By on May 7, 2013

Range-Rover-Evoque-05-450x300

As Mercedes-Benz, BMW and Audi rush to prepare new entry-level product to attract a younger crowd, Jaguar Land Rover is proudly calling “bollocks” on their efforts to attract younger buyers. Although much of the growth in the “near-luxury” segment is expected to come from vehicles with a transaction price in the $30,000-$40,000 range, JLR’s sole offering in that segment is the low-volume LR2. It’s the $50,000 Evoque that’s driving sales for the brand.  This interview from Automotive News with JLR’s North American CEO, Andy Goss, explains why:

Most of your competitors are working on vehicles for Gen Y buyers. Do you need to move in that direction?

You should not pigeonhole yourself so much. We conquest customers but we are selling cars that are $40,000 to $80,000. They are bought by people in their 30s and early 40s. Even the average Evoque buyer is 43 years old. The average [Evoque] transaction price is nearly $50,000. We are not Scion.

In my last Generation Why article, there were a lot of good arguments brought to the surface in support of cars like the Mercedes-Benz CLA. For one thing, Mercedes has a very old customer base, especially in Europe. They tend to be buying their last car rather than their first car. Clearly, this is not a sustainable growth path, and will lead to a Buick-like customer base. In that light, bringing in new buyers with a more affordable, more efficient compact vehicle seems like a good call.

In his column this week on the “Scion” remark made by Goss, Peter DeLorenzo strikes a chord that we’ve been playing for a while here at TTAC:

Young people aren’t stupid. They’re brand savvy too – much more so than any brand studies are actually quantifying…

I’ve said that before, perhaps more often than some of our readers have wanted to hear. Among Generation Why buyers, Mercedes and BMW are already sufferng from an image problem. While the parents of today’s college-age consumers still associate Mercedes-Benz and BMW with stratospheric price tags and unique dynamic qualities, the next generation seems them as cars that can be leased by any $30k millionaire becauses they’re too proud to drive a Honda Accord. When you grow up inundated with rap videos and paparazzi photographs showing your celebrity idols driving only the priciest variants of the model lineup, suddenly a four-cylinder small sedan isn’t good enough, even if it has the “right” badge. If you drive a BMW 320i, girls won’t think you’re rich; they’ll think you’re a try-hard.

With Land Rover, on the other hand, JLR has an image that has been so far untainted by associations with low-price leasing or four-cylinder loss-leaders. The Evoque, despite being little more than an Ecoboost Ford in a fancy wrapping, is on fire, with the Halewood plant literally pumping them out around the clock. The new Range Rover is also moving like crazy, simply by virture of it being a new Range Rover. I am positive that the reason people will continue to pay 30 percent more for this car over an X5 or Q7 is because unlike Mercedes, BMW and Audi, Land Rover is not chasing every niche and trying to make their cars accessible to credit criminals and $30k millionaires. Even a car like the Evoque has an older buyer and a much higher transaction price than other entry-level luxury cars. If the Germans are like Ralph Lauren in the T.J. Maxx discount bin, chasing volume and filling every possible niche, then Land Rover is like Richard James: unwilling to make any more product, and sell it any cheaper, than they please.

It’s not all good news for the Tata-held luxury conglomerate, however. Unlike Land Rover, Jaguar has not had the same resurgence. The F-Type should give the brand a solid halo car, and the new XJ is certainly striking enough, but like Audi, Jaguar will probably be an overnight success 20 years in the making. Jaguar is still associated in the public mind with consistent quality problems and misshapen failures of product planning like the X-Type and S-Type. Nor has the public reacted to the new look of Jaguar’s XF and XJ with the approbation it’s given the new look of the Evoque.

With the Range Rover brand, JLR was able to introduce a new, lower-priced model and reap immediate rewards, but that same avenue cannot and will not work for Jaguar; how could you do anything cheaper or less desirable than the old X-Type? Rather, Jaguar will have to build prestige with a long string of desirable, expensive vehicle before they can chase any additional volume. If it’s any consolation, Jaguar’s been in deeper trouble than this in the past and has recovered. There’s something about the Jaguar brand that just won’t quit — and it’s something you can’t get from a Mercedes CLA.

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87 Comments on “Generation Why: “We Are Not Scion”...”


  • avatar
    philadlj

    Uh, Pete? Speaking as a young person, SOME of us ARE stupid. Some, in fact, probably don’t even know the meaning of the word “savvy”, or “quantified.”

    • 0 avatar
      Mykl

      “Speaking as a young person, SOME of us ARE stupid.”

      Cheers to that.

      • 0 avatar
        MrWhopee

        Blowing of $50,000 on a Land Rover product would qualify as evidence of that stupidity, I think.

