QOTD: What Does Premium Mean Anyways?

Derek Kreindler
by Derek Kreindler
qotd what does premium mean anyways

“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. ‘

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  • Genuineleather Genuineleather on Oct 31, 2012

    Let's not conflate "premium" with "luxury". Premium is within reach of the masses. In fashion, this is referred to as "contemporary" or "bridge" clothing (see: Coach, Theory, Armani Collezione). The quality may be better, the materials superior, and the brands shinier, but they are not the ne plus ultra of their category. True aficionados recognize most the entrants in this category as merely "lifestyle dressing." The C-class, 3-series, all Acuras,and 95% of Audis are found here. Luxury is not. It is expensive, exclusive, and special (see: Chanel, Kiton, Giorgio Armani). In other words, the best offered. S-Class/7-series are luxury cars, as are some US-spec midsizers. Acura, Lincoln, Cadillac, and possibly Infiniti still don't compete in this segment, and thus cannot be seen as true "luxury" brands.

    • Eric 0 Eric 0 on Oct 31, 2012

      Right, but the Japanese do not really have luxury brands, so much as luxury products, like the Toyota Century, or Seiko Grand. The Germans also don't really have Luxury brands, (at least not cars,) although they own all of the once British luxury brands.

  • Ajla Ajla on Oct 31, 2012


  • Bbbuzzy Bbbuzzy on Oct 31, 2012

    Here's a good example. Your value system drives you to support Toyota and Ford, yet you admit there are things like "attention to detail" and a "premium interior" that you have some interest in paying for. Lexus and Lincoln are your solutions, "premium" versions of things that matter to you.

  • CelticPete CelticPete on Nov 01, 2012

    An inline 6 and RWD doesn't matter anymore? Wow I didn't know time could defeat physics. LMAO. For my money - the German premium cars for the most part do FEEL more premium. They really manage to balance sporty and comfortable in a way I haven't felt in most Japanese or american cars. For me a Caddy SRX4 didn't feel more premium then a Ford Edge..when it comes to how it drives. For my money no FWD car is premium - only AWD and RWD need apply. This of course spells trouble for the German luxury makes as they plunge into the world of FWD hatches. They would do well to let the everyman brands handle it - like Mini and VW. For each FWD warmed over Focus they sell - they dilute the brand identity.

    • See 2 previous
    • Threeer Threeer on Nov 01, 2012

      @th009 I think he meant the "1,000,000" TOTAL BMW buyers, not those that bought the 1 Series M...