Chart Of The Day: Europe's C-Segment, Now With More Premium Options

by Derek Kreindler

Published: April 30th, 2014

chart of the day europe s c segment now with more premium options

Yesterday’s chart didn’t include premium C-segment entrants, but commenter Vega beat me to the punch in mentioning them.

The Audi A3, BMW 1-Series and Mercedes-Benz A-Class have been giving the mainstream marques major headaches in Europe for the same reason that mainstream makes with mid-size sedans are worried about the Mercedes-Benz CLA. Why would you have a Camry or an Accord when you could have the three-pointed star (at least that’s the rationale in some people’s minds)? Looking at the stats, the A3 and 1-Series would slot in at 4th and 5th place in yesterday’s JATO rankings, while the A-Class would bump the Auris down a notch.

This effect is more pronounced in Europe, where mainstream brands have taken a beating. The only car makers that have flourished have been high end luxury brands (for obvious reasons) or low-cost brands that are appealing to value-conscious middle class consumers, and consequently stealing sales from mainstream brands. This is also why Renault is doing well ( thanks to Dacia) while PSA, with only Peugeot and Citroen, is taking such a beating.

With a 1-Series or A-Class starting at around the same price as a fancy Golf, Megane or Focus, the consumer feels the same pull away from the mainstream, and into something more impressive. Unless you’re Volkswagen- then you’re just leveraging the efficiencies of MQB and laughing all the way to the bank, as both the A3 and Golf enjoy strong sales.

#C-segment #ChartOfTheDay #Europe #PremiumCars #Sales

Derek Kreindler

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14 comments

Brian E on Apr 30, 2014

The Mazda3 doesn't even make the chart? Odd, considering how well it does in the US and Canada.

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Marcelo de Vasconcellos on Apr 30, 2014

I don't know if I'd feel the pull that much. Loaded to the gills Ford Focus or bare bones A3? Top of the line Mégane or 308 against a no frills A Class? I know what I'd do. Actually, as a value conscious consumer, I'd go with a lesser Focus or Mégane and call it a day.

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319583076 on Apr 30, 2014

I'm so tired of hearing about the CLA. Although I'm looking forward to seeing 3-5-year-old clapped out versions destroying M-B brand image. The entire program is a cynical cash-grab and while I won't completely fault the corporate myopia behind the quarterly profits driven by the zombie-like lemmings who will inevitably line up to lease these turds (I mean, who wouldn't take their money?), I will raise a caution flag and say that short-term gains are not always preferable to long-term success - however you want to define "success".

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- Hreardon on Apr 30, 2014
  
  @ 319 - You can take the cynical view, but that's not the only component in the decision making process. Make no mistake, automaking is an arms race and if you don't have the volume to support the massive infrastructure investment then you're dead. Mercedes read the tea leaves appropriately: Audi is making steady inroads to their traditional business; Volkswagen and other mass market brands are eating into the lower end and increasingly convincing customers (perhaps not those on this side of the Atlantic quite so much) that their higher end products are just as good as a Mercedes. They also looked to this side of the pond and recognized that the Mercedes brand is strong enough to pull in tons of fresh meat. For better or worse, I'll leave that up to another debate, but the market opportunity is there: greater volume, better amortization of expenses and R&D, new bloodline of potential life customers. Fact is, if Mercedes had stuck with selling their 1980sesque tanks (I don't mean this in the perjorative), BMW selling small sedans and Audi rebadged Volkswagens, they'd all be dead now. BMW moved aggressively into crossovers and SUVs, much to the dismay of their traditionalists. The results have been overwhelmingly positive for the company. Audi branched out into its own architectures, adopted SUVs VERY late in the game, and now suggests that CUVs+SUVs will be the largest part of their portfolio within the next 6 - 8 years. No, Mercedes did the right thing. The question is whether they will continue improving the low end product and customers will be happy with them, long term. A nightmare would be selling tons of CLAs to former Honda and Toyota owners, looking for something new and interesting, only to irk them with shoddy reliability and ludicrously priced service. It'll take another 2 - 3 years to see how that starts to play out.
  
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- Bd2 on Apr 30, 2014
  
  The A and B Class, much less the taxi fleet spec E Class and all the commercial trucks and vans, haven't destroyed MB's image in Europe or in Canada (which got the B Class). And thus far, the launch of the CLA in the states hasn't hurt S Class sales.
  
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- 319583076 on Apr 30, 2014
  
  @hreardon I'm not saying that M-B shouldn't evolve, they should and they have. What I'm criticizing is the direction of their evolution, although -as you pointed out- the rest of the german brands are heading in the same direction. The problem is that german brands sell luxury and performance in the US. This droopy-butt FWD turd doesn't exactly support their brand image. Hence, the predicted erosion of brand image from my previous comment. On the other hand, I'm no brand loyalist. The badge on my auto is waaay down on the bottom of list. As long as someone is making a car that I want to drive, that I can afford to drive, I'm happy.
  