        • 0 avatar
          corntrollio

          Well, to be fair, the base price is $42K in 2013 — they lowered it $2K to have a cheaper model and decontented a little bit (e.g. no panoramic roof). I suspect that’s helping to bring more people in the door, and there are tons of people who lease $42K cars that don’t look like they can afford to buy one.

          I personally think the two-door version looks awful. I’m not a big fan of the four-door either, but it’s definitely appealing to a lot of people, as are Tiguan, X1, GLK [aka Gotta Look Kardashian], and Q3 when it shows up here. The X1 and GLK always look so tiny to me — I keep thinking, slightly raised 3-series wagon and C-class wagon.

    • 0 avatar
      reclusive_in_nature

      + a million

    • 0 avatar
      justgregit

      Speaking as a young person, some of us don’t want to drive a car driven by soccer mom’s and crazy ladies from “True housewives of…”

  • avatar
    ajla

    “If you drive a BMW 320i, girls won’t think you’re rich”

    Depends where you live.

    “Land Rover is not chasing every niche and trying to make their cars accessible to credit criminals and $30k millionaires.”

    No, the depreciation that even a Northstar Cadillac laughs at takes care of that.

    • 0 avatar
      SomeGuy

      No kidding.

      People thought I was rich with an $8,000 E46 BMW.

      And also, I have yet to meet a woman who cares about what I drive. I guess things are different elsewhere?

      • 0 avatar
        carrya1911

        The ones who give a rip what brand your car is are probably not the sort of women who make good prospects for a life partner.

        • 0 avatar
          Hummer

          +1

        • 0 avatar
          mkirk

          While this is true, I spent a lot of words yesterday defending my honor as a 99 percenter from posters on this forum due to the Land Cruiser in my drive way…so all the snobs don’t drive BMWs in LA!

          And were I single I would be impressed by a woman who was impressed by an e30 BMW as that would show she likely cared about how a car drove.

        • 0 avatar
          bikegoesbaa

          You assume that the person with the car is looking for a “life partner”.

          Lots of folks are more interested in finding partners on a time scale that ranges from hours to months than they are in finding one particular “life partner”.

          For these people, a car that appeals to a shallow but attractive demographic may well be a very good choice.

          • 0 avatar
            corntrollio

            Well, that’s why I always laugh when someone on TTAC says some car got them girls.

            I believe Mr. Baruth’s friend who was deciding between a Challenger and a Boss 302 suggested that some Facebook hos were willing to fellate him and/or engage in anal sex in the back of the Challenger (probably a more comfortable place than the back of a Volkswagen?).

            More recently, someone suggested that their Jeep Wrangler got them girls, to which my first thought was — “yeah, but they’re weird chicks who are only attracted to stoner surfer dudes who never go off-road but still ride in uncomfortable loud Wranglers voluntarily.”

      • 0 avatar
        corntrollio

        A friend of mine was given a hand-me-down 8-10 year old BMW (now probably another 2 years old) because the family member didn’t want to bother selling it. Still in good condition because the family member takes good care of his cars.

        Even in a place where a BMW is commonplace, like Southern California, some people think she’s a rich snob because she drives a BMW, and people are more likely to give her the finger and yell out the window about her being yuppie than in her old Nissan. Doesn’t really make much sense to me, but that’s what the average car-driver thinks I guess.

        I guess if you drive an old BMW, and it doesn’t look like a clapped out 5th owner POS from a BHPH lot, people who don’t know anything about cars think it’s a new one.

        • 0 avatar
          Hummer

          And I bet the other person drove a semi-new vehicle worth more then the BMW.

          Some people are quick to judge, they live a life believing false stereotypes and inevitably adopt them.

        • 0 avatar
          Synchromesh

          The problem isn’t so much what the BMW drivers drive but more of HOW they drive. I noticed BMW people tend to drive like complete %$$&)%@. It comes with the car. And that’s probably why she’s getting all the “extra attention”.

          If I had my way, it’d be possible to obtain a BMW hunting license which would come complete with a bazooka. Only Prius and pickup drivers are worse offenders.

          • 0 avatar
            Wscott97

            +1 I completely agree with Synchromesh, a family member of mine bought a BMW 530 and became the worst aggressive driver, I couldn’t wait to get out of the car. He never drove like that when he had a Maxima.

            I never understood why the Prius got such a bad rep until this week. I am renting one while my car is in the bodyshop. It has too many blind spots and the Eco mode makes it slower than my Civic Hybrid.

          • 0 avatar
            corntrollio

            Well, as far as I can tell she doesn’t drive it differently than her Nissan and don’t think of her as a crappy driver, but maybe there are things that were excused in her old Nissan that aren’t now.

            Prius drivers are quite annoying. Californians as a whole are bad enough at being road boulders in the left lane, but Prius drivers make up a disproportionate amount of these road boulders.

