Spoilt for choice

Three engines, five gearboxes, nine trims offered up in a combination of 19 variants, and that’s not even counting colours. That’s the number of options you have if you’re considering a Hyundai Venue. Spoilt for choice for sure, but is there such a thing as too much choice? Like the Laffer curve, which tells us that, beyond a point, too much taxation can lower tax collection, or the converse, where reducing taxes can also increase revenue, I believe there exists such a point for choices and car buying too.

Beyond a point, too many options can be counterproductive for both seller and buyer. As a manufacturer, you’ve got to track supply of multiple components, and possibly from multiple suppliers too. It also adds complexity to your parts inventory and supply chain, and then there’s the added cost of training service manpower in different systems and tech. Too many different components can also mean a lower economy of scale, potentially reducing profit margin. And then, of course, there’s the massive task of predicting the sale of these versions and getting the production mix just right. 

But, if it all adds up to customer satisfaction, it’s worth it right? Not really. The thing is, beyond a point, it gets all too confusing for a consumer too. Petrol or diesel, manual or auto, which kind of automatic, a higher variant or a lower one? It can be daunting, and for a few consumers, enough to drive them away to other pastures with simpler choices. Take a look at Maruti. Yes there is a strong brand pull at play, but the Vitara Brezza has just one engine, two gearboxes, four trim levels in a total of just 7 variants; that’s it. Compare that to 19 on the Venue. Sure, the Brezza has just the petrol engine, but even on other models Maruti offers limited options in terms of powertrains and trims and, consequently, total variants.

And customers don’t seem to mind. In fact, with multiple engines, gearboxes and trims, leaving out certain combinations then stands out as a sore point for consumers. Like why is there no diesel-auto in the Venue, or why is the 1.2 petrol limited to just the low-end trims. And I’m not making these up; these are genuine queries received at dealerships. So, having too many blocks and then trying to control the magnitude of permutations and combinations introduces more pain points. 

So while I love choice and options, I do think for both manufacturers and customers alike, it’s best to figure out what that tipping point is. Yes, the Laffer curve does exist for car buying and choices too. The challenge and reward is there for those who draw it just right.

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