Back in the mid-’90s, I sat and listened as Audi designer Peter Schreyer — now the man responsible for all those good-looking Kias — ran through the media briefing for the C5 Audi A6. Smooth and rounded, sporting bumpers that blended almost seamlessly into the bodywork with a determination not seen since the Porsche 928, that A6 was a striking car: original and fresh and modern, yet timeless and elegant. It still looks good 15 years later.
Schreyer’s A6, plus Freeman Thomas’ Bauhaus-inspired TT coupe that followed it onto the market a few months later, marked the turning point at which Audi truly began its transformation from a slightly obscure and faintly eccentric Bavarian automaker to a full-fledged member of the Premium Club.
Ah, yes — the Premium Club. It gives you permission to charge significantly more money for your car than the other guy can, to exploit the fact that in terms of the actual materials and labor costs, it doesn’t really take that much more money to build a BMW than it does a Chevy. Membership in the Premium Club is the modern auto industry’s golden ticket. Why? Because although premium (or luxury) cars account for just 12 percent of global vehicle sales, they generate 50 percent of global auto industry profits. No wonder everyone wants to join.
Getting into the Premium Club used to be fairly straightforward: You just built a car that was faster and sportier; or more lavishly equipped and strikingly designed; or smoother, quieter, and more robustly engineered than the run-of-the-mill stuff. Then you charged a premium price for it. And because rich people bought your cars, people who wanted to be rich wanted to drive your cars, too.
It may have been straightforward, but it wasn’t necessarily easy. The Premium Club is surrounded by the graves of carmakers that got it wrong, from Duesenberg and Hispano Suiza to Facel Vega and Bizzarini. Cadillac, a foundation member of the club, is knocking on the front door and trying to get back inside after spending most of the past four decades in the maroon velour and plastic wood wilderness. Lincoln, another former member that forgot the rules, is still shuffling along the road holding its pants up with one hand and trying to remember where the door is.
Unfortunately, the problem for any automaker wanting to join the Premium Club these days is that many of the differences in design, quality, and functional attributes that clearly defined who was — and was not — a member even 15 years ago are no longer obvious. You can now buy a Chrysler sedan with an eight-speed automatic transmission, a Chevy with 580 hp, and a Ford that looks like it was designed by Aston Martin. Everyone has anti-lock brakes and stability control and airbags and engines that are cleaner and more efficient and require little maintenance.
So what makes people pay more money for a car that does more or less the same stuff as half a dozen others? Is it simply badge snobbery?
In many cases, probably — I’ve never forgotten a California Mercedes-Benz dealer telling me a few years back about the woman who walked into his shop and said: “I have $369 a month left over. What can I lease?” Engineering technology, safety, and 125 years of history be damned. She didn’t care whether it was a C-Class, an SLK, or a G-wagen. All she wanted was to drive the three-pointed star.
Nineteenth-century Irish writer Oscar Wilde once suggested a cynic is someone who knows the price of everything, and the value of nothing. I wonder what he’d say about many of today’s luxury car buyers.
