NotQuite Luxury for the NotQuite Rich? - AutoNews

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$30,000 is the new luxury-car hot spot
Lowering the bar to woo not-quite-rich under-40s
Automotive News
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."


Read more: http://www.autonews.com/article/2013...#ixzz2Ie8ywgh0

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cc from GMI

Even forgetting for a moment Mr. Mulally's oft-stated goal of Lincoln being on equal footing with the usual German/Japanese names... ...Lincolns will be luxurious vehicles, but they won't be Luxury vehicles.

...Imho the Germans are coming close to abandoning their reputations/DNA's in pursuit of more "nice markups", esp on smaller packages; so the difference between them and Lincoln could be shrinking from the other direction...

[SP1966]

cc from GMI

I think Lincoln is being positioned into the emerging/changing market and that has been hard for those of us accustomed to the current market to understand. I have said here before that Lincoln using Ford platforms may not be typical of their Luxury car competition, but it will be as the expenses continue to increase, yet the customers continue to expect more for less given the value they can get from lesser brands.

If you think back to when the MKS was a concept Lincoln asked on their website/Facebook(?) what do you want from it, one of the specific questions was V8 or twin turbo 400hp V6. Back then most would have said V8 hands down. But looking at how the market has emerged we're seeing even the big luxury brands downsizing their engines, thus Lincoln/Ford was ahead of the game while at that time appearing to be lagging.

I really see the fact that the big luxury brands are reaching lower into the luxury scale, into an area where Lincoln has been focused is going to again show that they were ahead of the game, not simply aiming to low. In other words, had they aimed where Audi/Merc/BMW were they would have missed where they will be when the Lincoln models come to market.

If they execute on the production MKC as well as the concept then I believe Lincoln will be primed to be a player in a market that everybody is moving towards. The big difference is that while many are moving down into that market, Lincoln by virtue of its sub-par recent past is moving up into it.

In spite of all my questioning of the wisdom of those who are in charge, the longer we go, and the more about both their plan for Lincoln and the changing market, leads me to believe Lincoln's future will be very bright. Better get some sunglasses!!

[Logans Run]

The big difference is that while many are moving down into that market, Lincoln by virtue of its sub-par recent past is moving up into it.

What we are still going to be dealing with is perception. Mercedes and BMW are the definition of luxury vehicles. It has been ingrained into the minds all generations alive today. Audi and Lexus are still a rung or two below, but they still have that cachet to their names. People know they offer large luxury or performance cars that people aspire to. People would buy a small vehicle from them and say "I own a BMW", and hope people believe they have a 5, 6, or 7 series. For someone buying an MKC, would they say "I own a Lincoln", and have people believe they own an old town car or 90's Continental?

Until Lincoln offers true luxury and performance vehicles, there will be no cachet dripping down to the compact class for them.

[Iiari]

...they still have that cachet to their names. People know they offer large luxury or performance cars that people aspire to. People would buy a small vehicle from them and say "I own a BMW", and hope people believe they have a 5, 6, or 7 series. For someone buying an MKC, would they say "I own a Lincoln", and have people believe they own an old town car or 90's Continental?

Until Lincoln offers true luxury and performance vehicles, there will be no cachet dripping down to the compact class for them.

Very interesting perspective and indeed likely true... Good point. This is Lincoln's battle. Cadillac has begun to change that and they're already 10 years into the process. Johan de Nysschen, the new Infiniti boss (and previously of Audi NA), has said publically that to get Infiniti to the point of MB or BMW will take 20-25 years and will require unique engines, interiors, exteriors, and design centers. And I think Infiniti is already ahead of Lincoln in this regard. We're talking 25-30 years for Lincoln. That's why I laugh when I read people say Lincoln's revival is dependent on the MKZ launch. Not quite...

[SP1966]

What we are still going to be dealing with is perception. Mercedes and BMW are the definition of luxury vehicles. It has been ingrained into the minds all generations alive today. Audi and Lexus are still a rung or two below, but they still have that cachet to their names. People know they offer large luxury or performance cars that people aspire to. People would buy a small vehicle from them and say "I own a BMW", and hope people believe they have a 5, 6, or 7 series. For someone buying an MKC, would they say "I own a Lincoln", and have people believe they own an old town car or 90's Continental?

