$30,000 is the new luxury-car hot spot

[ne_one]

$30,000 is the new luxury-car hot spot
Automotive News
January 21, 2013

There's a new price battleground -- $30,000 -- for luxury-car makers as they chase younger buyers with small front-wheel-drive vehicles that are sliding down into mass-market territory.

Mercedes-Benz, BMW, Audi and others are going after the 75 million 30- to 40-year-olds who are forcing "the biggest changes the automotive industry will face," said Bernie Glaser, head of marketing for Mercedes-Benz USA. "They have big expectations for products and brands."

Those buyers cannot and will not pay the $40,000-plus sticker prices some of their status-conscious baby boomer parents can afford, industry researchers say. Yet they demand "attractive highly styled cars and the right technology," Glaser said.

Nonluxury brands are likely to feel the heat from new models such as the Mercedes-Benz CLA, which was shown to journalists just before the Detroit auto show.

The young shoppers targeted by Mercedes, BMW and Audi want fuel-efficient four-cylinder engines -- the engines most luxury brands shunned for the United States until two years ago -- without compromised performance.

Full article at link.

[germeezy1]

In other news we have seen a resurgence in the purchase , and sale of jumbo shrimp from strategic sites known about only via government intelligence.

[megeebee]

There's a new price battleground -- $30,000 -- for luxury-car makers as they chase younger buyers with small front-wheel-drive vehicles that are sliding down into mass-market territory.

One of the reasons I think that a car not unlike the XTS is a good idea for Cadillac.

Those buyers cannot and will not pay the $40,000-plus sticker prices some of their status-conscious baby boomer parents can afford, industry researchers say.

They will....eventually.

The young shoppers targeted by Mercedes, BMW and Audi want fuel-efficient four-cylinder engines -- the engines most luxury brands shunned for the United States until two years ago -- without compromised performance.

Exactly. All the members here that say RWD and V8's are the only acceptable foundation for a luxury car, please take note.

[sfbreh]

Exactly. All the members here that say RWD and V8's are the only acceptable foundation for a luxury car, please take note.

The RWD V8 crowd is the worst.

[KingElvis]

I think they might rue the day they started down this road - especially BMW and Mercedes. There was a time that Chrysler was a 'big' car. Then they started making cheaper smaller models. Now Chrysler means nothing. Similar thing could be said about Buick.

At first it works great - when you thin down the soup and start selling small versions buyers respond. Then a few years pass, and people see a bunch of Mercedes hatchbacks and wonder what all the fuss is about Mercedes. Sure it will work for a few years - and the many decades you've spent getting a high end reputation are erased.

[jld]

The whole target price point becomes nonsense when the actual cost of a well-equipped vehicle is $25K higher.

[ne_one]

I think they might rue the day they started down this road - especially BMW and Mercedes. There was a time that Chrysler was a 'big' car. Then they started making cheaper smaller models. Now Chrysler means nothing. Similar thing could be said about Buick.

Small is the new big so size isn't an issue. Chrysler and Buick experienced declining sales because they started peddling cars that were crappy.

I'm not convinced that brand dilution is an issue either. Those purchasing cars at the high end of the spectrum buy models that are exclusive and aspirational buyers leverage that association.

The real issue is market contraction. Manufacturers can't be all things to everyone.

[MechEng]

This is why Buick exists and where it needs to shine. I think Verano is proof of that.

[AMcA]

Defining luxury down.

[tombalas]

The RWD V8 crowd is the worst.

My 78 Caprice Classic Coupe with 305 V8 was RWD and only $6K new - THAT IS affordable luxury! (am radio, manual windows, manual locks, manual seats ....)

[62Lincoln]

There's another unmentioned reason why Mercedes and BMW are introducing these vehicles: future mpg requirements. They have no hope of hitting the mandated fleet mpg averages late in this decade without significantly improving their fleet averages, which they cannot do with their current lineups, thus the need for the smaller fwd vehicles with higher mpg.

The trick will be to convince enough people to pay the premium for a Mercedes or BMW that, in reality, isn't really much (or any) better than a mass market offering from GM, Ford, or Toyota (or VW). Thus we see marketing gobblegook about catering to the wants of certain demographics, when in reality BMW and Mercedes are trying to tell that demographic what they want in order to save themselves.

[AMERICA 123]

Outstanding.

- 'suggests' a ( very ) negative kind of comparison to 1989 - 1996.


In all ways possible ..... just about.

[KingElvis]

Small is the new big so size isn't an issue. Chrysler and Buick experienced declining sales because they started peddling cars that were crappy.

I'm not convinced that brand dilution is an issue either. Those purchasing cars at the high end of the spectrum buy models that are exclusive and aspirational buyers leverage that association.

The real issue is market contraction. Manufacturers can't be all things to everyone.

Buick had the "Special" for years before WWII so there was already some 'dilution.' I'm not talking about the 1980's but the early to mid seventies. That's when you first got a Buick Nova, soon followed by a quasi-Charger - the Cordoba - from Chrysler. Then they introduced the LeBaron which was even smaller and cheaper. Chrysler milked this formula very successfully for a few years.

As I said, at first the formula works great. Then people realize the MB name doesn't mean much anymore.

[The Kingsmen]

This is why Buick exists and where it needs to shine. I think Verano is proof of that.

I agree completely. This is where GM, not just Buick, could shine. To all those who squawked at their dual approach to luxury this shows the advantage of having both a top tier brand and a near lux one under the same umbrella.

As I look at Cadillacs revamped line up both now and near future, even including the Fwd based SRX and XTS, I'm reminded of what Sloan and Durant invisioned all those years ago, the shear brilliance of it all. It is also a stark reminder of the existence of blatant hypocrisy on theses forums, and more specifically here on GMI that a fwd, 4cylinder Mercedes based on the rather humble A- class gets a pass, yet if Cadillac did the same on say the Gamma platform (Sonic) I believe...GM would be said to be moving in the wrong direction. This portion of my comment is directed completely at Mgescuro and his inevitable excuse making for the Europeans doing exactly what I recalled him being against when the SRX was announced on Theta Premium. Make no mistake Benz and Bimmer have fwd CUVs in the pipe line as well.

[eaton53]

Sorry, can't buy a new luxury car for $30K.
You can buy a near-luxury car or a wannabe luxury car (a cheap car with a fancy badge).
But an actual luxury car? No way...