        • 0 avatar
          bd2

          Not surprising that the typical person is ignorant that a 10 year old 3 Series is worth less than $10k but is more impressed by that then someone driving a new, fully loaded Honda minivan which goes for over $40k.

          • 0 avatar
            kkt

            It’s not just price, it’s being a poseur. The driver with the 10-year-old BMW probably never drives it like the streetworthy track car that it is. The driver with the minivan probably really needs the space.

    • 0 avatar
      StaysCrunchy

      The dealership I work at is one of the highest volume sellers in both new and used in the state. When we get a popular model used car on the lot, it usually isn’t around long enough to celebrate it’s one-week anniversary. That said, we have a beautiful 2007 Land Rover LR3 – a vehicle which retailed for almost $50k new – on the lot for almost two months priced at $13k.

      I haven’t done the “formal” research, but in my personal observation there is no single vehicle brand in existence who’s value drops farther and faster than a Land Rover.

      • 0 avatar
        corntrollio

        That is very low — I saw a reasonably-low mileage 2006 LR3 in 2012 for something starting with a 2. Does yours have high mileage or did the one I saw just have a lot of room for negotiation? It didn’t seem out of touch with market price at the time, although I didn’t look at it seriously at all.

        • 0 avatar
          StaysCrunchy

          When we first got it we had $16k written across the windshield. I think $13k is our final, “get this thing the hell out of here” price. I work in parts so I don’t know the why’s or how’s of the used car department, I just know that it’s been sitting out there a while.

      • 0 avatar
        justgregit

        Yeah, I’ve always thought the same thing. I was going to make a comment about the fact that I would be worried about their brand image based on the fact that its always some 25 year old driving any LR over about 4 years old. Its indicative of how quickly they drop in price like a rock, and I would be worried about dillution from the used market crowd.

        It could be a byproduct of their “storied reliability” reputation, warranted or not.

      • 0 avatar
        Splorg McGillicuddy

        Yeah, I was thinking that if the Evoque doesn’t change that trend, then almost nothing will. Is there some perception that the Evoque is at least more reliable than the others, given its makeup? I really like the vehicle (especially in that dark green 2-door guise) but I can’t see myself taking that kind of hit on a vehicle. Also, it needs a stick shift, but hey, I’ll let that one slide given the demographic.

    • 0 avatar
      philadlj

      There’s always Badge Delete!

      • 0 avatar
        corntrollio

        Speaking of badge manipulation, the other day I saw a Lexus Aristo. It looked like they tried to JDM it in other ways too, but they left the Lexus badge and the L-logo for some reason. It looked ridiculous.

  • avatar
    gslippy

    Mr. Goss is right. A man’s got to know his limitations.

    Similarly, Ferrari and their kind ought to just say no to hybrids.

  • avatar
    CJinSD

    First off, anyone that buys an Evoque is the opposite of savy or informed. Secondly, are you sure that an average buyer age of 43 is higher than other entry luxury cars? That’s pretty young for any car. Third of all, if the Evoque isn’t an example of Land Rover chasing customers in niches where they’ve never been, then the X6 was meant to take the baton from the 5-series as BMW’s volume family car. Its a repudiation of brand values. While a Range Rover is an active lifestyle costume for someone whose idea of a workout comes when there are actual handicapped people occupying all the handicapped parking spaces, the Evoque is a Ford Focus wearing a Range Rover costume.

    • 0 avatar
      th009

      43 is about 10 years younger than the average age of a Ford Focus buyer. Realistically, I wonder how many of the Evoques are bought by parents for their children — not so many of the 30-year-olds (42 is an average, after all) are buying $50K vehicles with their own money.

    • 0 avatar
      Splorg McGillicuddy

      I’m male and 44 and I’d love one. It’s like a Mini for adults and it’s still not too big for San Francisco.

  • avatar
    JSF22

    It seems to me that Willie Sutton’s explanation for why he robbed banks is an equally good explanation for focusing in a proper way on more mature buyers: because that’s where the money is. A certain proportion of every generation will become very successful and will aspire to own things of unique quality, precise function, and tasteful design. Good for Andy Goss if he realizes that and is willing to wait for them, serving their predecessors in the meantime. When I was a kid, my aspirational car was an S-Class. Had it remained “engineered like no other car in the world,” I would have bought their car and realized my dream. But by the time I could afford one, it looked and felt a lot like a Taurus. Perhaps having commoditized their cars and cheapened their brand, Daimler are making more money (but I don’t think so).

    • 0 avatar
      DeadWeight

      “A certain proportion of every generation will become very successful and will aspire to own things of unique quality, precise function, and tasteful design.”