Until Lincoln offers true luxury and performance vehicles, there will be no cachet dripping down to the compact class for them.

I agree, and yet I disagree. I'm flexible like that!

The thing is with that lower entry level luxury in which Lincoln is beginning its rebuilding isn't completely taken by names. People are spending upwards of $40k on Fords, Toyotas, Nissans, etc... I would estimate that better then half of that entry level luxury market isn't nearly as brand conscious, nor brand averse as those of us who consider ourselves auto enthusiasts. In fact a very large percentage of that market is single women who will not know, nor will they likely care that their new MKC shares its platform and engines with a lesser Ford.

There is much to be said for taking the bottom up route to building a luxury brand. If Lincoln were to hit the market with a 7 Series/S Class vehicle that was competitive they would still face problems winning over the brand loyalists. People shopping in that price range are far more likely to be brand sensitive. On the other hand starting at the entry level they can win over younger people who are entering the luxury car market for the first time. The fact that this is also the volume portion of the luxury car market helps. They can use their success in that market to not only build brand loyalty, but the profits to finance the move upward.

When most of us here talk about what Lincoln needs what we are really talking about is what we want. I for one do not believe that we represent the largest portion of the market.

[SP1966]

Very interesting perspective and indeed likely true... Good point. This is Lincoln's battle. Cadillac has begun to change that and they're already 10 years into the process. Johan de Nysschen, the new Infiniti boss (and previously of Audi NA), has said publically that to get Infiniti to the point of MB or BMW will take 20-25 years and will require unique engines, interiors, exteriors, and design centers. And I think Infiniti is already ahead of Lincoln in this regard. We're talking 25-30 years for Lincoln. That's why I laugh when I read people say Lincoln's revival is dependent on the MKZ launch. Not quite...

I don't think Infiniti, Lexus, nor Lincoln ever really need to achieve brand equality with the Germans. None of BMW/Merc/Audi are ever going to truly play in the Rolls/Bentley market. There are many tiers to the market, and there are huge profits to be made between entry level luxury and the Germans. I'm not personally interested in seeing Lincoln try to be an American version of the German brands. I'm interested in Lincoln becoming its own brand, with its own appeal. So long as they ensure that the reputation for quality, reliability, style and appeal is on par with the rest of the luxury competition I think there is more than enough room for non-traditional luxury brands. In fact I think that is what is needed, not just another wanna be brand, but a unique brand with its own desirable identity.

You cannot be a follower in this segment, you have to be seen as out front, a leader. The only way to do that is to redefine what it is people want. Apple is a success because they give people what they didn't even know they wanted/needed. To truly set Lincoln apart and make it unique amongst its competition it needs to do the same.

[Iiari]

1)There are many tiers to the market, and there are huge profits to be made between entry level luxury and the Germans. 2) I'm not personally interested in seeing Lincoln try to be an American version of the German brands. I'm interested in Lincoln becoming its own brand, with its own appeal. So long as they ensure that the reputation for quality, reliability, style and appeal is on par with the rest of the luxury competition 3) I think there is more than enough room for non-traditional luxury brands.

Regarding your points:
1) I'm not sure how many tiers there are anymore between the entry level and Germans. I think cars like Ford's own Fusion Titanium is pressuring them from down below and I think every car maker fears the MB CLA which, if it's as good as it looks and goes for 30-35-ish is destined to be a grand slam and steal from everyone.

2) Totally agree with this...

3) I think the jury is out on whether non-traditional brands are viable right now. I think, fundamentally and philosophically, BMW and Lexus won the luxury wars. Their brand promises and style have trumped all others. As far as the media (and increasingly the public) is concerned, you have to offer BMW-like luxury sport balance and Lexus interior-like design and comfort to be considered viable as a luxury vehicle right now.

