Interesting piece from the Auto Extremeist, the industries resident pirate...
He does have a point, eventually its all just soupBut the reality is that there is a not-so-subtle downside to this strategy unfolding, which could have dire implications going forward. And that is that the luxury automakers’ push down-market is not only putting added pressure on overall pricing and costs for the market as a whole, it’s also putting intense pressure on luxury brands to prove their worth at the higher end of the pricing stratosphere, in order to justify the ever-increasing premiums these companies are charging for them.
And therein lies the essence of the looming marketing conundrum for these manufacturers: If consumers become conditioned to getting Mercedes or BMW or Audi models that are “just like” these manufacturers’ more expensive offerings, at what point is there a seismic shift in the market where consumers just stop buying the more expensive step “up”? For instance, at what point does an Audi Q5 intender say out loud, “I’m just going to get a Q3 and save myself a ton of money.”