      Actually, very few people really desire to own “things of unique quality” or “precise function.” Some people do, but their numbers are drowned by the types of people who’d win 100k in a lottery and proceed to blow most or all of the post-tax sum on a genuinely overpriced and genuinely lackluster (in terms of quality, durability & design) vehicles with a badge popularly perceived to project prestige (by the sheople) precisely like this Land Rover Evoque, which could serve as the official vehicle of true douchebaggery everywhere.

      The Evoque makes owners/drivers of ANY other Land Rover product, from any era, look positively cool AND infinitely more intelligent, by comparison.

  • avatar
    carguy

    Part of the problem for the makers of luxury cars is their shrinking lead in quality and value. Back in the 90s the difference between a $25k domestic car and a $35K BMW was significant. Today the amount of performance, technology and refinement that you can buy for $30K is simply no longer worlds apart from a $50K luxury car. Compare a Ford Escape Titanium or CX-5 GT with a mid spec X3, Q5 or GLK and you have to wonder if the $15K-20K difference is really worth it.

    • 0 avatar
      krhodes1

      I’ heartily disagree. I get to drive tarted up cheap cars all the time, I would take a stripped 320i over a tinsled up Fusion any day. There is no comparison in how they feel on the road. If that difference in feel is not worth it to you, enjoy the savings. It’s not about the toys.

      • 0 avatar
        phlipski

        There’s a difference between perceived quality and real quality. I suspect the point of carguy’s post is that the Fusion may not “feel” as nice as the 320i, in 10 years, they’ll both have the same durability problems, whereas 20 years ago that 320i would have (should have) lasted longer. Of course, these things are always hard to quantify. Does a $50k care last longer than a $25k car because the owner of the $50k car spends more on preventative/regular maintenance? One can make a convincing argument that a cheap high volume car would have better quality than a more expensive low volume car because it has too – the margins are so thin that a company can’t afford expensive recalls, or TSB’s so they go with very conservative/proven engineering designs.

        • 0 avatar
          corntrollio

          “Does a $50k care last longer than a $25k car because the owner of the $50k car spends more on preventative/regular maintenance?”

          From my experience, if the owner actually does spend the money on the maintenance, yes, that can sometimes be true. It probably depends on the car. If you’re talking about an off-lease car that’s on its 4th owner, then maybe not, but that person probably couldn’t afford to do the proper maintenance in most cases.

          “One can make a convincing argument that a cheap high volume car would have better quality than a more expensive low volume car because it has too – the margins are so thin that a company can’t afford expensive recalls, or TSB’s so they go with very conservative/proven engineering designs.”

          I don’t think history would bear that out to be the case, so it wouldn’t be very convincing unless you know something I don’t. While they may use outdated platforms for cheap cars, they also often use cheap materials and don’t engineer them as well. Also, cheap cars like that are often driven by geezers here in the states, and they don’t drive them enough miles for the problems to show up (sort of like Porsches).

        • 0 avatar
          krhodes1

          I don’t think things were any better 20 years ago. The BMW MIGHT last longer, but more likely it had just as many problems (or more, to be honest), but since it was worth more, it was kept up better and fixed when things went wrong for a longer time. Which is no different than today. People fix 10yo BMWs with a major issue, they junk 10yo Fords with a major issue.

          As I have said on here before – if you can’t tell the difference in feel between a BMW (even a stripper rental spec F10 528i) and a Camry(!!), count your lucky stars because you are going to save a boatload of money on cars.

          BMW at least gives you the option of ticking the right boxes to make the car interesting, Toyota does not. My Mom drove the equivalent of that stripper F10 for many years – an ’83 528e with 3spd automatic. It was literally a German Buick. Except a lot less plush than an ’83 Buick. Nice car though. My e28 535i 5spd was a VERY different car. It’s all the same as it ever was.

          • 0 avatar
            tjh8402

            @Khrodes – not sure if this was directed at me cause it’s in a different part of the thread, but I mentioned the two so I’ll assume it was. I didn’t say I couldn’t tell the difference between the two. I called it “the nicest Camry I’d ever driven” with both having the same attributes “smooth efficient [soulless] 4 cylinders, quiet composed rides, good stereos, good infotainment, high quality interior materials, and completely uninspiring driving dynamics” and simply asked what made the BMW worth nearly twice the Toyota as configured.

            Ironically, my e46 330i zhp also cost about the same price in 2004 as that 528i does today, and while it has none of the creature comforts of the F10, much less the Camry, I think it would still be worth every penny if BMW were selling them brand new because in that case there IS something very special about the driving experience. I can instantly see where my $ went. So ultimately, I won’t be saving a boat load of $ cause I’ll just continue to pour massive amounts of it into the older BMW’s I’m likely to keep procuring, and then proceed to keep fixing/driving for as long as my bank account allows.

