Mercedes, Audi and BMW ‘downgrade’ to attract new customers of popular brands

Three new premium German cars and a single goal: the Mercedes-Benz CLA, Audi A3 Sedan and BMW Series 2 are postulated as three key innovations for their respective brands in the quest to compete in the mass market with brands such as Ford or Toyota to expand their range of customers.

The test starts with CLA Mercedes-Benz, a pioneer in the revolutionary segment that combines the versatility of compact sedans with the sporty coupe design. Launched last September, the CLA has become a decisive actor, for example, in the American market, which has paved the way for the signing of the star to dethrone BMW as Number 1 in sales.

And as we know, the automotive sector is extremely competitive so the other brands will soon also hit the market to compete with their counterparts, the other two premium German cars: Audi A3 Sedan and the BMW Series 2. New cars from BMW are more than capable to keep up with the competition.

The aim of these cars is simply to try to attract new customers in large markets such as USA from the more popular brands with affordable prices. In this role what will play a decisive role is the price: the CLA of North America starts at 29,900 euros and in the absence of smaller models there, it will become the cheapest model in that Mercedes range and the only one that sells for less than 30,000 euros.

Thus, with the combination of attractive design and affordable price, Mercedes-Benz will try to persuade a target audience, that was previously not its target, from other firms whose catalogues are mostly much more accessible by the pockets of the not so wealthy people. Thus special focus is placed on a younger audience, which is intended to be captured in order to stick to the brand for long.

Because in the end, once they have tasted the sweetness of luxury cars, they will like to retain them for a long term, which for example leads to chasing Mercedes for several years.

“Luxury has always been an aspiration and once you’re part of it, you tend to want to keep it,” said Jeff Schuster, an analyst at LMC Automotive. “It tends to be a greater loyalty to the premium than the popular brands. That is definitely a motivating factor to expand the range.”

The risks of downgrading

But these less expensive models also have a potential downside for their manufacturers. Offering much cheaper vehicles than cars representing the top end (S Class, Audi A8), they risk diluting a historical picture based largely on that they’re unattainable for the average driver. In the street, it is essential to maintain the reputation for high-end firms such as Maserati and Jaguar in their challenge to the German manufacturers.

Cheaper models of Mercedes, BMW and Audi “bring the fight to brands that not long ago could not even compare,” says Kevin Tynan, an analyst at Bloomberg Industries. “I understand the need for volume, but you’re killing exclusivity. That cannot be good,” he concludes.

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