QOTD: How Cheap Can a Premium Model Be?

by Steph Willems

Published: June 20th, 2017

Yesterday brought exciting news for future car shoppers, especially those whose pants aren’t exactly sagging under the weight of an overstuffed wallet.You see, there’s a new Mercedes-Benz on the way. A small four-door one, though likely not much smaller than the existing CLA ~~sedan~~ coupe. Yes, it will be front-wheel drive — sacrilege, we know — and will boast any number of four-cylinder engines. It’s the A-Class and, according to dealers, it’s also Mercedes-Benz’s future entry-level model.Bottom rung. A starting point for the brand. And it might just carry a starting price of less than $30,000. Holy cats, you say, that’s less than a V6 Honda Accord! Just think of what this could do for my status in the community!Yeah, about that…Since the turn of the century, there have been other attempts to lure new buyers into the Mercedes-Benz brand with lower-priced models. The CLA itself, which now carries an MSRP of $32,700, started life in 2013 at a hair under the $30k barrier (before destination fee).Since then, critics and owners alike have identified various flaws in the CLA that should compel any upwardly mobile car shopper to hold out for a C300. It’s not just the front-wheel drive, but the overall experience. Start up a conversation about Mercedes-Benz products and you’re likely to hear someone refer to the CLA as not being a “real” Mercedes.On the subject of rear-wheel drive, let’s now talk about the C230 Kompressor Sportcoupe of the early 2000s. Engine up front, drive wheels in the back, and a starting price under $26,000. Good job? Not according to sales figures. The model flamed out quickly on these shores, partly because buyers didn’t feel a 3-door configuration was an appropriate bodystyle for a Mercedes.Now, let’s forget Mercedes altogether and travel a bit further back in time. Yes, the heady 1990s, when BMW decided to slot a new entry-level car into its 3 Series range. The front half of the 318 ti resembled that of a normal 3 Series sedan or coupe. Unfortunately, venturing aft of the doors brought on a horrible discovery — someone had rear-ended the car! No wait, it was meant to look that way. BMW’s chop job on the 318 ti’s rump made for a very awkward-looking vehicle, never mind the four-cylinder powerplant under the hood. Lots of people want to brag about owning a BMW, but can anyone pull off bragging about owning a 318 ti? Maybe in polite company. Maybe.Suffice it to say, all of these entry-level price leaders ended up cheapening their respective brands, rather than endowing them with new, lifelong fans. So, with the A-Class (expected to appear later next year), Mercedes-Benz is playing a dangerous game in its pursuit of premium and non-premium conquest sales.It’s not impossible for a premium automaker to pull off a lower-cost car without falling into Aston Martin Cygnet territory. However, it is difficult. While the CLA’s issues seem to stem from overall quality issues, the C230 and 318 ti simply didn’t look the part.The A-Class promises to be a taught (we hope) little sports sedan with minimal overhangs and seductive sheetmetal. Yes, it will be front-wheel drive, but is that the be-all and end-all for buyers? Probably not, especially for those who have never owned a Mercedes-Benz before. But the A-Class has to be good. The automaker doesn’t want a sales dud, nor does it want buyers to feel they’re not getting a “real” Mercedes.What say you, Best and Brightest? What’s the lower limit for a premium automaker, in terms of pricing and target buyers? How cheap can a premium brand vehicle be before it loses the panache born from its badge? Or, should an automaker even bother trying to reach the lower strata of buyers?[Image: M 93/ Wikimedia Commons ( CC BY-SA 3.0)]

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Steph Willems

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Cramerica on Jun 21, 2017

In Europe these are just called "German", not "Premium" or "Aspirational". In Germany they are domestic production. There are hundreds of thousands of commuter grade A3/3series/C's and A4/A6/E class made for people who perceive, often rightly, that the German chassis durability and body rust protection are simply superior over high speeds and long miles. Japanese cars may be more reliable, but an all-day cruise at 100+ MPH in a base E200 is simply a superior experience than a top-spec Toyota. Much of the TTAC flack fired at "unreliable" German cars also comes from the optioned-up electrobarges that the NA market gets. Our Euro A4 had crank rear windows, cloth seats and FWD. I think the German manufacturers have finally realized that pricing out the young professional or middle class market is ignoring a powerful profit center. They sell plenty of small engine, low option cars to European families, and Germans are frugal people. Merc and VAG are the Ford and Chevy of Germany, they just need to extend that image to North America.

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Joc6812 on Jun 21, 2017

I lease two Mercedes. Have leased two before that. Are the cars so much better than competitors? Probably not. But, in my experience, the dealer is. Once you're in the "family," they want to keep you leasing. Deals are good, not that much more than other main stream, mid line competing vehicles. The car is always under warranty during the lease, free car washes (at my dealer), nice amenities, good service, a pleasant, low hassle experience. I wanted to get a Mazda model last time around, but the dealership was so sleazy and run down...I passed. People will pay for an entry level Mercedes for the enhanced dealer experience, even if the vehicle is slightly more than a competitor and not as "good." Then, there's the three pointed star....

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