Ford targets leather-lined success
29 January 2013, 14:49
Detroit - Luxurious interiors are becoming a top factor in luring car and truck buyers while increasing profit margins for automakers.
In fact, According to the Detroit News, reliability takes a back seat to interior design among consumers.
A recent J.D. Power & Associates survey found a greater percentage of consumers will buy an unreliable vehicle than one with an interior design they perceive as unattractive.
Ford design manager Susan Sage, with leather supplier Leo Trevino, says, “I think the customer now is really accepting the price point for the leather.” Luxurious interiors are becoming a top factor in luring car and truck buyers, and increasing profit margins for automakers.
It's all in the name of profits. Dominique, a former Nissan Motor Co. executive says, leather-wrapped interiors and ambient lighting can provide automakers a profit margin boost of four to six percentage points.
PURSUIT OF PLUSH
"The luxury brands used to be the ones with leather and a lot of features," he said. "The challenge is to bring more content standard. If the automakers can't price for it, they are going to lose profitability."
But for automakers, the more offerings they present consumers, the more consumers are willing to pony up the extra money -particularly leather.
Automakers are so intently focused on interior options that company and supplier executives say they'll cut elsewhere if they need to shed overall cost.
That fact is particularly intriguing as the U.S. economy faces continued instability and with the recent expiration of the payroll tax holiday, which cuts Americans' take-home pay by 2% or the equivalent of thousands of dollars over the lifetime of vehicle ownership.
But Ford CFO Bob Shanks doesn’t seem to think sales will be affected too badly by this:
"I think for the average consumer… they've allotted for that (tax increase)."