering a large volume of options. For example, the Audi A8 offers 11 different leather trims, the Mercedes-Benz S Class offers 16. Options are also aimed at two distinct groups: owners who drive their cars and those driven by a chauffeur. For example, ‘Audi exclusive folding table for driver and passenger side’ is targeted at the latter group.
Audi takes the approach of allowing the customer to pick from an extensive range of options, offering 174 distinct items in total, (excluding differing exterior paint colours). Audi offers 11 standard paint options Exclusive Paint allows the customer to have the exterior body in any colour, going beyond the standard colour palette offered. This allows a huge number of possible combinations of specification when purchasing new and is often tailored both to the purchaser’s preferences and intended use of the vehicle. Therefore the focus of Audi is very much on a bespoke product to the new purchaser.
Mercedes-Benz have taken a different approach to the options specification process. Rather than making all options available individually, they are offered mainly in packages with a relatively small number of options available individually. At the time of writing there are c. 27 packages, prices ranging from £500 to £6,900. Given that the S Class is currently very new to the market, these packages may well change as the model progresses through its lifecycle.
Headlight technology development shows clearly how the F-segment has led the way in new features, as shown in Table 20. Now that LED lights have started to become standard, BMW have been the first to market with the latest technology, offering the option of laser headlights on the new BMW 7 Series.
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Manufacturers are steadily introducing options into their F-Segment models focusing on new driver aid technology, laying the foundations of a possible autonomous driving future. These technologies include traffic sign recognition, night vision, blind spot warning and others, all of which have been added to Audi’s, Mercedes’s and BMW’s F-Segment vehicles. Table 20. Historic Feature Development of Headlight Technology
Option 2003 2009 2015
Segment Headlights A H H H H = Halogen B H H X X = Xenon (incl. Bi Xenon) C H H H L = LED D H H X E H H X (All standard) F H X L J H X L M H H H S H H X
N1 Class I Segment
The class I segment predominately contains the smaller, compact light commercial vehicle which has been constructed or adapted as a derivative of a passenger vehicle having a maximum laden weight not exceeding 2 tonnes. Manufacturers will utilise passenger car designs and platforms to widen their product offering across segments such as the N1 segment class I. These types of vehicles are classified as ‘car derived’ vans (‘CDVs’). With increasing pressure of legislation aimed at the reduction of co2 emissions, manufacturers and consumers are looking for alternatives to accommodate their needs and comply with their requirements. As manufacturers look to new technology and alternative fuel types, consumers are reviewing their criteria to ensure they select the correct vehicle for the purpose for which it is used. Subject to the vehicle being practical for its intended purpose, down-sizing has become a consideration for many businesses and independent buyers, which has in turn seen an increase in new sales volumes for car derived vans over recent years.
Ford Fiesta and Vauxhall Corsa are two high profile vehicle brands within the Class I segment, both being car derived vans containing comparable options to the passenger car (segment A/B) from which it has been derived. Whilst the purpose of the vehicle is different to its passenger car relation they share key characteristics, therefore it is understandable that as cost options become standard fitment within the passenger car it filters across into the class I commercial vehicle segment. Electric door mirrors and headlight washers have been a constant standard fitment for vehicles within class I throughout the past 12 years aligned to its passenger car relation, whilst additional class categories within the N1 segment provide these options as a cost uplift, this is illustrated in Table 21.
Table 21. Historic Feature Development of Electric Door Mirrors and Headlight Washers – LCVs
Option 2003 2009 2015 Option 2003 2009 2015
Segment Segment Electric door mirrors I Headlight washers I II II III III
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In 2003, only one variant was available by both Ford and Vauxhall, Ford Fiesta Van and Vauxhall Corsavan both providing the consumer with the same body variant and a restricted list of cost 2007 with their competitive version containing the same name the Corsa ‘Sportive’.
Table 22. N1 class I specification line-up Fiesta van vs Corsavan
Vauxhall
The Ford Fiesta Van is the base model with standard fitted equipment aligned to its passenger car equivalent, supported by a wide choice of additional cost options including quick clear heated windscreen, cruise control, manual air conditioning and a choice of 15”/16” alloy wheels. As the specification line up improves certain costs options which were available on the base model become a standard fitment this is evident when comparing the base model Fiesta Van to the Fiesta Trend. Manual air conditioning a £400.00 cost option on the base Van becomes a standard fitment on the Trend with the original cost option being replaced by an additional cost option associated with heating/ventilation. As we move up into the higher trim variant of the Fiesta, to Sportive, the additional cost options available remain similar to that of the Trend. Key standard fitments have changed to provide the vehicle with a more sport like look and feel, including as standard front sport seats, sport suspension, sport rear bumpers, cruise control and 16” alloys wheels. As these options become a standard fitment new cost options become available backfilling the previous feature, such as 17” alloy wheels the previous 16” option. As trim levels improve so the cost new of the vehicle increases taking into account the additional specification applied.
Whilst specification line-ups have improved over the 12 years studied for both class I Fiesta and Corsa, availability of additional cost options has been consistent and comparable. Since 2009 pricing of additional cost options has decreased marginally but are aligned and competitive across both manufacturers.
The practicality of the vehicle is still the main priority when purchasing a small light goods vehicle. Whilst the payload of this type of vehicle is expected to be small, they do vary. The Vauxhall Corsavan provides the greater payload of 571kg and towing weight of 1250kg compared to the
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Fiesta van, however the Fiesta van is more efficient in terms of mpg and CO2 emissions. As this type of vehicle has one body variant only the manufacturer will continue to offer additional specification within variants in order to provide the consumer with greater choice.
N1 Class III Segment
The N1 class III segment contains the larger of the light good vehicles which will carry a much larger load to a maximum mass not exceeding 3.5 tonnes. Unlike class I and II where some, if not, the majority of the vehicles are related to a passenger car, class III vehicles has no relation at all. The class III vehicle is foreseen to be built according to practicality and purpose of use.
Whilst specification is a main influence for the class I vehicle to enable alternative choice, due to the restriction in body variants, this is not the case for the class III vehicle. Specification still plays a key factor but there is more focus to provide a wider range of body variants for each model. Mercedes- Benz is a prime example offering a choice of more than 1,000 Sprinter models and body variations.
Manufacturers offer the consumer a choice of ‘off the shelf’ body variants such as panel van, chassis cabs, Luton box, tipper and dropside providing a variety of choice to the consumer to suit the purpose in which a vehicle is to be used. As each manufacturer offers the same body variant key attributes such as payload, towing weight, fuel consumption and CO2 emissions become a competitive driving force which is followed by the availability to configure the vehicle to incorporate additional options. The majority of manufacturers who produce vehicles within the class III segment will look to provide a more diverse comprehensive list of optional equipment which will contain several variants of the same option, providing a greater variation of choice to accommodate different uses in which a light commercial vehicle may be used. This is evident within two high volume class III vehicles: Mercedes Sprinter and Ford Transit.
