“Take BMW. In the near term, they will have nine entries in the compact segment. This is basically our heartland,” he told me on the sidelines of the Paris auto show. “With the brand reputation they have, you start to have a massive problem.”
-Gunnar Herrmann, Ford of Europe’s Vice President of Quality
Roughly a decade ago, BMW Canada started advertising how their new 320i (Canada-only, not for the USA) was retailing for $34,000, about the same price as a generously-equipped Honda Accord. The implied question was, what would you rather have? A Honda Accord, or a Beemer.
The first shot in the paradox of aspirational marketing may have been the Mercedes-Benz A-Class, a Golf competitor from the brand that made the 600 Großer. Rumor has it that Ferdinand Peich was so incesnsed by this, it spurred him to create the Phaeton, a Volkswagen that could compete with the S-Class. We all know how that turned out.
As the Automotive News article notes, a base model turbocharged BMW 1-Series is only 500 euro more than a mid-range Ford Focus with a similar powertrain. The quality gaps between the two must be nil, otherwise Ford risks losing customers to BMW. But what happens when the brand equity of BMW is so devalued that it ceases to mean anything? Mercedes answer to this question was an enormous flop. But if this strategy continues to be pursued, then prole drift is inevitable, and the only way for the wealthy to distinguish themselves via consumption will be Bentley, Rolls-Royce, Aston Martin, Ferrari and the like. ‘