WLTP: less factory options, more accessories?

WLTP could push customers to limit the number of options they order, as they have an impact on the car’s CO₂ emissions and hence tax liability. That is bad news for OEMs, for whom extras generate much needed margin. Moreover, complex type approval procedures prompt manufacturers to streamline their offer.  

We asked Christof Engelskirchen, Managing Director Consulting & TCO Solutions at Autovista Group, how OEMs will adapt their strategy in the face of the equipment challenge.

How are options measured and what is their impact?

Christof Engelskirchen: “Contary to NEDC, WLTP is now adequately capturing every option’s contribution to CO₂ emissions. It is a question of weight, drag and energy consumption. We analysed a popular D-segment premium brand choice amongst fleet buyers: typical equipment drives CO₂ levels up by 14 g/km, i.e. 9 percent.”

Which options increase CO₂ emissions significantly?

Christof Engelskirchen: “A tow-bar, for instance, can increase CO₂ emissions by 1-2 g/km. A panoramic roof generates a similar effect. Bigger tyres increase rolling resistance – fitting 18” wheels instead of 17” adds about 2 g/km. It is therefore easy to see how a combination of options can add up to make a difference to the emissions profile of a car and, in turn, its tax liability.”

Will we see a rationalisation in OEMs’ option strategy?
Christof Engelskirchen: “Given the additional challenges in gaining WLTP type-approval for all model variants, the additional complexity for consumers and dealers, and the high costs in managing the complexity from a production perspective, OEMs are looking to consolidate their optional equipment offerings. There are clear signals from several volume brands to consolidate their equipment strategy. Premium brands may follow a bit later as individualisation has been such an important USP for them.”

Won’t customers turn to retrofit accessories instead of factory options to avoid higher taxes?
Christof Engelskirchen: “That could be the case. WLTP does not test dealer-fit accessories and this may incentivise dealers to offer easy to install items like tow-bars as a retrofit equipment rather than as a factory option. There should not be too much emphasis put on this by OEMs as they would be ill-advised to try to bypass WLTP by following this route in the current political and societal climate.”

You may also be interested in Fleet Europe's  video "WLTP: 7 questions and 7 answers" and "WLTP, NEDC, NEDC correlated, RDE: what's it all about" to find out how WLTP impacts company car drivers, fleet managers, OEMs and leasing companies.

Christof Engelskirchen, Managing Director Consulting & TCO Solutions at Autovista Group (picture copyright: Autovista Group, 2018)