With both the Mercedes Sprinter and Ford Transit sharing key characteristic by offering the same body variants the list of options available to apply to the vehicle has grown significantly during 2003 to 2015. Only a small quantity of original cost options have become a standardised fitment during this period, those identified relating to the safety features of the vehicle. These included;
- Anti-lock braking system (ABS) - Driver air bags - Central locking - Deadlocks - Front electric windows - Audio remote control
By conducting the analysis of standard equipment and additional cost options available on new vehicles over a 12-year life cycle, we have found that vehicle such as the Mercedes Sprinter and Ford Transit retain their offering of cost options for a greater period before eventually moving an option to a standard fitment. This slow conversion is due to the purpose in which the application is to be used, by continuing to offer a diverse array of additional cost options the consumer has the opportunity to configure their chosen vehicle to meet their required needs and purpose of use.
Both the Mercedes-Benz Sprinter and Ford Transit provide options containing several variants, bulkhead/partitions are a prime example. Whilst both provide the full steel bulkhead as a standard entry option, they then offer an extensive combination of bulkhead/partition cost options to enhance the vehicles capability to fulfil the required purpose. A combination of bulkhead cost options available on Mercedes-Benz Sprinter are followed:
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- Bulkhead: steel ladder type - Bulkhead: steel with fixed window - Bulkhead - steel with no window - Bulkhead - Fully trimmed on cabin side (N1 Class III – Mercedes Sprinter 2003 - 2015)
Additional options containing several variants include towing equipment, e.g. tow bars provide with a combination of features to accommodate pulling weight and practical use.
In addition to the comprehensive list of option variants, pack options have become an alternative and popular offering from the manufacturer. Combining a number of cost options to maximise value at a reduced cost rate is a favourable approach by the manufacturer and is foreseen acceptable by the consumer. By providing packs with a combination of options which compliments one another, the manufacturer looks to increase revenue at a lower cost rate.
Since 2005, the Ford Transit has provided an array of option packs which contain a specification line- up. The variations of the Ford LX pack is a prime example, Table 23 identifies how the specification line-up of the pack develops.
Pack 1 would be identified as the base level from which a specification line-up is derived adding alternative options to create pack variants. Pack 2 provides the consumer with an added options of air conditioning and full bulkhead focusing on driver convenience and comfort. Whilst pack 3 provides addition options associated with the safe carrying of goods, pack 4 focuses on vehicle security. The Ford Transit provides a comprehensive list of pack options focused driver comfort and convenience in comparison to the Mercedes Sprinter.
Table 23. Ford Transit LX pack specification line-up
LX pack contents Pack 1. Pack 2. Pack 3. Pack 4. 6000 RDS Stereo radio/CD player with 2 speakers x x x x Electric front windows x x x x Electrically heated and adjustable door mirrors x x x x Front fog lights x x x x Heated rear window x x x x High mounted rear brake light x x x x Metallic paint x x x x Partial wheel covers x x x x Quick clear heated windscreen x x x x Second remote key fob x x x x Tinted glass x x x x CFC-free air conditioning x Full width unglazed bulkhead x x x Rear step x Cargo Stowage Rail x Load area protection kit x Anti-theft perimeter alarm system x High mounted rear brake light x Rear parking distance sensor x
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The options available on Class III vehicle is quite extensive, whilst Ford look to offer a diverse array of option’s relating to driver convenience and comfort, Mercedes-Benz lead the way with new technology relating to driver safety and connectivity.
Mercedes-Benz offers the latest technology features relating to active safety equipment including lane keep assist and collision prevention assist, across their vast range of Sprinter variants. The development of safety equipment has become far more advanced in recent years providing computerised information platforms, alerting drivers of potential road dangers, and mechanical errors. As technology continues to evolve at a fast pace manufacturers are forever playing catch up to offer the latest technology features. Connectivity is a key feature which continues to evolve becoming far more advance making it hard for manufacturers to keep one step ahead. Throughout the past 12-years, satellite navigation system has evolved from what once a stand-alone cost option with a dependency on a compact disc to load the latest updates, to the more advanced integral multimedia navigation systems. The multimedia navigation system of recent years provides the users with key features including touch screen functionality and voice activation accompanied by greater software capabilities relating to data storage and updates.
The fleet industry is a key targeted audience for the new sales of class III vehicles, manufacturers offer a wide range of off-the-shelf vehicles which is good news for fleet operators. As they are now able to walk into a showroom and pick out the exact commercial vehicle they want, without having to buy base vehicles and have them converted separately. Manufacturers recognise the diverse needs of the fleet industry and look to accommodate their consumers increasing needs in many ways. The whole life cost of a vehicle is of increasing importance to a fleet operator. The tyres which are applied to a vehicle can impact on the vehicles whole life cost, both Ford Transit and Mercedes Sprinter have budget tyres as a standard feature with the cost option to upgrade to a more favourable tyre.
Table 24.Tyre Options Ford Transit vs Mercedes Sprinter
Tyre Options Transit Sprinter Bridgestone tyres Continental Tyres Michelin Tyres
Alloy wheels have remained a constant cost option for commercial vehicles within the class III category. Steel wheels remain the standard fitment for Ford Transit and Mercedes-Benz Sprinter, whilst the size of the steel wheel has evolved over time moving from 15” to 16”. Alloy wheels continue to remain a cost option and are available in a variety of sizes which have evolved aligned to their steel wheel relation, this is consistent throughout each N1 segment.
Table 25. – N1 segment Historic Development of Alloy wheel Size Variations
Option 2003 2009 2015
Segment Alloy wheels I 15" 15" 16" II 15" 15" 16/17" III 16" 16" 17"
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In terms of product development, the production of a commercial vehicle, specially relating to a class III vehicle, can be seen as a higher cost to a manufacturer when compared to a passenger car, as the production of a commercial vehicle involves pressed and welded steel bodies that require expensive press tooling. Ensuring the correct design is produced in the correct variants with a wide range of suitable options is a significant task for the manufacturer. Therefore it comes as no surprise that this leads to key fundamental economics which has prompted co-operative development and production within the commercial vehicle sector which is clearly exemplified by the joint ventures between vehicle manufacturers, sharing production facilities.
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5c) Differences between vehicles purchased by commercial and private users
Private Buyers The key drivers for private buyers are quite different to those in the fleet and commercial markets. An initial decision will usually be driven by:
Vehicle Size and Functionality: including number of doors Brand / Model Preference Essential Specifications including preferred fuel types Price: most purchase new cars on finance using PCP (Personal Contract Plan), thus the list price is less important than the monthly payments, making the expected residual value at the end of the contract an integral part of the customers buying decision.
Fuel Efficiency: The impact of CO2 on the VED (Vehicle Excise Duty) cost is a relatively small part of the overall running cost. However, fuel efficiency is much more significant, especially in times of higher fuel costs. However, there is obviously a strong correlation between fuel
efficiency and CO2 output.