          • 0 avatar
            krhodes1

            @tjh8402

            Let’s to compare apples to oranges here. You have the top of the line most sporting built JUST for enthusiasts special version of the e46 bar the M3. OF COURSE a 528i is going to seem pretty uninspired by comparison. So would the e39 525i. Or 520i. Or 518i in some markets. The most recent equivalent of YOUR car was the e91 335is or the 1M – would you consider those cars “a nice Camry”? How about a sport package 550i?

            The base model 5-series has long been nothing to get excited about from a driving perspective, it is, afterall, just an entry level mid-size German sedan. Bought by middle-class German Doctors and Lawyers, literally a German Buick. Well, I suppose the slightly more sporting nature made them more like German Pontiacs. My Mom’s e28 528e was a total snoozefest too. But both it and the F10 STILL have that certain feel to them that you simply do not get in non-premium cars. Is that feel worth $10-15K over an Avalon or big Buick? It is to me. Not that I would ever buy a 5-series either – too big, I also prefer the 3.

      • 0 avatar
        ellomdian

        As someone who has, within the last 6 weeks, driven both a fusion Titanium (or whatever) and a gently used 2012 320, I would like to call bull. The Ford is leaps and bounds better if you spend more than 20 mins in the car.

  • avatar
    grzydj

    I think Scion is a pretty remarkable company based solely on the fact that Toyota went out and researched on what things younger people didn’t like. Toyota found in their research that younger buyers hated being marketed to directly, so they made a company (Scion) that marketed to them directly. Brilliant.

    Almost as brilliant as passing off a gussied up Mondeo as a Range Rover.

    • 0 avatar
      Splorg McGillicuddy

      Well, the other side of the coin is that the young do not buy cars. But, the marketing truth still applies: You’ll never sell a young person stuff that’s marketed towards older people, but you WILL sell older people stuff that’s marketed towards the young. This is why everything always claims to be for the youth, but not necessarily so in reality.

      As people get older, they become less active and selling them the image makeover a vehicle gets you is like selling them a magic pill. All I have to do to look younger (and feel younger in my mind) is to buy this kid’s car. Youth sells. Sex sells – it’s all the same stuff.

      • 0 avatar
        grzydj

        This is why old people loved the first gen xB. Actually, most of them liked it because ingress and egress was similar to that of a minivan or a CUV, but the xB could be owned and operated on a pensioners budget quite easily.

        Plus you can drive an xB without having to remove your top hat.

  • avatar
    mike978

    Jaguar will be moving “down” when their 3 series competitor comes out in the next 1-2 years.
    “I am positive that the reason people will continue to pay 30 percent more for this car over an X5 or Q7 is ” I would finish this thought by saying RR has credibility for over roading. Even if most buyers don`t go off road, they like to know their SUV can actually do it. Much like Wrangler drivers.

    • 0 avatar
      mkirk

      I don’t think there is much of an offroad connection on these things. Does the average Evoque buyer even know what a Defender is? And while there are many Wrangler posers out there, there are also a ton of them that go places that a motorized vehicle just shouldn’t. Not so with most modern Land Rovers. Most of the current Land Rovers, to me anyway, say “New Money” which is the total opposite of what the old ones say.

    • 0 avatar
      Kyree S. Williams

      BMW did own Land Rover during the development of the E53 (2000-2006 X5) model. I’m fairly certain that they borrowed from Land Rover’s extensive 4WD/AWD expertise during said development, but only as far as creating the ultimate on-road crossover goes. An unmodified X5 won’t do nearly so well as a Range Rover off-road, but it is one of the most capable vehicles around for most driving situations…and the same is true for the Acura MDX, Audi Q7, Porsche Cayenne, Volkswagen Touareg, and probably the Mercedes-Benz ML. What more do you need?

  • avatar
    APaGttH

    … and will lead to a Buick-like customer base…

    Ugh. Can we drop the perception and live in reality?

    Every single car maker has seen their average buyer age go up, except Buick. The make with the youngest buyers are Land Rover, Mazda and VW – with an average buyer age off 48.

    The average age of all new car buyers is 51.

    Toyota is 52.

    Ford and Chevrolet, 53.

    Buick – 57 – dropping almost 20 years in less than a decade. It is a stunning demographic shift.

    Less than 11% of all new car buyers are under 34, about 1% are 24 or under. The image of the blue haired Buick buyer is dead.

  • avatar
    TorontoSkeptic

    Love these columns… I’m fairly sure Derek lives in Toronto also (?) which is like no place I’ve ever seen in the 30k millionaire department.

