Product variety: an auto industry analysis and a benchmarking study

Abstract

PurposeThe purpose of this paper is to develop a product variety multi‐market study in the auto industry and to conduct a benchmarking analysis of the practical findings against the theoretical ones obtained in a European Community Research Project (Intelligent Logistics for Innovative Product Technologies – ILIPT) that aims to rethink the automotive supply chain.Design/methodology/approachThe authors conduct an exploratory research including an empirical multi‐market study, which embraces many significant passenger car models from a global vehicle manufacturer in relevant automotive markets. To provide a rich dataset, the authors utilize a combination of data collection techniques including interviews, contextual performance data and a detailed analysis of product offerings available from the vehicle manufacturer's regional web sites. This paper also shares the experience of a European Community Research Project benchmarking the results for the automobile industry.FindingsIn this paper, product variety in the auto industry is classified into four general categories. The empirical results suggest that the platform (most aggregated form of variety) follows the same logic worldwide while all the other product variety categories (in particular variants) are restricted in emerging markets and very refined in Europe. The benchmarking shows that the European variety offered exceeds the “appropriate” level of variety considered best in class by the ILIPT project while the emerging countries variety offered is below this level. This fact points to space for improvement in the product variety management of both supply chains.Originality/valueThis is a valuable empirical research study that examines the current behaviour of the auto product variety in significant markets and gives an overview where the variety is created world wide. A benchmarking analysis is also offered, which gives an idea of how far vehicle manufacturers are in terms of providing the “appropriate” level of variety.