Commercial Buyers
There are wider variations in the requirements of fleet users, driven by the differing user requirements and the different tax regimes that they are subject to. Some are common, whilst others are more specific as shown in Figure 3.
Figure 3 - Variation in Commercial User Requirements
COMPANY CAR DRIVER COMMERCIAL USERS
Options Practicality Style Residual Value Minimal options User has choice Insurance Comfort Efficiency Bulk supply Brand strength Safety Whole life cost P11D valuation CO2 Driver has little Higher specification Reliability choice Specific business Own maintainance models available
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Fleet (company car driver) – These vehicles can be chosen by the individual driver (often from a list of preselected vehicles) and the selection is heavily influenced by company car tax costs which takes into account the list price (including options) and published CO2 output. Manufacturers often respond to this by producing a “business edition” variant which includes popular specification for these users and a powertrain tuned to minimise CO2 emissions.
Commercial Fleet – These vehicles are focused on practicality and whole life cost of ownership, with bulk purchases a regular occurrence. They are generally working vehicles and thus there is no influence of individual taste as the driver is not part of the purchase process. Option selection is limited, with the choice leaning more towards the base model once the essential requirements are met for the vehicles intended use, thus avoiding unnecessary expense. There is, however, beginning a shift in the commercial fleet market to add health and safety related options to new purchases, such as lane departure warning systems or lumbar support. This is to maintain the employer’s duty of care to its employees where their roles include driving. Dealer networks are less important with fleet operators choosing independent nationwide networks or in-house teams to service their vehicles (with manufacturer’s agreement for warranty validity purposes). This is in contrast to smaller fleets who do not have the negotiating power and are more restricted in where the vehicles can be serviced, or risk invalidating the manufacturer warranty.
Fleet (rental) – In the past, rental companies would purchase vehicles in bulk with the minimum specification that kept both the rental customer satisfied and maximised the resale value at disposal. For three reasons this framework is now changing:
1. Increased competition, leading to specification being used as a key customer selling point. 2. Manufacturers are viewing rental as a marketing tool, particularly for new models as vehicles are seen on the road, and possibly also driven by potential customers. 3. Both manufacturers and rental companies are now more knowledgeable about residual value management, leading to rental fleets having portfolios with a mix of specifications, so avoiding large numbers of the identical vehicles being disposed of at the same time and weakening the values in the market.
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5d) Actions taken by manufacturers to ensure competitiveness
Table 26. CAP HPI View of Manufacturer Activity by Sector and Market
Area of Action Car LCV A nationwide franchised dealer Servicing is more likely in house or network is important for a company by non-franchised national networks car fleet manager as the majority of Infrastructure unless it was included by the their cars will be serviced there. The manufacturer as part of the larger commercial fleets may well be purchase. serviced in house. Discounts are used to compete between brands looking to achieve volume sales as they have an immediate impact upon the total cost of ownership of the vehicles. Some brands may well discount less and instead rely upon the Discount brand to drive demand and do not “chase” volume targets as vigorously. In the LCV market, discount is less prevalent unless purchasing in larger quantities. Financing is increasingly important as a method of purchase. Few cars or LCVs are now purchased outright, with government (local or national) being the main exception. As a result, manufacturers now compete more on Financing of monthly cost than outright purchase price, making total cost of ownership, Purchases including depreciation, more significant. The internet has also given consumers far more information and made deals more transparent and comparable. In the company car sector CO2 is a key contributor to the whole life cost due to the UK taxation system driving manufacturers to use specification to produce the most efficient vehicles possible whilst remaining commercially CO2 competitive. All the models studied have reduced their CO2 levels over the time period. For LCVs, the CO2 output is less significant in the taxation regime for the end users. Specification is an important competitive tool in the car market, evidenced by how manufacturers For LCVs specification has been often follow suit with new feature basic, with features added primarily introduction. to improve practicality. There is a
Additional specification is often used noticeable recent shift to fit more to help the sale of models in the features that support health and latter stages of their life cycle to add safety expectations, such as lane customer appeal when compared to departure warning systems. Simple features, such as manual air Specification newer competitors. conditioning, is not yet standard on Many customers shop with a fixed all LCVs, although newer budget and look at what they can get generations of existing models are for that money. Specification plays a starting to see car like interiors and key part in this. optional features. This will likely be a A vehicle with appropriate key area for manufacturers to specification also performs better in compete and differentiate their terms of residual values, supporting products. a lower total cost of ownership and PCP rates.
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LCVs are highly fleet focused as it is Fleet focused models now have their core market, although some dedicated specification trims added personalisation has started to to the ranges with a name associated appear in the market to attract Fleet focus with fleet such as ‘SE Nav’ or private buyers, mainly via interior ‘Business Edition’, especially in the upgrades. However, the overriding segments A, C, D and E. priority remains being fit for purpose. Brand status is generally more Being much more commercially important to the UK company car focused, brand is less important driver where the vehicle is used for than in the company car market. both business and personal However, it can still have an purposes. For the true commercial Brand status influence, particularly where there is users brand status has a lesser a reputation for reliability and build importance but can still effect quality. This can be seem in the purchases as brands may hold a retained value performance of reputation for reliability and build certain brands. quality. Warranties can be important in supporting sales and have been used by some newer brands to help build customer confidence in their products (e.g. Kia offer a 7 year warranty). Otherwise, most manufacturers tend to match each other at 3 years or 60,000 miles.
Warranties are important to fleet operators, both cars and LCVs, as they can reduce total ownership costs. Larger fleet operators will make decisions Warranty regarding the value of a warranty depending on likely duration of ownership, expected mileages and possible cost savings by servicing vehicles themselves.
Warranties are manufacturer supported but can be augmented by additional dealer purchased warranties, often used as an additional sales tool in the purchase process.
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Table 27. Models Reviewed by Segment
In support of the UK study into the fitment and pricing of optional extras on new motor vehicles and their resale in the used market the following table identifies those vehicles which were selected aligned to key criteria levels associated to new vehicle sale volumes, and product life cycle availability covering a 12 year period. Segment Description Sample Model 1 Sample Model 2
Cars A City Car Fiat 500 Volkswagen Up! B Super Mini Ford Fiesta MINI Cooper C Lower Medium Vauxhall Astra Volkswagen Golf D Medium BMW 3 Series Ford Mondeo E Upper Medium Mercedes-Benz E Class BMW 5 Series F Luxury Mercedes-Benz S Class Audi A8 J SUV Volvo XC90 Honda CR-V M Multi-Purpose Vehicle Renault Scenic Vauxhall Zafira S Sports Audi TT Mazda MX-5
LCVs NI Class I Mass reference <1305kg Ford Fiesta Vauxhall (Opel) Corsavan NI Class II Mass in reference 1305kg Citroen Berlingo Volkswagen Caddy to 1760kg NI Class III Mass in reference >1760kg Ford Transit 260 Mercedes-Benz Sprinter 313
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6) Appendix i) Mean Cost Option Analysis: Cars by Segment - Segment coverage A/B, C, D, E, F, J, M, S.
