Auto Dealers Predict Greater Profit Margins with Sales of XENON Lighting as Standard Safety Equipment

New Study Predicts that Enhanced XENON Sales Training and On-Lot Availability Will Contribute to Greater Profits

HILLSBORO, N.H., May 31 -- A new study finds that automotive dealers who use XENON or High Intensity Discharge headlights as a selling feature stand to increase profits with the sale of this technology. Increased profit margins are probable if the lighting technology is sold as standard equipment, and it is effectively positioned as a safety benefit to a wider range of drivers.

These findings stem from new research conducted by Brand-Aid Consulting of Wrentham, Mass. Brand-Aid polled automotive sales people at new car dealerships that sell XENON equipped vehicles in the US.

The study reveals that sales staffs' awareness of XENON lighting's advantages is high. They also show that, when offered as standard equipment, sales staff have little difficulty for making the case that more light on the road makes for safer night time driving. When XENON headlamps are not standard equipment, however, the study shows both challenges and opportunities in selling the technology and its benefits.

Current Challenges

Almost half of the sales people (48 percent) responded that they have not received formal training on XENON headlights. Forty six percent confirm that this leaves them without answers to some of the more challenging questions consumers can pose.

"The report has shown us that OSRAM SYLVANIA needs to support our OE customers in the development of training programs and tools that allow dealership sales staff to promote the benefits of XENON technology to all customers," said Matt Blewett, XENON Product Manager at OSRAM SYLVANIA.

On-lot availability of XENON-equipped vehicles is also hindering consideration. Just under half (45 percent) of sales people queried do not try to up-sell XENON when offered as an option because there are few cars available with the technology, coupled with the pressure to sell in-stock vehicles.

The fact that XENON headlights are often bundled with other optional equipment packages is also seen as a barrier by sales staff, with 71 percent stating they would be more successful in selling XENON headlights if sold as a 'stand alone' option.

Opportunities: Selling Safety

Where dealers anticipate success in selling HID lighting is in its repositioning as a safety technology. Ninety-seven percent of those polled said explaining the technology's safety benefits, versus a luxury or styling feature, will help broaden XENON's appeal in an already safety-conscious market.

"We've long touted the various safety attributes of XENON lighting," said Blewett. "The technology provides its owners with 70 percent more light on the road, increasing visibility of many peripheral objects left in the shadows by standard halogen lighting. XENON provides the best illumination available and is considered the benchmark against which other forward lighting technologies are measured."

According to OSRAM SYLVANIA, annual US sales of XENON equipped vehicles have well surpassed the one million mark. The full potential, however, based on car models for which XENON tooling has already been developed, puts this number at just under four million units. Establishing these sales would generate additional dealership revenue of approximately $500 per vehicle. At the same time, this will allow the manufacturers to better profit from their XENON tooling investments. As dealerships and manufactures benefit financially, consumers win through greater access to lighting technology that enhances safety.

"Repositioning XENON as a safety technology will allow these headlights to be applied to more mainstream vehicles. While dealerships prefer XENON to be sold as a stand alone option, the study confirms that if XENON is to be bundled, it belongs with other safety enhancing features," said Blewett. "When dealerships have XENON equipped vehicles on their lot, tools and trained personnel to promote them, informed customers will stand to benefit strongly. But the dealers need to initiate the conversation."

About OSRAM SYLVANIA

OSRAM SYLVANIA, together with OSRAM GmbH, is the world leader in automotive lighting for original equipment manufacturers (OEMs) and the aftermarket. The company's global automotive lighting division has its principal North American operations in Hillsboro, N.H., with nearly 1,000 employees. In addition to TS 16949, this facility has also achieved ISO 9001 and 14001 certifications. Automotive Lighting designs, develops, manufactures and markets state-of-the-art automotive light sources, including auxiliary, advanced halogen, LED and high-intensity discharge lighting for interior, exterior and forward lighting applications. Over 400 lamp types are produced for cars, trucks, and electronics in facilities throughout the U.S., Europe, and Asia. Automotive applications for OEMs are marketed under the OSRAM brand while products for the aftermarket are sold under the SYLVANIA brand.

OSRAM SYLVANIA is a leader in lighting solutions and specialty products that feature innovative design and energy saving technology. The company sells products for homes, businesses and vehicles primarily under the SYLVANIA brand name, and also under the OSRAM brand. Headquartered in Danvers, Mass., OSRAM SYLVANIA is the North American operation of OSRAM GmbH, a wholly owned subsidiary of Siemens AG. For more information, visit www.sylvania.com.