    The lowest-trim A4, 3-series and C-class are HUGE here, because no unemployed office machinery salesman or retail clerk wants to be seen driving something as downscale as a Toyota. The people who drive them are a) leasing them b) not interested in driving dynamics c) using it to pick up women and “impress clients.” It’s the fake rolex of cars. I don’t see the popularity of those cars going away any time soon…

    The Evoque is the ultimate suburban rich idiot car so it’s kind of funny to be defending it because buyers are so smart and savvy. Anyone who does 10 minutes of research on value, performance, reliability would probably end up with an X5 instead (a vehicle which I happen to hate and see everywhere).

    I like the observation that the gap between luxury brands and “ordinary” brands has closed a lot. Especially in the more competitive segments like mid-size sedans I think it’s especially true – not sure about SUVs.

  • avatar
    Summicron

    Wouldn’t a car made by Palestinians sell like crazy to Y’ers?
    Keffiyeh seat covers, desert camo paint.

    • 0 avatar
      anomaly149

      We might actually be able to afford it…. http://www.guardian.co.uk/money/2013/apr/03/student-loan-debt-america-by-the-numbers

    • 0 avatar
      mkirk

      Palestinian assembled rigs lose some of there charm in the US as Uncle Sam tends to frown upon Rocket Launchers and machine guns mounted in your old Toyota pickup.

  • avatar
    smartascii

    My personal reasons for staying away from the “Luxury” brands is that they’ve lost what makes them luxurious. Someday, when you have time on your hands, go test drive a V6 Huyndai Genesis ($34,200), and then run down to the BMW store and try a 528i ($47,800). Aside from the fact that the BMW has vinyl seats and a 4-cylinder, try to spot any differences that make the BMW worth its $13,600 premium. Does it have higher-quality materials? Do the doors shut with some sort of Germanic Thud? And when you drive it, does it possess some unquantifiable quality that makes it “feel” better? My bet is that, if you’re objective, you won’t be able to name anything that makes you feel like the BMW is a luxury product and the Hyundai isn’t.

    It appears to me that the same is true of the other “Luxury” brands. Pre-2000s Mercedes, BMWs and (to a lesser extent) Lexuses just felt better, in the same way that a cashmere sweater feels better than a cotton one. Now they just have more complicated electronics.

    • 0 avatar
      tjh8402

      @smartascii, I think you have a great point. I had the same reaction after renting a new Camry one day and an F10 528i the next. At the end of it, my conclusion was he 528i was he nicest Camry I’d ever driven. Both had smooth efficient 4 cylinders, quiet composed rides, good stereos, good infotainment, high quality interior materials, and completely uninspiring driving dynamics. Remind me again why I should pay twice as much for the 5 series?

      Look at a X3 vs Q5 vs Escape Titanium. All are AWD crossovers wtih 2 liter turbo 4s with 200-250 hp, similar performance, similar high quality comfortable interiors, similar fuel economy, similar uninspiring drive characteristics, similar awkwards styling, and similar glitchy electronics. Same for a Fusion vs a 3 series vs an A4 – all have numb overboosted electric power steering, turbo 4 cylinders, smooth quiet rides, nice interiors, etc. As mainstream cars have gotten quieter, more comfortable, and more refined, BMW and Audi have dumbed down and dulled out the driving experience, in the case of BMW, gone downmarket with their powertrains. In doing this, they take away what makes the cars special.

      I always say I’m not a badge whore. If Chevy had made a sedan powered by a smooth, sonorous, powerful 6 cylinder, with rwd, a manual transmission, a quality feel, and the driving dynamics of my car, I would have bought it. Such a car no longer exists anymore from any brand. Why pay the premium both in purchase price and ownership costs of a German car if it doesn’t doesn’t deliver the special driving experience one expects.

    • 0 avatar
      mkirk

      This is why one day I will own a W123 Benz diesel.

  • avatar
    Joss

    Regardless I’d hazard Audi, BMW, MB & VW missed an aquisition prospect here. With a profit margin likely fatter than Bentley, MINI or RR?

    • 0 avatar
      Kyree S. Williams

      BMW did own Land Rover, as part of the Rover Group acquisition in 1994. They kept MINI and sold Land Rover to Ford in 2000, not long before the release of the Mk-III Range Rover. I think that BMW used Land Rover’s expertise when designing its Mk-I X5, but realized that Land Rover’s vehicles would have clashed with said X5 on the market…and I think the same thing would be true now. If BMW Group, Daimler or Volkswagen AG took over Jaguar/Land Rover, something or other would probably get mixed up, and everyone would be the worse for it. Besides, despite what would seem like an obscene amount of markup on a new, six-figure Range Rover, I doubt that J/LR’s products are all that profitable…at least not when compared to those of competing companies…