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Mean option cost (£ GBP) by generic cost item for each vehicle segment: CARS
The following tables provide the mean option cost of key manufacturer optional equipment at three date points.
Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 3x3 point rear seat belts 155.46 150.00 50.00 B Segment 86.78 150.00 50.00 C Segment 86.91 D Segment 215.95 S Segment 75.00
ABS 387.34 B Segment 290.07 C Segment 326.79 J Segment 795.38 M Segment 427.56 S Segment 925.00
Air conditioning 816.28 517.72 473.96 B Segment 628.12 357.35 383.01 C Segment 584.45 557.65 378.26 D Segment 1,709.13 474.14 310.00 E & F Segment 1,004.23 577.20 502.82 J Segment 545.16 471.33 545.00 M Segment 663.94 703.10 465.49 S Segment 1,269.26 591.37 786.05
Alarm 264.60 203.39 212.17 B Segment 285.00 194.34 204.52 C Segment 282.42 202.36 239.33 D Segment 245.91 E & F Segment 239.35 J Segment 185.00 100.00 M Segment 238.03 204.51 225.21 S Segment 337.50 239.97 304.23
Alloy wheels 759.66 712.73 798.70 B Segment 490.08 540.45 595.20 C Segment 565.78 512.78 686.07 D Segment 634.34 601.32 677.11 E & F Segment 1,119.48 933.22 1,296.22 J Segment 662.59 964.16 1,057.65 M Segment 580.58 498.11 604.72 S Segment 1,075.95 861.97 1,142.28
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Audio remote control 599.33 341.16 289.26 B Segment 326.44 164.09 230.97 C Segment 397.34 530.58 163.55 D Segment 1,027.24 325.34 139.26 E & F Segment 364.86 215.93 426.25 J Segment 463.51 283.66 233.23 M Segment 535.28 171.73 391.31 S Segment 520.78 346.21 457.34
Auxiliary input socket 831.24 809.97 B Segment 686.48 291.67 C Segment 824.22 957.50 D Segment 1,033.94 E & F Segment 559.15 280.00 J Segment 1,152.69 544.56 M Segment 598.20 867.71 S Segment 799.26 658.95
Blind spot information 463.50 535.12 B Segment 495.00 C Segment 610.00 602.42 D Segment 442.67 513.95 E & F Segment 443.32 506.90 J Segment 464.27 490.74 M Segment 545.68 S Segment 440.00 506.90
Bluetooth connection 609.70 448.56 408.05 B Segment 283.89 299.00 C Segment 586.43 411.90 450.02 D Segment 501.87 449.15 381.63 E & F Segment 681.75 498.25 373.78 J Segment 448.12 423.32 M Segment 609.97 547.99 S Segment 906.11 463.42 392.23
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Body coloured bumpers 311.44 630.67 463.88 B Segment 450.00 C Segment 118.33 D Segment 330.17 1,100.00 E & F Segment 540.00 535.00 J Segment 900.00 M Segment 500.00 102.00 S Segment 427.62
Central locking 334.29 74.75 144.00 B Segment 435.00 C Segment 275.00 D Segment 50.00 M Segment 74.75 144.00
Climate control 638.36 511.95 448.18 B Segment 528.57 310.69 344.49 C Segment 784.87 432.89 444.68 D Segment 533.97 551.90 384.87 E & F Segment 1,181.03 594.01 930.25 J Segment 536.47 518.10 558.31 M Segment 446.37 655.51 499.63 S Segment 400.00 375.80 522.42
Cloth seat trim 220.16 300.17 461.16 B Segment 269.45 700.00 569.18 C Segment 306.82 118.84 387.20 D Segment 183.62 337.51 415.00 E & F Segment 365.66 222.94 J Segment 286.80 168.62 M Segment 950.00 622.98 692.83 S Segment 845.80 196.84 582.50
Collision avoidance braking 1,387.50 1,109.82 649.34 B Segment 297.57 C Segment 527.26 D Segment 1,043.93 630.57 E & F Segment 1,383.33 1,135.60 1,212.41 J Segment 1,245.15 756.16 M Segment 1,130.00 464.69 S Segment 1,400.00 1,106.96 1,046.42
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Cruise control 405.83 575.09 557.36 B Segment 227.34 180.09 298.94 C Segment 223.46 211.00 438.87 D Segment 351.09 747.18 691.14 E & F Segment 1,002.83 950.31 1,224.56 J Segment 239.76 928.17 663.36 M Segment 238.27 439.41 388.81 S Segment 497.15 450.72 679.09
Curtain airbags 466.08 281.53 489.69 B Segment 382.89 299.40 608.17 C Segment 679.26 D Segment 280.00 305.00 E & F Segment 360.00 M Segment 317.26 252.69 331.88
Digital radio 480.00 285.68 427.87 B Segment 271.45 319.57 C Segment 351.01 399.02 D Segment 244.60 777.38 E & F Segment 320.80 315.00 J Segment 237.00 450.76 M Segment 355.36 412.31 S Segment 480.00 295.33 581.94
Drivers airbag 250.00 90.00 M Segment 250.00 90.00
DVD 1,799.78 1,440.81 970.20 B Segment 300.00 C Segment 1,695.00 1,775.96 921.54 D Segment 1,833.55 1,580.70 924.49 E & F Segment 2,682.73 1,161.99 1,232.14 J Segment 2,500.00 1,415.41 1,085.00 M Segment 1,426.72 1,601.12 1,714.88 S Segment 1,314.09 855.98
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Electric door mirrors 555.08 275.10 280.42 B Segment 82.50 102.57 131.45 C Segment 411.00 222.56 289.40 D Segment 510.54 211.39 299.18 E & F Segment 839.85 340.75 299.72 J Segment 407.24 427.65 275.12 M Segment 171.77 252.26 269.63 S Segment 396.94 272.87 246.44
Electric sunroof 722.24 777.53 916.66 B Segment 452.45 608.45 688.91 C Segment 534.14 675.10 846.83 D Segment 706.99 752.86 939.39 E & F Segment 1,120.82 976.45 1,085.34 J Segment 675.68 1,010.60 1,043.57 M Segment 696.92 710.15 919.48 S Segment 1,015.26 1,038.95 1,448.69
Electrically adjustable drivers seat 1,205.30 873.92 976.40 B Segment 1,213.33 1,610.00 C Segment 1,182.35 856.00 1,161.58 D Segment 904.95 793.12 713.44 E & F Segment 1,484.20 918.94 1,086.45 J Segment 1,913.90 943.75 896.04 M Segment 1,331.71 1,082.39 683.75 S Segment 1,078.46 850.81 1,549.09
