Compact and fuel-efficient vehicles are becoming more prominent in the minds of consumers as fuel prices continue to be on the rise. However, car manufacturers stand to incur losses on developing such vehicles as conventional SUVs and trucks have a larger profit margin. To blunt these effects, manufacturers are increasingly relying on high-end design to save their bottom lines. Consumers not only strongly consider the design of a car to be important, but they also consider how much car insurance coverage is required.
What Consumers Want
It has always been true that car manufacturers have enjoyed higher profit margins on large cars like sport utility vehicles, trucks, and vans; it has also been the case that these manufacturers make large profits on edgy sports cars. But what happens when the large cars require too much fuel, and the sports cars emit too much carbon? Increasingly budget-conscious consumers opt for low-margin compact cars.
To combat the low profit margins on their fuel efficient models, car manufacturers are increasingly making cars with futuristic, cutting-edge designs. They know that, while consumers are primary in the market for a fuel efficient vehicle, they’ll spend extra money of that high-efficiency vehicle has raw curb appeal and a design that sets it apart from other, more bland models.
Such is the case with BMW’s “Mini” brand of vehicles. They command a far higher price point than similar, generic models from other manufacturers on account of their unique design and curb appeal. There is simply nothing else that looks like a Mini, and it’s considered a status symbol to have on in the garage or on the street. BMW has capitalized on the increasing consumer perception that a world of fuel efficient vehicles is differentiated more by what’s on the outside than what’s on the inside.
Eliminating Generic Cars
It has long been the case that automotive design operated in a sort of “herd mentality.” Cars from certain decades all look the same — boxy, curvaceous, or otherwise. Consumers have long been fed up with manufacturers who produce cars with distinct names and features, but without any distinct identity. Failing the logo on the front of a car, it’s easy to confuse an imported Toyota with a domestically-produced Ford vehicle.
Manufacturers have finally given into this pressure from consumers; they’re starting to challenge their designers to produce designs that are not only cutting edge and margin-increasing, but also unique to their brand. It’s a challenge that harkens back to the “golden era” of automobiles in the 1950s and 60s, when cars from each manufacturer were distinguishable on the road by their unique features and design elements.
Increasing Importance
The increasing importance of design has implications on consumers as well as the companies who supply them with vehicles. The trend toward more compact cars doesn’t look to be subsiding any time soon, with fuel prices constantly on the rise. With smaller margins on compact cars, automotive companies will need to differentiate their designs and create mew market niches, or face real problems with profits and fiscal stability.
Consumers, more than ever, strongly considers the design of a car before purchasing. The era of a car’s internal design or mile-per-gallon rate being the determining factor in purchase have ended. The car must be innovatie and different from the rest, or else it won’t sell. The revolution has started and car companies must take charge.
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