All Things Being Equal: The Changing Face of Luxury

Matt Posky
by Matt Posky
all things being equal the changing face of luxury

There’s a growing assumption that automobiles have become so universally satisfactory, there’s nothing to gripe about anymore. We’re inclined to disagree. There will always be models that fail to meet our expectations and industry trends we’re not particularly fond of. However, we will happily acknowledge that low-tier automobiles have become decidedly less terrible when thrown together into a pool.

A weird side effect of this has been mainstream brands moving upmarket and offering a bevy of luxury options while extravagant nameplates do the inverse. For example, the Kia Cadenza can easily be outfitted to surpass the base Cadillac ATS in terms of luxury features and overall price. It doesn’t have the prestige, but you’re still buying a larger automobile with a focus on lavishness that can deliver on an exceptionally quiet and comfortable ride.

On the flip side of things, Cadillac is busy prepping its new small crossover for the general market. Priced for a mainstream budget, the XT4 should be a win for General Motors. But it further showcases the amount of overlap happening within the industry right now. Value manufacturers are becoming increasingly willing to move upmarket while luxury brands are trying to burn the money candle at both ends.

Understanding why is easy. GMC’s Denali has proven a golden goose for General Motors. It’s making them a fortune and other manufacturers want to at least have the option to give mainstream buyers the opportunity to purchase trim levels with a higher profit margin. Meanwhile, luxury brands want to open themselves up to new customers without losing their status as a premium automaker.

Automotive News further examined the trend, with help from Kelley Blue Book and Cox Automotive. In a recent survey, the duo found that roughly one-third of “luxury intenders” said they would absolutely consider a non-luxury vehicle if it had the upscale features they wanted. And, with so many value brands going upmarket in their options, they can probably find almost everything they’d desire in a Hyundai Elantra.

“Luxury is being redefined by consumers and automakers,” Cox Automotive analyst Michelle Krebs told Automotive News. “Consumers who are interested in premium or the upper levels of non-luxury, they want luxury-type features, but they want it at a perceived value price with this idea of increased practicality. Clearly, the automakers want to make more money by offering them, but consumers are already thinking of luxury a bit differently.”

Luxury icon Mercedes-Benz moved decidedly downmarket in recent years, expanding its lineup to include more small vehicles that utilize a front-drive architecture. It also began selling them in more places. Just think about the CLA and new A-Class. M-B isn’t alone, either — most premium brands have added a new bottom rung to their ladders of luxury. However, they’re frequently offsetting that by doing the same at the top of the market — consider BMW’s relatively recent addition of the 2 Series and forthcoming 8 Series. While both follow a similar basic recipe and can be had with all manner of niceties, the former starts around $35,000 while the latter will be well into the six-figure range.

This is mimicked by the mainstream brands, though. Using the Kia example once again, we can see that it still offers the Rio at a highly competitive price (about $14,000) with a bevy of desirable options. But it also has the K900, which is starts around $50,000 and has enough kit to give some premium nameplates a serious run for their money.

We suppose the takeaway from the Cox study is that it still pays to shop around, which isn’t exactly groundbreaking news. But, with even basic models offering things like heated seats and advanced driving aids as an option, it makes more sense than ever to look twice at mainstream brands — regardless of what you’re in the market for.

It’ll also be interesting to see how far this trend takes us. We’ve heard stirrings that several luxury brands are still looking at moving further downmarket with their SUV offerings, while mainstream marques are overtly doing the opposite with the option lists and trim lines of their most expensive vehicles. Maybe we’ll soon reach a point where nameplates are meaningless and the only deciding factor is what tech you can afford… or maybe it always feels this way as cars evolve to become universally better.

[Image: Kia]

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  • Arach Arach on Aug 28, 2018

    I find it interesting that the OP mentions maybe someday nameplates won't matter. Today, I find the primary difference between cars just the nameplates. If you put a Mercedes badge on my Hyundai, I'm sure I'd pay $10-20k more for it? I don't believe "high end" brands are any better than the low end, but you pay for that badge to show off your wealth and coolness. You know someones broke when they drive a Kia, right? I wanted to buy my wife a kia but she said she'd rather take a bus than be caught in a kia. I think that is the general take on the market. Its all about brand. I think Hyundais are way better than Porsches, but I want to drive a Porsche because they are cool, and Hyundais are dorky.... but I drive a Hyundai because its what makes financial sense. I give up coolness every day in the name of practicality. This is the concern I've had with the genesis. I think the genesis is by far better than most other luxury makes, but I'll pay more for a much crappier car just for the brand. We've already gotten to the point where brand only matters in cool factor and to show off. I don't think high end brands are ACTUALLY any better than the low end brands.

    • Jkross22 Jkross22 on Aug 28, 2018

      Drive 'em back to back and have your wife drive 'em. Lux brands are relying too much on the past and it shows when you go from a Honda to a high line brand and walk away thinking wtf.

  • Magnusmaster Magnusmaster on Aug 28, 2018

    All D-segment cars and beyond (that is mid-size or bigger in USA terms) are luxury cars. The difference between a third-world car and a first-world car is orders of magnitude larger than the difference between a mainstream first-world car and a luxury car, even when comparing different specs of the same model.

  • VoGhost I'm clearly in the minority here, but I think this is a smart move. Apple is getting very powerful, and has slowly been encroaching on the driving experience over the last decade. Companies like GM were on the verge of turning into mere hardware vendors to the Apple brand. "Is that a new car; what did you get?" "I don't remember. But it has the latest Apple OS, which is all I care about." Taking back the driving experience before it was too late might just be GM's smartest move in a while.
  • VoGhost Can someone Christian explain to me what this has to do with Jesus and bunnies?
  • Del My father bought GM cars in the 60's, but in 1971 he gave me a used Datsun (as they were called back then), and I'm now in my 70's and am happy to say that GM has been absent from my entire adult life. This article makes me gladder than ever.
  • TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
  • 3SpeedAutomatic Does this not sound and feel like the dawn of ICE automobiles in the early 20th century, but at double or triple speed speed!!There were a bunch of independent car markers by the late 1910’s. By the mid 20’s, we were dropping down to 10 or 15 producers as Henry was slashing the price of the Model T. The Great Depression hit, and we are down to the big three and several independents. For EVs, Tesla bolted out of the gate, the small three are in a mad dash to keep up. Europe was caught flat footed due to the VW scandal. Lucid, Lordstown, & Rivian are scrambling to up production to generate cash. Now the EV leader has taken a page from the Model T and is slashing prices putting the rest of the EV market in a tail spin. Deja vu……