Electrically adjustable passenger seat 1,324.02 866.76 888.08 B Segment 1,213.33 1,610.00 C Segment 1,234.33 896.98 849.20 D Segment 993.07 817.22 664.34 E & F Segment 1,613.18 900.00 1,080.52 J Segment 1,997.37 802.25 847.41 M Segment 1,331.71 1,082.39 701.47 S Segment 1,130.77 864.42 1,549.09
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 ESP 535.98 371.70 B Segment 408.94 346.22 C Segment 626.12 402.87 D Segment 545.52 365.00 E & F Segment 275.00 J Segment 328.33 M Segment 530.26 418.77 S Segment 554.76 315.25
Fixed panoramic glass roof 947.00 655.86 794.29 B Segment 448.75 349.45 634.44 C Segment 372.73 805.99 D Segment 510.00 834.24 E & F Segment 1,200.00 1,683.40 1,635.00 J Segment 2,133.00 883.25 M Segment 603.81 662.33 S Segment 1,390.00 949.68 2,155.33
Folding rear seats 506.40 310.40 440.71 B Segment 120.38 233.82 156.76 C Segment 110.00 140.00 154.55 D Segment 275.33 282.55 219.45 E & F Segment 725.30 376.25 356.04 J Segment 540.00 1,446.70 M Segment 77.55 323.67 720.00 S Segment 221.88 214.29
Front armrest 355.50 174.01 115.31 B Segment 180.00 107.09 103.58 C Segment 146.45 314.70 137.65 D Segment 161.71 131.64 73.34 E & F Segment 310.39 258.33 881.00 J Segment 363.83 115.77 M Segment 750.82 228.11 52.50 S Segment 106.67 105.54 92.86
Front electric windows 187.83 176.72 510.00 B Segment 435.00 405.00 C Segment 313.24 525.00 D Segment 130.00 M Segment 68.21 100.63 120.00
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Front fog lights 325.36 194.26 356.11 B Segment 151.68 132.44 161.80 C Segment 465.92 175.56 440.65 D Segment 244.44 175.00 404.29 E & F Segment 197.14 175.00 J Segment 142.65 234.71 449.90 M Segment 375.45 381.78 297.96 S Segment 195.00 155.18 211.00
Front head restraints 927.22 119.83 479.87 C Segment 1,350.00 D Segment 138.70 E & F Segment 256.15 J Segment 165.23 1,594.00 M Segment 100.00 87.46 S Segment 671.59 132.00 144.07
Front parking sensor 462.63 486.99 502.60 B Segment 272.58 411.18 C Segment 451.46 581.59 D Segment 457.39 514.42 434.83 E & F Segment 478.72 554.97 408.55 J Segment 410.00 468.44 540.84 M Segment 463.89 441.13 559.59 S Segment 442.70 625.49
Full size spare wheel 110.24 127.66 261.54 B Segment 88.89 56.32 94.45 C Segment 63.37 93.55 95.54 D Segment 111.67 86.86 140.92 E & F Segment 127.50 430.00 J Segment 595.86 553.27 656.12 M Segment 102.27 163.02 S Segment 198.46 144.23 1,487.20
Headlight washers 549.01 593.22 591.14 B Segment 234.87 416.96 425.66 C Segment 710.74 576.68 656.83 D Segment 514.68 619.91 504.32 E & F Segment 564.32 652.46 670.20 J Segment 754.96 753.84 623.81 M Segment 471.56 611.99 675.80 S Segment 537.53 571.10 906.21
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Heated door mirrors 173.51 184.09 428.02 B Segment 118.06 62.24 93.50 C Segment 100.00 140.00 150.00 D Segment 181.33 643.17 E & F Segment 280.00 324.83 J Segment 228.72 156.58 M Segment 222.99 361.17 153.75 S Segment 166.40 104.16 252.12
Heated front seat 1,034.98 823.46 862.48 B Segment 1,180.65 199.85 290.59 C Segment 1,247.23 801.76 1,114.37 D Segment 705.07 799.13 785.21 E & F Segment 1,272.48 825.22 797.29 J Segment 1,679.77 857.42 669.29 M Segment 1,036.96 1,248.59 895.72 S Segment 1,098.54 609.12 1,145.32
Height adjustable driver’s seat 1,184.05 770.98 1,051.25 B Segment 141.96 73.33 70.00 C Segment 752.59 879.79 927.90 D Segment 923.24 543.06 888.21 E & F Segment 1,705.26 882.85 800.98 J Segment 1,398.00 832.95 1,027.12 M Segment 1,040.00 782.11 745.83 S Segment 874.43 835.10 1,879.36
Immobiliser 265.00 265.00 260.00 C Segment 260.00 S Segment 265.00 265.00
Internet connection 299.20 C Segment 376.45 D Segment 230.17 E & F Segment 142.40 J Segment 326.17 M Segment 590.68 S Segment 215.29
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Isofix child seat anchor points 355.81 82.76 85.70 B Segment 55.71 99.43 155.00 D Segment 347.61 45.00 E & F Segment 377.13 66.41 129.00 J Segment 53.32 M Segment 450.33 50.00 168.00 S Segment 45.22 41.90 122.00
Lane departure warning 434.70 549.79 B Segment 296.90 C Segment 698.67 D Segment 437.04 534.63 E & F Segment 426.42 485.64 J Segment 463.33 517.76 M Segment 650.39 S Segment 430.00 515.80
Leather seat trim 1,368.60 1,878.76 1,412.42 B Segment 1,189.65 862.02 1,017.21 C Segment 1,262.72 1,176.09 1,221.99 D Segment 1,295.34 2,384.86 1,308.51 E & F Segment 1,596.35 1,739.39 1,735.32 J Segment 1,913.72 2,163.52 1,463.92 M Segment 1,446.11 1,408.18 1,256.75 S Segment 1,105.07 1,739.87 1,646.82
LED headlights 2,740.00 1,059.99 B Segment 683.83 C Segment 743.92 D Segment 1,145.73 E & F Segment 1,401.09 J Segment 1,198.27 M Segment 805.59 S Segment 2,740.00 1,485.33
Lumbar support 768.56 602.27 791.78 B Segment 941.74 779.60 56.00 C Segment 857.19 695.43 1,090.36 D Segment 582.48 394.14 504.33 E & F Segment 971.68 335.36 335.06 J Segment 75.00 229.81 549.11 M Segment 230.15 266.61 S Segment 665.17 665.06 912.87
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Manual sunroof 325.84 378.33 985.00 B Segment 323.68 C Segment 350.00 J Segment 225.00 1,000.00 M Segment 374.00 378.33 S Segment 895.00
Media storage 967.14 895.43 C Segment 245.00 874.58 D Segment 1,170.46 876.87 E & F Segment 852.80 281.49 J Segment 1,042.36 781.53 M Segment 1,941.85 1,235.93 S Segment 933.45 988.97
