豪华车(转)? On luxury's doorstep

wjiang (激昂)
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If Business Class cost only a few dollars more than Economy, wouldn't you fly that way? If Ralph Lauren jeans cost only a few dollars more than Zellers', wouldn't you rather wear them?

Business Class won't get you there any sooner; Laurens won't keep you any warmer. But you just might enjoy the experience more.

That just about describes both the demand and supply sides of one of the fastest-growing segments in the car business: the "near-luxury" segment.

Buyers want to buy them because they want to be seen in them and, on a monthly lease basis, they don't cost all that much more. Carmakers want to sell them, because they don't cost much more to make, and manufacturers earn more profit on them.

Car companies define this segment differently, but it is generally considered to consist of cars in the $35,000-to-$50,000 range.

You've got the traditional luxury brands here, all of them European. Names such as BMW, Mercedes-Benz and, just this year, Jaguar.

You've got newer European entries, such as Audi, Volvo and Saab, which, in the fairly recent past - five to 15 years, let's say - have upgraded their products to play on this field.

Domestic brands, such as Cadillac, Lincoln and, to a lesser extent, Chrysler, aspire to membership.

A little more than a decade ago, the Japanese realized that this was where the action was going to be and so fabricated Lexus, Infiniti and Acura out of Toyota, Nissan and Honda, respectively.

How does a carmaker go about becoming a legitimate presence in the luxury-car business? Can you be a luxury carmaker just by saying you are, or by charging a higher price for your products?

Luxury cars used to offer technological advantages over lesser cars. But today, Hyundai or Kia offer models with electronic fuel injection, ABS brakes, air conditioning, cruise control, side-impact airbags - once all exclusive to luxury cars. Some lower-priced cars even lead in styling. Witness Ford Focus or the new Nissan Altima.

Quality, something you'd expect to find in a luxury car, no longer seems to match price.

What constitutes a luxury brand, then, is something beyond product, beyond service, beyond durability, beyond any of the tangibles of car ownership.

It is all about brand.

The established European brands - like BMW and Mercedes - have a couple of distinct advantages. Everyone knows what these brand names stand for. They have traditions dating back generations. Many involve successful participation in motorsport.

Unlike the Japanese or some of the second-tier Europeans, their products are unsullied by association with lower-priced cars. At least, not in this market. Here, we do not see 1.6-litre four-cylinder BMWs with cloth seats and windup windows or Mercedes-Benz diesel taxis.

BMW is the undisputed leader in this segment, both in sales volume and in image.

Ernst Lieb, president of Mercedes-Benz Canada, admits that the BMW 3 Series is the car to beat. "They have a wide model range," he points out, "a car for everyone. We have had only our C-Class sedan, although with the new Sport Coupe and station wagon, we have plans for them!"

Mercedes got into the game in the early 1980s, moving down from its traditional perch in larger, luxury cars with the compact 190, which evolved into the C-Class in latter generations.

Jaguar survived decades of questionable quality - its recovery is thanks, ironically, to its takeover by mass-marketer Ford - to enter this segment this year with the X-Type.

Audi, Volvo and Saab have all moved up. That is a tougher row to hoe, as the previous image lingers.

Audis are wonderful cars, but have clear Volkswagen roots.

Even Volkswagen is trying to compete here, head to head with corporate cousin Audi. VW, by definition and translation "the people's car," offering a $60,000, eight-cylinder sedan?

There are lots of stereotypical, bearded, antique-hunting university lecturers driving beat-up 145 Volvo station wagons who wouldn't begin to countenance being seen in - or affording a slick-looking S60 sedan.

It's funny to see editors of enthusiast club magazines, such as Saab's Nines, attending the introduction of newer models such as the company's refreshed 9-5, when those magazines are more likely to run articles on the two-strokers of Saab's distant past.

The point is: There is this passion for the Saab brand name.

For the moment, the curves for the near-luxury segment all seem to be pointing straight up. New entries arrive all the time. Cadillac - once the best-known car brand this side of Rolls-Royce - will attempt to erase the memory of the Catera with the new CTS next year.

But - and this is the only joke I know about statisticians - two points make a straight line, three points make a trend. Is there a danger that this whole thing will top out, and new-car lots will some day soon resemble a pack rat's nest, littered with sparkly firesale inventory?

Already, a couple of warning shots have been fired across the bow of this ship. The first is image backlash.

A friend of mine, formerly a top automotive journalist in the U.S. (and I mean "top" - about as high as it gets) owns a lovely classic-in-the-making BMW - a 1970 3.0 CS coupe.

He told me several years ago that he doesn't drive it much because "I don't want people to think I'm the sort of person who drives a BMW."

Never mind the Ultimate Driving Machine; in the land of the stand-up comic, a BMW owner can be wide-suspender-wearing, yuppie, stockbroker bore with a cellphone grafted onto his cheek. In this view of things, he wouldn't know a downshift from a downturn in the bond market.

Tougher economic times may encourage a focus on value for money.

As Volkswagen tries to move itself and Audi further upscale, it is adding content and quality to its low-end, Czech-made Skoda cars in Europe. Already there are signs that Europeans in general, and Germans in particular, are beginning to understand that they can get very nearly the same car with a Skoda badge on the hood for half the cash.

Over here, it is understood among most car cognoscenti that if a Lexus ES 300 is just a loaded Camry dipped in a veneer of gold, why is it worth 10 grand more? What if the bleach-blonde, middle-aged, suburban ladies who lunch figure this out, too?

Coming up with answers to questions such as these is why automotive executives get paid the big bucks.

And I do not.
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2001-10-19 -04:00
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