Luxury automakers like Mercedes, BMW and Cadillac would hate for their cars to be described as merely “average.” Yet new models from these and other upscale auto manufacturers are average in a way that’s undeniably appealing to consumers: they all have starting prices at around $30,000.
The average price paid for a new car is $30,803, according to Edmunds. Perhaps it’s no coincidence then that $30,000 is being called the new “sweet spot” for introductory-model luxury cars. It’s the price point at which high-end automakers can attract buyers of fairly average means. Think of this as the equivalent of luxury designers launching affordable fashion lines aimed at the aspirational masses.
While several automakers are pushing luxury-within-reach cars, Mercedes is getting the most attention with its new CLA line of vehicles. The line starts at just under $30,000 — previously unheard of for Mercedes — and is expected to attract younger buyers especially. In addition to the price, the Super Bowl commercial featuring Kate Upton probably had some role in boosting interest in the new Mercedes series. What’s particularly interesting is that Mercedes is especially targeting the average — rather than elite — consumer:
‘They could eat into the mass market,’ IHS Automotive analyst Rebecca Lindland said to Automotive News. ‘A $30,000 Mercedes — and they will cap the car at $35,000 — is an incredibly competitive price point, even against the higher-end Honda Accord.’
BMW, meanwhile, has introduced the 320i sedan with a base sticker price of $33,445 — $4,300 less than the previous low price for a 3-series vehicle. While Car and Driver is a fan of the 320i, the editors took note that the new car’s 180-horsepower engine is a downgrade from the 240-horsepower 328i:
The loss of 60 horsepower isn’t felt during daily commutes, but when pushed harder, there is an undeniable performance difference.
There are a few other sacrifices as well:
The M Sport package, for those whose interests are in show rather than go, is not offered on the 320i. The choice of interior trim in the 320i also is curtailed compared to the 328i.
These are sacrifices many drivers can live with, so long as they get to tool around in a vehicle with that iconic BMW grille for significantly less than they would have expected a few years ago. Last year, the subcompact BMW X1 hit the marketplace with an even lower base price, just under $32,000.
Other entry-level luxury vehicles include the Audi A3 and the Cadillac ATS. The latter, introduced last year, starts at $33,095 and was named North American Car of the Year in 2013. A new version of Audi’s A3 is in the works to be sold strictly as a sedan (no hatchbacks anymore), with a sticker price expected under $30,000.
There are risks for the automakers involved. One is that if prices come down too much, consumers may no longer consider these brands as luxury products. What’s more, if the engines and interiors are downgraded too much in order to cut costs, the vehicles may be perceived as cheap in more ways than one.
It’s also possible the automakers could be hurt by producing affordable luxury cars that become too popular with their customers. Mercedes, BMW and the rest want to attract new customers — folks who might otherwise buy a top-of-the-line Honda or Nissan. But it’s also possible the luxury automakers may cannibalize their own high-end sales: once a loyal Mercedes man sees that he can buy a new Benz for around $30,000, he may do so, rather than re-upping for yet another car in the neighborhood of $50,000 or $60,000.