Metallic Paint 429.57 480.46 595.01 B Segment 291.19 379.39 482.64 C Segment 326.52 444.89 535.15 D Segment 487.47 483.44 612.97 E & F Segment 569.27 622.23 794.09 J Segment 368.80 521.06 679.49 M Segment 357.79 407.62 523.58 S Segment 600.03 633.23 787.05
Mica Paint 331.93 433.73 558.49 B Segment 233.50 362.19 527.66 C Segment 255.17 386.69 544.49 D Segment 342.05 464.90 566.05 E & F Segment 375.00 518.33 610.00 J Segment 385.87 495.28 589.50 M Segment 273.56 389.11 503.55 S Segment 268.75 465.29 636.71
Mobile phone App interface 318.68 C Segment 188.65 D Segment 118.72 E & F Segment 160.00 J Segment 171.43 M Segment 730.65 S Segment 204.17
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Navigation system 1,824.08 1,377.46 765.16 B Segment 1,298.07 1,037.60 520.60 C Segment 1,470.70 1,364.15 726.04 D Segment 1,924.76 1,440.35 884.03 E & F Segment 2,200.77 1,236.01 500.00 J Segment 1,766.33 1,832.52 859.66 M Segment 1,463.65 1,213.94 810.52 S Segment 1,890.83 1,504.52 1,152.62
Opening panoramic glass roof 1,066.68 874.90 950.87 B Segment 500.00 636.47 653.46 C Segment 600.00 610.91 881.67 D Segment 860.00 1,049.33 1,088.29 E & F Segment 1,725.00 1,222.65 1,206.30 J Segment 1,053.32 1,132.49 M Segment 949.51 727.53 961.03 S Segment 1,075.00 990.00
Park assist camera 773.53 392.48 B Segment 312.39 C Segment 537.71 277.04 D Segment 937.43 391.38 E & F Segment 616.78 490.29 J Segment 948.48 444.25 M Segment 817.88 382.95 S Segment 823.70 552.45
Partial leather seat trim 1,240.71 1,810.60 829.68 B Segment 480.20 456.83 668.73 C Segment 807.64 751.30 625.00 D Segment 1,468.03 2,700.84 863.23 E & F Segment 390.00 1,966.32 556.70 J Segment 495.00 1,885.94 1,180.61 M Segment 800.00 1,277.59 935.05 S Segment 715.63 1,130.90 1,267.67
PAS 214.83 432.61 323.55 B Segment 333.33 303.40 C Segment 332.61 293.94 D Segment 191.64 439.18 197.60 E & F Segment 266.17 584.07 1,207.32 J Segment 212.17 363.50 258.46 M Segment 298.21 S Segment 234.29 470.51 255.26
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Passenger airbag 225.36 174.42 150.00 B Segment 290.54 C Segment 175.00 D Segment 110.00 J Segment 380.00 M Segment 250.00 258.83 150.00 S Segment 275.00 110.00
Pearlescent Paint 645.26 496.78 675.47 B Segment 310.15 410.66 559.78 C Segment 611.70 454.29 593.17 D Segment 780.90 470.45 552.67 E & F Segment 567.75 588.92 740.82 J Segment 351.48 531.07 644.51 M Segment 371.64 412.39 591.87 S Segment 731.18 724.49 1,570.00
Radio/Cassette 802.97 617.33 B Segment 437.78 C Segment 585.78 524.29 D Segment 1,627.39 E & F Segment 576.18 J Segment 820.00 M Segment 528.08 S Segment 424.68 698.75
Radio/CD 1,017.58 1,045.14 712.80 B Segment 622.50 707.79 354.84 C Segment 940.02 974.93 615.47 D Segment 1,054.72 1,420.18 776.13 E & F Segment 968.36 800.00 500.00 J Segment 1,310.79 983.15 845.97 M Segment 1,075.16 625.49 861.48 S Segment 1,106.53 1,260.61 880.34
Radio/CD Multichanger 699.20 543.81 692.04 B Segment 628.56 300.23 305.30 C Segment 644.64 556.31 D Segment 752.34 534.19 E & F Segment 685.94 613.61 1,022.57 J Segment 948.98 368.31 1,036.33 M Segment 740.76 853.85 214.29 S Segment 380.53 433.30 512.89
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Radio/Minidisc 323.23 B Segment 135.00 C Segment 295.00 D Segment 294.23 E & F Segment 156.06 J Segment 275.00 S Segment 719.24
Rear airbags 318.18 272.74 362.04 B Segment 514.21 650.00 C Segment 237.99 261.06 332.06 D Segment 302.09 259.51 405.42 E & F Segment 297.66 281.87 325.80 J Segment 1,686.88 240.86 287.10 M Segment 240.88 259.26 265.04 S Segment 272.89 278.64 323.75
Rear armrest 236.49 200.14 428.16 C Segment 624.68 528.14 D Segment 144.05 203.94 100.00 E & F Segment 500.00 550.00 1,089.62 J Segment 220.21 175.00 M Segment 250.00 160.72 154.29 S Segment 153.60
Rear electric windows 277.14 352.56 339.73 B Segment 436.55 552.29 166.21 C Segment 234.55 144.00 457.25 D Segment 257.04 325.00 170.00 J Segment 150.00 M Segment 227.55 179.58 214.79
Rear headrests 423.27 75.92 84.24 B Segment 67.56 91.07 77.30 C Segment 665.29 125.56 D Segment 65.47 39.57 59.08 E & F Segment 127.27 582.52 250.77 J Segment 39.15 114.90 M Segment 43.48 86.62 36.82 S Segment 75.00 115.13 216.00
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Rear parking sensor 333.92 434.17 459.99 B Segment 260.93 248.47 361.31 C Segment 291.40 432.96 504.68 D Segment 357.24 483.51 442.00 E & F Segment 388.60 506.58 412.94 J Segment 376.25 453.21 503.63 M Segment 301.05 388.94 446.61 S Segment 322.02 411.80 583.87
Rear wiper 250.00 197.91 209.00 D Segment 250.00 E & F Segment 224.00 249.00 M Segment 180.56 96.00 S Segment 225.00 234.00
Remote central locking 418.81 463.82 448.30 B Segment 289.86 350.47 219.13 C Segment 275.00 415.00 408.80 D Segment 452.85 479.61 E & F Segment 760.00 712.33 683.04 J Segment 699.00 544.46 M Segment 125.54 416.42 S Segment 450.00 474.56 481.59
Reverse parking aid 450.23 463.13 388.34 B Segment 292.96 248.47 327.36 C Segment 291.40 433.83 393.19 D Segment 457.93 509.01 363.48 E & F Segment 417.16 493.21 391.57 J Segment 432.30 589.10 420.36 M Segment 641.16 450.76 347.38 S Segment 367.95 461.00 542.79
Roof rails 190.60 192.71 240.65 B Segment 200.00 148.87 217.13 C Segment 202.50 207.01 D Segment 155.96 151.29 234.18 E & F Segment 245.00 210.00 232.64 J Segment 222.58 281.97 321.62 M Segment 194.26 199.78 235.53 S Segment 253.21 239.74 225.64
