$30,000 is the new luxury-car hot spot
Lowering the bar to woo not-quite-rich under-40s
Diana T. Kurylko
January 21, 2013
DETROIT -- 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...
..."They could eat into the mass market," said IHS Automotive analyst Rebecca Lindland. "A $30,000 Mercedes -- and they will cap the car at $35,000 -- is an incredibly competitive price point, even against the higher-end Honda Accord."...
...While BMW says the average 3-series buyer is 46, the 320i will appeal to 30- to 40-year-olds, said Victor Leleu, 3-series product manager.
"They want the 3 series, and it is a hard car for people who are in their first job to attain," he said...
...Still, outsiders wonder whether a $30,000 Mercedes-Benz will damage the brand's image. Mercedes-Benz USA CEO Steve Cannon answers: "The only way to dilute the brand -- just ask Jaguar about the X-Type -- is to do it wrong. That is why we held Stuttgart off for many years and said we will not bring the [first-generation] A and B class because those vehicles did not fit the Mercedes-Benz brand. They were small, boxy and utilitarian."
He says a bigger danger than brand dilution is not bringing new buyers into the brand...
..."You can de-content too much," (said John Mendel, executive vice president of American Honda Motor Co.). "I don't know if people buy a brand because it's de-contented -- if it's Cartier but it's not real silver," he said. "There's a lack of genuineness if you err on the side of being the Ferrari of Costco."
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