All other philosophies of luxury (Scandanavian minimalism, American size with living room-like accomodations, Japanese ultra-high-tech, English olde world) have not proven to have mainstream appeal and all practioners of those styles have either gone out of business (Saab, Rover), had to radically redefine themselves (Cadillac), or tack very hard away from their historical brand values and style towards the BMW/Lexus standard (Volvo, Acura, Jaguar). One could even argue that BMW is trying to become more like Lexus and visa versa. That's how homogenized BMW and Lexus' victories are causing things to be.

Is there a role for a "middle-ground" luxury approach? Something that blends these values like Lincoln is trying. I hope so, because the auto world is becoming increasing boring as everyone just copies the formula of a few brands...

[Sal Collaziano]

Something to keep in mind - but Hyundai has come into the market with luxury products like the Genesis and Equus - and they're selling them. I see Genesis Sedans ALL over the place. I see lots of Coupes as well. I don't see many Equus but they're here and there. That's one expensive Hyundai. What I'm saying is - if Hyundai can get as far as they have with the Genesis - which is basically an entry-level luxury car - than I don't see why Lincoln, with a long history in America, can't do ten times better. They just need the right products. Hyundai's come as far as it has with it's "luxury" vehicles in a single generation. Imagine Lincoln did the same. If they focus, they'll be back. And I think they're driven enough to make it happen.

I don't think they're there yet. I'd like to see more performance in their vehicles. I don't need a Lincoln V-Series. I just want good performing vehicles. I think the next Navigator is going to attract lots of attention. I bet this MKC will bring lots of younger people into the brand. I have a feeling the MKZ is going to create a buzz once it's seen riding around in the street.

I haven't owned a Lincoln in a long, long time - but I'd be proud to own one again. I don't think the name/brand is damaged. I'd have no issue driving a Cadillac, either, if they'd just bring out a proper flagship. And that's another thing - we need a real Lincoln flagship. The MKS is too narrow - and I don't want a weird looking Crossover SUV.

Let's see what they do in the next 5 years or so...

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^ GOOD to see you here again, Sal!

I agree, and yet I disagree. I'm flexible like that!

imho this deserves its own


the "Tiers" have always mystified me somewhat so I just go with 3's
Mainstream ... RR,Bentley,& exotics(Ferarri etc) ... and everything else
then Mainstream I break into 3 again: Cheapo - regular - & winners-or-over-priced.

3) I think the jury is out on whether non-traditional brands are viable right now. I think, fundamentally and philosophically, BMW and Lexus won the luxury wars. Their brand promises and style have trumped all others. As far as the media (and increasingly the public) is concerned, you have to offer BMW-like luxury sport balance and Lexus interior-like design and comfort to be considered viable as a luxury vehicle right now...

The middle category is tough. Six digit S-class I guess is near the top, tho I rate the Jaguar XJ higher for soul & esprit.
Imho BMW is losing the war - or already lost - since I see them as abandoning their DNA trying to out-lexus Lexus (the 3er is/WAS BMW imho & their other models too 'me-too') ... Actually kinda thinking BMW AND Lexus would like to be Jaguar but just don't have the innate CHARM to carry it off.

I definitely see Lincoln belonging in this category - just don't know yet where FLincMoCo is aiming (eventually). ((Mercury I see as the LINE between mainstream and the Lux/special-but-not-TOO-obnoxious group)) and the Fwd BMW's & MB's are dipping BELOW that line. ((Oh! and Jag might be the LINE between middlers & tippytop)).
Stuck in my mind is Lincoln's "luxury without guilt" routine they had a couple years ago & probably imho is no longer totally valid. Kinda hope they decide to be just a bit 'naughty' AND unrepentant (tho still GREENish-or-most-of-the-time)..

The main thing that bugs me is, Lincoln may have all the time in the world to get wherever they want to go, BUT I DON'T...and would really like to see how this phase turns out

&
only-sorta On-Topic
imho our world is getting "poorer" and for the current tech-level, simply Used-Up.
I fear the oligarchs & plutocrats turning to extreme measures against the 90+% to maintain their "jetset" lives of the rich and anonymously-infamous.