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Self parking system 630.56 536.90 B Segment 548.91 C Segment 684.49 544.59 D Segment 525.00 519.23 E & F Segment 365.31 J Segment 377.81 597.21 M Segment 580.00 544.69 S Segment 657.94 604.25
Service 1,250.00 330.46 B Segment 332.50 C Segment 349.00 D Segment 399.00 E & F Segment 1,250.00 280.00 J Segment 399.00 M Segment 250.00
Side airbags 362.30 261.19 331.72 B Segment 298.41 175.12 525.00 C Segment 650.15 261.06 332.06 D Segment 302.60 259.51 336.56 E & F Segment 316.31 281.87 325.80 J Segment 763.33 240.86 287.10 M Segment 243.97 276.85 261.02 S Segment 782.77 234.74 323.75
Solid Paint 661.47 1,643.54 1,743.46 B Segment 360.42 333.06 345.00 C Segment 241.91 250.00 377.80 D Segment 584.53 488.89 E & F Segment 844.26 250.00 5,516.78 J Segment 343.37 280.06 904.81 M Segment 224.15 350.50 372.39 S Segment 1,192.06 4,636.31 5,761.68
Space saver spare wheel 53.92 86.34 113.86 B Segment 83.46 43.41 80.63 C Segment 50.00 860.00 114.02 D Segment 50.00 56.43 116.92 E & F Segment 76.71 165.45 J Segment 99.60 127.34 M Segment 76.32 95.75 S Segment 260.00 273.60 296.92
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Spare wheel 176.96 131.02 152.98 B Segment 61.76 47.08 83.61 C Segment 52.26 93.55 110.60 D Segment 99.65 79.02 125.13 E & F Segment 811.60 399.14 176.96 J Segment 595.86 559.59 334.13 M Segment 81.16 131.63 S Segment 855.96 252.98 296.92
Special Paint 1,211.23 1,297.20 1,024.07 B Segment 403.73 386.59 460.27 C Segment 964.29 1,320.82 606.48 D Segment 1,346.05 1,187.05 870.25 E & F Segment 1,434.72 1,440.35 1,869.82 J Segment 980.21 1,324.65 M Segment 366.15 493.23 S Segment 1,102.21 1,783.78 2,656.21
Sports seats 940.85 1,495.50 1,218.60 B Segment 1,118.54 302.82 855.80 C Segment 1,392.40 1,391.00 1,599.18 D Segment 735.49 1,460.65 760.37 E & F Segment 755.21 1,126.30 786.05 J Segment 714.71 2,847.11 1,144.97 M Segment 1,437.34 758.02 970.43 S Segment 806.27 1,319.32 1,567.92
Steel wheels 216.17 117.37 309.43 B Segment 208.39 150.00 J Segment 98.53 50.00 M Segment 241.50 336.00 S Segment 375.00 375.00
Steering wheel mounted controls 271.26 482.33 224.28 B Segment 240.00 182.21 230.97 C Segment 313.54 730.11 191.41 D Segment 262.61 257.38 155.64 E & F Segment 195.67 200.89 245.53 J Segment 145.19 683.96 195.83 M Segment 309.79 329.84 315.08 S Segment 110.00 163.98 388.60
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Steering wheel rake adjustment 478.51 275.52 347.12 B Segment 85.00 D Segment 1,020.00 200.00 E & F Segment 398.49 295.00 379.41 J Segment 344.41 400.00 M Segment 110.56 100.00 600.00 S Segment 345.00 295.00 365.00
Steering wheel reach adjustment 659.06 234.93 347.12 B Segment 300.00 D Segment 1,020.00 200.00 E & F Segment 398.49 295.00 379.41 J Segment 295.00 400.00 M Segment 200.00 112.55 600.00 S Segment 345.00 295.00 365.00
Telephone 1,015.37 514.07 577.47 B Segment 908.53 295.00 C Segment 1,012.14 467.03 D Segment 984.89 485.49 E & F Segment 901.48 606.63 639.86 J Segment 804.48 634.16 628.17 M Segment 1,320.70 402.10 S Segment 963.22 643.25 502.72
Traction control 525.66 504.57 733.00 B Segment 355.63 348.28 C Segment 595.47 368.75 D Segment 479.26 365.00 E & F Segment 764.82 1,631.30 1,785.00 J Segment 360.00 M Segment 569.71 449.57 470.00 S Segment 595.65 845.77
Trip computer 1,164.25 766.70 190.93 B Segment 833.38 194.44 212.92 C Segment 1,345.29 1,098.02 111.52 D Segment 1,100.67 627.48 237.03 E & F Segment 927.04 120.00 J Segment 416.51 120.00 120.00 M Segment 886.53 160.57 295.00 S Segment 1,402.68 928.81 120.00
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 TV 2,325.03 802.00 1,062.95 B Segment 2,880.00 735.00 C Segment 2,455.47 D Segment 2,301.12 740.60 860.04 E & F Segment 2,430.55 821.99 1,296.60 J Segment 2,272.31 840.31 1,140.00 M Segment 1,396.02 1,500.00 S Segment 2,244.41 856.66 1,002.61
Tyre pressure monitor 252.35 177.41 177.16 B Segment 185.57 C Segment 221.72 78.99 D Segment 207.18 142.34 135.00 E & F Segment 408.14 157.48 J Segment 404.41 243.49 125.00 M Segment 202.68 425.07 S Segment 230.85 218.83 930.00
Tyre repair kit 63.42 635.65 1,249.88 C Segment 75.00 645.00 D Segment 75.00 400.00 E & F Segment 1,955.00 4,235.00 J Segment 805.00 1,220.36 M Segment 95.18 600.00 1,514.69 S Segment 50.00 165.00
USB/iPod interface 413.79 486.20 B Segment 227.53 269.59 C Segment 358.08 476.07 D Segment 529.94 462.14 E & F Segment 422.54 357.29 J Segment 419.12 623.23 M Segment 738.36 600.73 S Segment 243.94 486.61
Xenon headlights 675.40 739.81 792.69 B Segment 424.58 483.26 493.66 C Segment 617.73 714.15 755.43 D Segment 671.22 753.44 903.44 E & F Segment 720.24 934.39 1,016.72 J Segment 1,085.13 927.75 633.04 M Segment 590.11 713.58 1,076.50 S Segment 677.51 698.29 782.37
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6) Appendix ii) Mean Cost Option Analysis: Light Commercial Vehicles - Segment coverage N1: Class I,II,III
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Mean option cost (£ GBP) by generic cost item for each vehicle segment: Light Commercial Vehicles
The following tables provide the mean option cost of key manufacturer optional equipment at three date points.
Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 ABS 612.55 1,164.37 Class I 431.19 368.00 Class II 552.60 Class III 655.31 1,293.12
Air conditioning 962.77 944.54 972.27 Class I 631.06 663.25 707.02 Class II 890.11 765.50 807.93 Class III 989.05 965.26 987.86
Alarm 384.07 263.25 363.15 Class I 252.06 194.55 221.79 Class II 298.64 195.38 255.48 Class III 405.76 268.87 372.42
Alloy wheels 512.88 618.72 782.23 Class I 376.27 617.09 511.98 Class II 495.45 456.70 632.41 Class III 517.17 627.11 803.73
Audio remote control 937.30 436.05 636.31 Class I 281.61 235.63 60.00 Class II 467.59 274.43 280.84 Class III 1,017.77 445.49 759.04
Bulkhead 229.87 287.72 238.55 Class I 94.18 92.81 85.82 Class II 120.43 118.16 141.83 Class III 244.54 309.30 252.44
Cargo area lining 217.48 257.94 281.74 Class I 58.75 45.38 46.13 Class II 144.41 76.97 82.20 Class III 222.27 263.84 298.16
Central locking 299.64 74.75 267.30 Class I 323.12 74.75 248.62 Class II 279.36 308.40 Class III 302.23
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Climate control 1,661.13 1,410.08 1,140.05 Class I 700.30 875.42 528.00 Class II 1,219.00 1,046.06 Class III 1,670.01 1,455.54 1,159.02
Cloth seat trim 166.36 202.71 108.49 Class I 99.02 Class II 167.56 108.74 42.00 Class III 166.15 206.86 110.48
Deadlocks 293.75 195.60 118.93 Class I 293.75 92.33 60.00 Class II 293.75 214.37 110.94 Class III 241.50 156.00
Drivers airbag 503.70 449.73 553.83 Class II 544.59 576.67 Class III 499.20 449.73 553.65
Electric door mirrors 189.37 234.66 185.81 Class I 129.38 208.14 126.98 Class II 175.66 205.23 169.50 Class III 192.16 237.36 188.77
Front electric windows 230.06 579.44 392.97 Class I 194.00 97.94 184.55 Class II 201.30 402.62 711.21 Class III 239.81 688.23 316.00
Front fog lights 115.10 282.93 352.70 Class I 103.37 108.45 112.93 Class II 108.13 207.47 224.49 Class III 116.97 289.14 362.04
Glazed rear doors 176.83 218.59 256.22 Class I 217.07 115.18 105.07 Class II 123.39 155.18 159.84 Class III 177.55 225.10 268.88
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Headlight washers 224.95 209.19 561.61 Class I 189.75 1,008.00 Class II 253.56 132.25 144.37 Class III 222.60 210.12 584.75
Heated door mirrors 161.22 312.89 191.29 Class I 130.35 192.74 168.00 Class II 145.74 386.98 206.48 Class III 164.10 308.44 188.75
Height adjustable driver’s seat 422.76 282.37 318.37 Class I 91.14 246.10 279.00 Class II 185.50 105.84 170.41 Class III 431.58 284.88 322.98
Immobiliser 355.11 Class III 355.11
Lashing points 347.80 161.62 247.35 Class I 23.00 39.60 Class II 347.80 Class III 166.75 248.92
Leather seat trim 93.44 233.98 140.50 Class I 375.00 34.50 72.00 Class II 23.00 65.88 Class III 91.42 237.78 144.29
Metallic Paint 502.30 488.40 691.96 Class I 274.56 338.99 363.01 Class II 377.76 377.18 416.81 Class III 548.08 503.83 730.49
MP3 player 265.00 825.51 466.59 Class I 265.00 523.86 198.49 Class II 470.60 341.74 Class III 1,047.12 514.39
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Navigation system 1,633.41 1,447.92 816.86 Class I 916.25 1,356.23 96.00 Class II 1,531.07 1,062.57 436.91 Class III 1,658.20 1,466.89 875.84
Part leather seat trim 195.26 Class III 195.26
PAS 420.00 Class III 420.00
Passenger airbag 554.84 361.39 376.01 Class I 265.42 183.86 157.89 Class II 379.31 297.14 231.15 Class III 588.96 374.77 393.38
Pearlescent Paint 690.79 597.43 570.35 Class I 288.02 360.63 456.00 Class II 545.00 369.37 455.67 Class III 790.42 645.99 590.79
Radio 305.50 434.09 Class I 305.50 156.00 Class II 305.50 280.34 Class III 436.86
Radio/Cassette 211.17 113.85 Class I 206.28 113.85 Class II 199.44 Class III 225.00
Radio/CD 831.90 944.58 457.96 Class I 421.76 748.83 198.49 Class II 694.28 824.69 393.86 Class III 881.58 950.60 477.83
Radio/CD Multichanger 380.37 320.20 Class I 333.50 Class II 822.78 267.92 Class III 331.11 320.63
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Remote central locking 565.75 140.15 208.72 Class I 176.25 105.96 240.00 Class II 574.51 521.00 216.50 Class III 564.86 106.93 207.68
Roof rails 378.07 243.96 160.19 Class I 149.23 169.09 139.78 Class II 149.23 126.50 157.72 Class III 393.63 250.85 262.15
Service indicator 204.00 Class II 204.00 Class III 204.00
Side loading door - near side 307.52 517.49 598.55 Class I 378.45 269.90 373.98 Class II 292.17 189.92 308.00 Class III 294.42 546.21 612.61
Side loading door - off side 360.02 458.71 589.88 Class I 489.16 281.65 288.52 Class II 336.13 278.13 272.61 Class III 358.94 470.68 612.61
Solid Paint 484.31 374.45 542.50 Class I 205.55 353.79 Class II 310.65 270.14 520.31 Class III 516.11 385.38 542.78
Solid rear doors 446.63 309.92 313.52 Class I 193.88 Class II 272.16 172.50 276.00 Class III 463.14 312.17 314.75
Speed limiters 86.50 86.80 99.53 Class I 170.89 71.58 Class II 82.25 105.35 104.39 Class III 87.04 84.96 99.40
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Mean Option Cost (£ GBP) Segment 23/11/03 23/11/09 23/11/15 Steel wheels (Size upgrades) 115.23 149.10 Class I 75.57 Class II 164.21 149.71 Class III 148.83
Steering wheel rake adjustment 83.43 101.97 Class I 102.00 Class III 83.43 101.97
Steering wheel reach adjustment 83.43 101.97 Class I 102.00 Class III 83.43 101.97
Traction control 320.53 543.34 580.21 Class I 318.06 Class II 271.99 386.65 600.00 Class III 340.38 578.80 577.32
Vinyl seat trim 78.70 33.86 45.01 Class I 35.25 40.25 Class II 63.20 38.86 53.32 Class III 88.12 33.40 43.79
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doi:10.2834/235371