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- Johannes Dutch on Apr 30, 2014
  
  @bd2 Exactly. From the A-class to the biggest trucks on the road, there's a Benz for you. And don't forget Unimog. Heck, I remember their big farm tractors. Never hurt their cars' image one bit. I guess because it just has always been that way.
  
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- 319583076 on Apr 30, 2014
  
  @bd2 Well, I would argue that M-B marketing and brand perception are very different in Europe than in the US. My claim about brand erosion is in the US market. I've been in plenty of M-B taxis in Europe, I understand the differences in perception between the two markets (at least, somewhat). The CLA is a new car, without precedent (in the US), and has been available for what, 6 months? I assume most S Class buyers are blissfully unaware that such a thing as the CLA exists. The damage to M-B in NA is more likely to start at the bottom with C-Class drivers and work it's way up...
  
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- Th009 on Apr 30, 2014
  
  @bd2 Speaking of taxi-spec E-class, Tangier is rife with ancient ex-German-taxi-spec E-class MBs (easy to ID by the colour). Our vehicle was a W123 240D, with some 880,000 km showing on the clock. Still running reasonably well, it appeared, but lots of third-world improvisation showing in the replacement of interior parts. Would a Camry taxi be able to deal with a million km in the same kind of conditions?
  
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- EricJ on Apr 30, 2014
  
  @th009 Probably not, but neither would a modern MB. The thing about cars still plying the roads in the 3rd world is that they're the ultimate survivors. Their failed brethren might not have even made it there and the ones that are still going are the ones that just won't die. In Saudi Arabia, for example, I saw more 1993 and earlier B-bodies than I would have expected, along with some Panthers, Hiluxes, and other old Toyotas (certain eras of Lexus would also never die). I wouldn't bet on more than 400,000km with a modern E-class, not that you'd know anyhow, since the odometer is on one of the screens that probably wouldn't work anymore. They're pretty solid but have way too much stuff that could and would go wrong in the long run. Even the gear selector lever is electronic.
  
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- Ect on Apr 30, 2014
  
  The A and B Class presently represent about 20% of MB's global sales - too big to sniff at. and let's not forget the ubiquitous Mercedes taxi, devoid of luxury features, that one sees across Europe and elsewhere - but not in North America. MB USA refused for years to look at selling anything smaller than a C-Class, to preserve the propaganda that MB is exclusively high-end. From your comment, and many others that have been posted on this site, that propaganda worked a charm on Americans.
  
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- The Heisenberg Cartel on May 01, 2014
  
  It's more of a learning curve thing than a cynical cash grab. It's the move that the market asked for and look how it's working out so far. It's gotten its share of reviews questioning the quality but Mercedes has less experience engineering FWD economy cars than BMW or Audi do. Remember the original A class?
  
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- EricJ on May 01, 2014
  
  A base CLA isn't really that spectacular on paper, but neither is the competition. It's not aimed at the market of their C, E, and S cars, it's aimed squarely at the 26-30k American/Japanese portion of the mid-size market in the US. If they can pick up even a couple percent of these buyers, this car will be a runaway success. I think they have a better finger on the pulse of their target market than most realize. MB has a very bad stigma among Millennials and 70s-vintage GenX'ers in the US that this car might help them shake. I rented an E350 last week on vacation and it was an awesome tank/barge of a car that felt like a better-handling version of RWD V8 full-size cars I grew up driving (B-bodies and Buicks), even down to the nostalgia-inducing hood ornament (I love them), but it was a complete social albatross and a 40-something cougar magnet. If the CLA roughly matches the average quality and reliability seen in other mid-size cars, those badges are probably worth at least an extra 3-5k to a middle-aged woman, which will make up the vast majority of buyers. They need this to lose most of the cachet of their brand if they ever hope to redeem themselves to US Millennials. I think MB would have a better shot with the A-class as VAG is doing with their Golf and A3, but they're making baby steps so they don't completely shock us.
  
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Johannes Dutch on Apr 30, 2014

Renault is doing well thanks to Dacia ? I especially see loads of Renault's new Clio and Captur models on the road. Both sell like hotcakes throughout Europe since their introduction. This is what probably will happen: Volkswagen~Audi, BMW and Mercedes conquered almost the whole D and E segment in the past years. The C segment (or as we say "the Golf class/segment") may be next. BTW, a new Honda (any model) is almost a rarity. An exotic.

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