  • avatar
    Times58

    Nonsense. It is naive to assume that the premium segment is about anything but volume. I can safely say that in my many years on the frontline of the retail automotive business that a proper lease payment, or competitive APR rate can make or break the success of a brand, regardless of the age group or income of the consumer. The notion that people who seek out bargain models and discounted and subvented deals are less desirable consumers is hilarious. Although appealing to todays younger consumer is important, very few vehicles will be sold to buys in the under 40 age bracket anyway. The notion that an avid car enthusiast would think that a BMW 320i or Mercedes Benz CLA is a lesser car is untrue. Enthusiasts are the savvy shoppers that automakers such as Mercedes Benz and BMW need to continue to court. Entry level products will grow their brands, because these are consumer goods that cannot exist without a market. A brand such as Land Rover has substantially less cachet over time due to the actual quality of their products, which are niche market vehicles to begin with. Many years ago, I purchased a BMW 318i, which was one of the best cars that I have ever owned. I could have chosen a 325i at the time, but the 318i did everything that I needed and did it well. Although it was not a performance car, the quality was exceptional, and I proved to very a very solid purchase over time. I personally would be inclined to look at a 320i when I need to replace my Audi, as it would offer me everything that I would need without paying for anything else that I felt was unnecessary. I would choose a prestige german brand, or perhaps a Volvo not because of wanting people to think that I am wealthy, I would choose the vehicle for its substance. Many of us seem to forget how much better prestige cars are today that what they were 20 to 30 years ago. They are also considerably better value than they were before. The automotive landscape has changed and automakers need to follow suit with models that broaden the base of the brands.

  • avatar
    sportyaccordy

    This is a really interesting article. Kudos.

    The diff between Jag’s failure and LR’s success is simple. Its true that the whole “Gen Y” marketing strategy is stupid as hell. What sells to the young is whats in vogue. Right now, the small SUV is it. The Tiguan, the Evoque, the X1… these are HOT in urban areas. If I had the means I would buy a Tiguan myself. They are just nice cars and fit in with what people want. Something like a Tiguan has the look a woman wants, with the oomph and “street cred” a man wants, and the practicality + low cost they need.

    On the flip side, the F-type is everything a gen Yer DOESN’T want. As cool as the F type is, expensive roadsters just scream MIDLIFE CRISIS. Not to mention, they are both wildly impractical and outside the range of affordability of a Gen-Yer. As blasphemous as it would be, Jag would be smart to revive the F-type with an SUV built on the Evoque’s platform, if they want to generate volume to enable survival.

    My generation is BROKE. The closest we will come to something like an F-Type is

    - an auto show
    - the internet
    - USED car dealerships, taking stupid out of warranty gambles

    at which point they will be out of vogue anyway.

  • avatar
    fredtal

    I came into my 2007 Audi A3 by accident and payed more for it than I planned. No matter how many times you call me a badge whore I’ll tell you it is far better than any other car I tested. The VW GTI was close but I don’t regret it for a moment the $2000 more I paid for it.

    I’m now sold on the quality of luxury brands and will have no regrets buying another.

    • 0 avatar
      mkirk

      I don’t know man…My wife likes the Lexus ES to replace the current mommymobile CUV down the line, but I would have a hard time ponying up for one over an Avalon. Perhaps the Germans offer something more though to step up to the premium brand…I havent owned German in a long time so I don’t know.

    • 0 avatar
      Dave M.

      When you’re spending $30k, and additional $2k for the piece of mind of buying exactly what you wanted far beats the ‘woulda coulda shoulda’ wondering if you didn’t. Kudos.

      My problem is my targeted car comes in nice ($30k) and sweet ($34k). I guess since I keep my cars 10-14 years $4k is no big deal.

  • avatar
    bd2

    The Evoque is higher priced than the X3 or GLK b/c unlike those traditional “box” CUVs, the Evoque is a “style” CUV, much like how the higher priced BMW Gran Coupe and Audi A7 are “style” versions of the 5 Series and A6.

    The Germans are coming out with their own style versions of their compact CUVs (BMW already has a style version of the X5 with the X6).

    • 0 avatar
      corntrollio

      I saw one of those BMW 6-Series Gran Coupes on the road for the first time yesterday or the day before and couldn’t figure out what it was at first. It looked bigger than the current 7-Series because of the profile, but that’s probably because the 7-Series is so hard to distinguish from the 5-Series and the 3-Series these days.

  • avatar
    Kyree S. Williams

    “Jaguar is still associated in the public mind with consistent quality problems and misshapen failures of product planning like the X-Type and S-Type”

    And somehow Land Rover doesn’t get this kind of sentiment. Because those early Series-III (2003-2005) Range Rovers with the BMW running gear were such reliable vehicles…

    • 0 avatar
      CJinSD

      It seems astounding that there could be someone that knows so little about cars as to think that Land Rovers are decent yet still knows that Jaguars are not.

