Achieving Automotive Pricing Excellence – A Case Study on How Price Analysis Helped a Client to Improve Sales Margin by 70%

Achieving Automotive Pricing Excellence – A Case Study on How Price Analysis Helped a Client to Improve Sales Margin by 70%

5 Major Automotive Industry Trends That May Surprise You

The global automotive industry space has witnessed drastic evolution post-2017, with several mind-boggling advancements in technology. The traditional vehicles earlier equipped with basic features have now transformed into connected cars with more advanced features such as big, data, cloud computing, and the Internet of Things (IoT), among others. Such factors will not only enhance the user experience but will also make a huge impact on the supply chain and change the very approach used for automobile manufacturing. Here are the top 5 automotive industry trends:

  • The evolution of technologies such as vehicle-to-grid (V2G) and vehicle-to-everything (V2X)
  • Truck Platooning
  • The connected vehicles and the vehicle as a hub revolution
  • Usage-based insurance for vehicles
  • Use of car health monitoring systems

With such advancements and the upcoming automotive industry trends, the automotive industry in Michigan is poised to shift its focus toward platform-based services, enhanced products for electrification, and increased level of automation. Also, these innovations will not only help automotive industry players to enhance the end user’s experience but will also drive sales.

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Client’s Profile

The client- a leading player in the automotive industry in Michigan. According to the US automotive industry statistics, the client is one of the leading automakers in the world.

Predicaments Faced

Although the automotive industry player wielded considerable market expertise, they lacked appropriate market knowledge and data-driven tools required to make optimized pricing decisions. Several factors contributed to the clients’ pricing problems. The client adopted a cost-plus approach and leveraged competitive pricing to tackle their problems, but they did not consider the customers perspective.

Owing to such improper price structures, several cars stood unsold and the manufacturers failed to realize the full potential of the vehicle. As a result, the client resorted to additional incentives and discounts to move the vehicle, which only resulted in loses. The automotive industry player collaborated with Infiniti Research to leverage its expertise in price analysis and develop suitable pricing strategies.Request Proposal

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Our Approach

In the midst of an increasingly competitive market, automotive industry players agonize over every penny when pricing a vehicle, but give away billions of dollars in the form of incentives and margins to sell it.  Our intelligence-driven price analysis solutions illuminated the status quo of global automotive pricing and how the automotive industry in Michigan can outperform it. By conducting in-depth market surveys & interviews with key stakeholders in the industry, our price analysis experts went on to determine the accurate price of the products and services. A detailed assessment was then conducted to determine if it set price meets the customer’s expectations.

Business Impact

Based on our price analysis solutions the automotive industry client successfully developed a differentiated and dynamic approach to pricing, defined by customer expectations. The price analysis solutions also empowered the client to enhance their price structure, improve transparency, and reduces incentives and discounts to drive profits. By embracing the new price analysis approach the automotive industry client was able to optimize vehicle packaging and configuration decisions, with a specific focus on avoiding unnecessary discounts. This not only helped them achieve optimal pricing but leveraged their sales margin by 70%. Furthermore, with the help of price analysis the client was able to:

  • Redesign channel and margin structure
  • Create customer-centric list prices
  • Optimize discounts and transaction prices

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