Updated: Mar 23
You just bought yourself an expensive looking European Car, brand new furnace or perhaps just a new TV at a good price. Then after two years , 36 months or just long enough where the factory warranty runs out you suffer a breakdown. As it is with these things it always comes in the most inopportune moment . Furnace breaks down its -5 degrees outside , car breaks down when furthest from home TV won't turn on when the big game is on.
Manufacturers did reach the peak of efficiency with legendary reliability way back in the 1980s. However something strange happened. With this remarkable excellence the sales of new goods started dropping .With the exception of Jay Leno , most people only need one car per person. Even with teenagers crashing their cars the demand would still not be met as people kept their cars until they rusted out. Same goes with furnaces , stoves , TVs and other items. One can increase the features but that can only get you so far without going over the R&D budget. Not to mention in a hyper competitive world all the R&D investment won't necessarily mean the product will catch on even if it is brilliant. Just ask about Laser Disc , Beta Max tape, HD-DVD , Windows Phone. All were brilliant products but they all lacked the much needed secret sauce to survive. For the laser disc the timing was wrong discs needed to be flipped half way and the disc was vinyl record sized when the world started embracing the ease of tape players . For the Beta Max, they were the superior quality over the VHS, however the Long Play feature was much desired to a certain industry over quality as their releases were focusing on quantity at that time. For Windows Phone finally Apple invented the concept of a modern smartphone with apps , while Android already flooded the marked with cheap smart phones , millions of free apps . It didn't matter that Android was a battery draining hog and Windows was able to perform better with less. They just missed the boat at that moment the only thing that could have saved them was an Intel Based Windows phone where you plug it into a a docking station that an the Microsoft marketing department seems to be the most ineffective department of any company in this man's opinion as people Still don't know Microsoft Surface Duo exists.
So how to gain more sales in a short amount of time without gambling on new features?
Adopt technologies everyone already wants in a focus group. What about that expensive R&D department? They are put to a good use. They Research how long each material used lasts and then they give the corporate departments the data on how expensive each part is , how long it is going to last . Then "The Suits" decide on how to stagger the part "life cycle" after the warranty expires. So water pump in a BMW 3 Series? 80,000 miles? Your power train warranty only covers 60,000 miles? Bummer! At least the part is somewhat affordable at around $250. Hold on there Sparky. You need to buy a thermostat as that is part of the kit , hoses and new coolant. So $500 please. Cash or Credit? There you go its in the bag now ready to go. You must be a brilliant man to put you car up on jacks , go under that car , spend at least an hour removing the plastic followed by another hour or two fumbling around to replace the part, the fluids and putting the plastics back. Of course you need to buy the jacks, the tools not to mention not wanting to freeze while you change the part or the difficulty might just be too much. So opting to go to the mechanic who will use dealer prices will set you back $600 for parts , 3 hours of labor at $150 if the mechanic is on the cheap side or likes you puts you at $1050 and Uncle Sam has yet to make an appearance. Going to the dealer will cause these price to probably triple , not to mention other stuff they will find. So after absorbing Two to Three of those kind of repairs you will break down and buy a new Car, so mission accomplished.
These companies may think they've won. There are a few things that pop up as a result though.
Consumer confidence drops causing them to be "fed up" and running to your competitors.
While BMW think they have nothing to worry about as Audi and Mercedes are just as bad, they need to think again. All roads go to Lexus eventually not to mention Tesla is gaining traction as a luxury car brand and there's less to change and those batteries will last eight to ten years before needing a change. Cars and some electronic companies have a tribe so the change can be reluctant. If you are a furnace or printer maker you are even more vulnerable.
It may cause long term damage to the brand.
I'm not picking on BMW in particular here , however the Italian car companies are a cautionary tale here . Lancia's rust problems in the UK caused the brand to cease operations there as all people thought about was rust when it came to Lancia even though the underlying problem was fixed. Reliability Problems in Fiat and Alfa Romeo cause the brands not to be exported to North America at the dawn of the 1990s. Fiat tried to make a comeback in the 2010s only to faze out by the end of the decade largely due to not learning their previous lesson.
What can be done?
Better quality assurance
Engineer Managers need to grow a spine and set realistic goals for their projects. Focus on putting out the best product out there . Maintain realistic deadlines as rushed product leads to mistakes and breakdowns. Lastly the Quality Assurance department needs a larger role. It can be done just look up TOYOTA QUALITY CONTROL AND A BEST PRACTICES COMPLIANCE PROGRAM. Toyota's British website even details the process every car takes before leaving the factory. Frankly how many 10, 20 or 30 year old Toyotas do you still see driving well versus other brands? Really ponder that for a minute.
Less product , but more quality . Simple
Just look to GM in the last 20 years. Sometimes they didn't even bother changing the design they slapped four different badges on the same car , done five different engines , all equally bad and complicated. In the case of GMC Denali versus Cadillac Escalade different logo and stitching on the seat is at a $20,000 up charge. Japanese manufactures aren't immune either. Nissan offers six different SUVs 3 occupying the same segment. Why? Cut six to three each with additional trim level and focus on making those CVT transmissions work .
What can a regular consumer do?
The contents of your almighty wallet is a sole motivator . Do your research and "invest" in brands that have you best interest at heart. Brand loyalty needs to be earned and kept. Don't hang on to a brand due to its past. Think of the present and the future.