      • 0 avatar
        Kyree S. Williams

        That was sarcasm for you, mate. Learn it.

        • 0 avatar
          CJinSD

          I was agreeing with you that the premise of the article’s comments on Jaguar’s reputation holding them back while Land Rover gets a pass seems improbable. Jaguar’s problem is still product. They need something that appeals to people who know literally nothing about cars, something like the Evoque.

          • 0 avatar
            friedclams

            Selling to people “who know literally nothing about cars” seems to be the path to success in the auto industry for most segments.

  • avatar
    NorthwestT

    “We conquest customers”…who talks like that? Creepy little effer.

    • 0 avatar
      flowerofhighrank

      I logged in to say just that. What does that even mean?
      I won’t buy a RR because of the (perceived) high service costs. My Ford F150 has 130K on it and runs like a champ. I get the service done before it needs it, I’m not trying to prove anything to anyone. IF I were a single guy in my 30s, maybe I’d take a chance? Probably not.

      Range Rovers look cool. So do actresses; never again…

    • 0 avatar
      corntrollio

      It’s a standard dealer talk — conquest sale is winning someone who previously owned a different brand.

  • avatar
    CelticPete

    To me Land Rover is the best ammunition for the old “The Luxury cars are scam you are just paying for the badge” argument. I seriously don’t think thats true with alot of the luxury brands. I like BMW, Audi and others – as I think they really get this kind of sport luxury feel better then other less expensive cars. (You really do get something for the money).

    Land Rover though – just seems like a rip off. You don’t get amazing off-road prowess and you don’t get superior dynamics (its an SUV). You don’t even get Cayenne or Jeep SRT like wow factor. It really seems to be all about the badge and the looks.

  • avatar
    300zx_guy

    I don’t think you can lump BMW and Mercedes together in this scenario. MB made its reputation on its most expensive cars, and the C class (and now CLA) appeals to people who want to associate with the MB brand but can’t afford an SL, S, or even an E class. BMW built its reputation on its small sports sedan. The 3-series is “THE bimmer”, and owning a 328 or 335 doesn’t scream “because I couldn’t afford a 5 or 7-series”. Of course, we all know the brand became trendy, way beyond people who cared how it drove. So driving a base 328i (or now a 320i) isn’t so much trying to say “look at me, I’m rich” as it is “look at me, I drive a BMW”. Audi sort of lives in the same space as BMW, as it was the A4 that made the brand trendy (at least here in the US).

    • 0 avatar
      corntrollio

      Yes, exactly. This is why I (and many other people I know) think of a C-class as a fake Benz, but don’t think of a 3-series as a fake BMW or an A4 as a fake Audi. Lots of people thought of the 190 as a fake Benz back in the day too.

  • avatar
    Power6

    The Luxury “branding” is all about getting you to pay extra money for less product, because you “value the brand” OK so JLR understands that to maintain that they need to be a bit exclusive.

    Derek you talk about this like it is a noble pursuit though. I was just watching Shark Tank the other week, Daymond asks these two ladies who make $2k sheet sets for kids rooms…Do you want to be in Walmart? Of course they say “No” to which Daymond replies “I’d love to be in Walmart…I’m out”

    Without even Googling it I bet Benz makes way more money than Land Rover does. So which is the better business? Exclusive Luxury is cool but not actually a big money maker in general.

    • 0 avatar
      28-Cars-Later

      Depends on your business strategy, cash flow, and resources. JLR is a much smaller operation than Daimler or BMW, but on the money invested it wouldn’t surprise me if they made a higher percentage of profit. Now if its parent Tata wanted to give them a $5 billion dollar line of credit, they could build more models, expand their marketing, and chase serious growth… but that will never happen. I suspect JLR is simply another division in a large Indian conglomerate, expected to send profit back to New Delhi with whatever resources they were allocated.

  • avatar
    afflo

    Well, this was fun.

    I’m not sure if I’m Gen-Y or not (b. 1981).

    I paid off my Scion tC last week, after two years. The only downside to the car I can find is high insurance rates.

    When I was looking at cars, I really wanted an Accord coupe or Altima Coupe – a midsize coupe with generous legroom, a functional back seat, Japanese dependability, and a manual transmssion. The Scion tC undercuts them by several thousand (esp with the $1K military discount they were running in 2011).

    I know others who spend $500/mo on the notes for more expensive cars, or $300-400 on leases on Entry-level lux cars. I’ll gladly drive the wheels on this tC (essentially a 4-cyl Camry with a stick, firmer springs, and three doors). I bought it new so I know it hasn’t been thrashed by a dumb kid. I’ll gladly enjoy paying no payments for the next 10 years… I’m planning my next car to be around age 40/retirement from the Air Force.


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