Luxury Brands Doing Well On The Back Of Lower-End Models
Want to know why Mercedes, Audi, Lexus and all of the other luxury players are doing so well these days? Because of less-costly, lower-end luxury models.
The low-end models, whose starting base prices are between $31,000 and $35,000, are pulling in new customers who desire the status a given badge conveys, USA Today reports. Edmunds.com senior analyst Jessica Caldwell explains:
Luxury sales have increased as products have become affordable to a wider audience. Of late, luxury car brands have focused on the lower end of the price spectrum, introducing models such as the Lexus NX, Mercedes-Benz GLA, BMW X1 and Porsche Macan, which are slotted below existing popular SUVs on the price spectrum.
Caldwell adds leasing is also helping bolster the luxury brands’ high status, as most of their offerings are leased. Those who’d rather own their low-end luxury ride opt for long-term financing with low interest rates, with payments spread out over several years.
The brands’ consumer base is also varied. Kelley Blue Book analyst Akshay Anand said buyers were coming from every corner, “especially as Millennials start to create more wealth for themselves and continue to be as aspirational as ever,” helped by an improving economy.
[Photo credit: Mercedes-Benz]
Perusing these comments, I realize that since I've been reading TTAC (2008), the wit and wisdom of the B&B have reached an absolute high-water mark. Someone should hire actors to read the comments aloud and then turn them into a podcast.
"Luxury sales have increased as products have become affordable to a wider audience." That worked for Cadillac for a while in the '70s.
I have yet to see a CLA vs Cimmaron comparison. After all they are based on A and B-class models. I do see plenty around in the NYC area. They are usually driven by Millennials who said "Hey it's sporty, has the 3-point star and is the price of an Accord/Camry. Though every time I hear one accelerate it sounds like a Evo or WRX with less refinement.
Lots of Chinese students where I live drive these entry level "luxury" vehicles. Actually, there is a strict nomenclature based on the parents' status back home. Rich Chinese parents send their children to attend school in Canada and USA. As soon as they land, the kids go straight to dealerships and based on economic prowess of their family they purchase anything from BMW X5 to X1 or Mercedes CLA. Another very popular model with factory owners' kids is the Porsche Cayenne Turbo. There's a very simple hierarchy. Daddy has big successful factory means kids will drive Cayenne Turbo or Mercedes G-Wagen. If a small factory, then X1 or CLA. If they are sent to USA or Canada by their government with a scholarship, then the bus/bicycle it is. There isn't much in between. It is either German luxury vehicle or the bus. Due to historical conflicts, the Japanese luxury brands normally are not bought at all by Chinese kids, or if they are, the numbers are insignificant. I know it sounds like overgeneralization but...