• Oct 14, 2009
Up until very recently, the reason that you bought a BMW 3 Series or a Mercedes-Benz C-Class was to prepare you to buy a 5 or an E in a few years. You know, ladders to climb, blowing up to do, de-luxe apartments in the sky to own. These days, according to a new study, that is less and less the case: fewer premium buyers are moving up and more buyers are actually moving down.

According to numbers compiled by the Power Information Network, in 2006, nearly 16 did so. And compared to 2006, this year two other categories showed 4% gains: people moving from large to mid-sized cars, and those moving from mid-sized to compact cars.

Gas prices have a bit to do with that, as does the democratization of high-end features, but the real story appears to be that unless David Stern signs your paychecks, being a baller is out. Customers don't want to look like they're flaunting their money, or they simply don't want to spend it. Even brand-loyal buyers are either keeping their cars, or instead of buying new ones they're going for pre-owned certified or an off-lease deal. Even Acura and Lexus are seeing their customers turn their aspirations downward.

According to Automotive News, brands that appear to be poised to benefit from this trend include Hyundai and Audi. The Korean firm's Genesis sedan is an all-the-luxury-you-want option for $10,000 less than most comparable brands. Less flashiness and an engineering-led message could also be the catalyst for Audi, whose sales declines are a third of the luxury market's overall. Said Scott Keogh, Audi's chief marketing officer, "There is affluence, and consumers have means, but frivolousness has gone away."

[Source: Automotive News, sub. req'd]


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 53 Comments
      • 5 Years Ago
      I was first considering a 3-Series, but with news and reports of the new VW Golf TDI, my tastes have swayed significantly. I'm a fan of small cars and utility, but also having a statement behind my car. I believe the Golf will rest better (on my wallet too) than the BMW, and will be more fun and reliable in the long run.
        • 5 Years Ago
        Mark K,
        Your comment was caked in a layer of sarcasm so thick, I don't think I can see straight.
        Listen, it doesn't take an MBA to realize BMW has enough trouble moving 3-series diesels in the states (no matter how amazing the car is), so I don't think we'll be getting an 123d's anytime soon. Besides, isn't BMW taking enough risks with the 5 GT and other outrageous models in its US lineup?

        Anyway, I love this new "lesser luxury" fad.
        Who needs a Benz and a Burberry purse? Soon all the nouveau riche will be driving their Genesises (Genesi?) to Target!
        • 5 Years Ago
        Neil 41487:

        "I was first considering a 3-Series, but with news and reports of the new VW Golf TDI, my tastes have swayed significantly. I'm a fan of small cars and utility, but also having a statement behind my car."

        I hope you are aware of something called BMW123d. You are getting (at best) medium-low-level technology in Glof TDI, if it ever gets here medium-technology in Golf GTD.

        Now, if anybody in BMW U.S.A. had a minimum of good sense, they would import unbeatable (read: highest technology available diesel) 123d. Costing, compared to European prices of BMW 130i, around 28-30k$ here. That is to say, 3-5 thou more than Golf GTD.

        Forget it. It seems pretty obvious to me that American-schooled MBAs have a lot more business knowledge than their European counterparts. This is the reason why American car industry prospers and is most profitable business of them all, while European carmakers (offering those unprofitable and brand-damaging "thingies" like 123d) are going bankrupt at a rate of one every month.
      • 5 Years Ago
      I've noticed this trend for quite some time now. Our TSX is selling like crazy. Great luxury car, 4 cylinder, 30 MPG, 5 star crash rating (all catagories) all the bells and whistles are standard all for well under the $30,0000 mark. Our Genesis, is also selling hot.
        • 5 Years Ago
        Jerry:

        "Our TSX is selling like crazy. Great luxury car, 4 cylinder, 30 MPG, 5 star crash rating... "

        I certainly do hope you realize you are driving/selling a *proper* Honda Accord. The same Honda Americans refused to buy above X dollars. Actually, since I do have a little bit more faith in Americans then in their car executives, let's say they were *induced* to believe that X dollars was WAY too much to pay for a Honda.

        Another infinite wisdom of American Business School - trained executives. Why pay 28 thou for an Accord (God forbid you pay that much for a HONDA?!?!) when you can pay 34 thou for an Acura that is (in this case completely accurate term - 99.5% minus the badge itself) rebadged Accord?
        • 5 Years Ago
        Acuras aren't what I consider luxury cars, especially a TSX. They, and Infiniti, are more entry luxury in my eyes, there's just no refinement or detail there.
      • 5 Years Ago
      Is a 5 series BMW even better than a 3? The most successful part of their range is the 3 series- I guess uf you need psace, or are getting on in years, a 5 or 7 is something you "move up" to, but not if you're just into the driving. This isn't true for Mercedes, as their bigger cars are clearly where they make their hay.
      • 5 Years Ago
      who needs a luxury car to prove how affluent i am...i'm lucky i have this huge d!ck!

        • 5 Years Ago
        ROFLMFAO....... That made my day stev-o, now I don't feel so lonely.....
        • 5 Years Ago
        who needs a luxury car to prove how affluent i am...i'm lucky i AM A huge d!ck!


        (corrected)
      • 5 Years Ago
      I saw this coming a long, long time ago.. The price of cars is becoming absolutely ridiculous. People are beginning to realize there's better things to do with their money. Buying a certified pre-owned vehicle gives you basically the same experience as owning a brand new vehicle - at a much lower price.

      I'd love to own a Mercedes S550 but the price the way I want it is $110,000.00.. I'm just not spending that kind of money on a car. The new BMW 750Li is outrageously priced as well. And Lexus isn't far behind.. Forget about it..

      Sal Collaziano
      http://www.madisonross.com
        • 5 Years Ago
        What I saw coming a long time ago were people turning away from buying new top-tier luxury cars because the companies who sell them were becoming too arrogant with their pricing. You can find posts on various forums of me saying this a couple of years ago - and this blog post is a verification that it's now beginning to happen - enough-so that it's something to talk about. There are plenty of people who can afford to buy an expensive car like a Mercedes S550 - but simply don't feel good about spending the kind of money required to drive one.

        Sal Collaziano
        http://www.madisonross.com
        • 5 Years Ago
        Erm, precisely *how* does "Buying a certified pre-owned vehicle" for the same or less money explain the move to smaller vehicles?

        Didn't see *that* one "coming a long, long time ago", did you?
      • 5 Years Ago
      As I look at The badge engineering of the "new" Gm (Vue is warmed over 2-3 times across the lineup) and compare it to what Hyundai VW Ford have at about the same price points and you have to wonder if GM is even competitive anymore in the sub 40k category.

      Cadillac, the Silverado/Sierra and the Corvette aren't large enough pillars for GM to stand on. Expect more taxpayer "investment" soon
        • 5 Years Ago
        Don't forget the Cobalt. That car is supposed to drive very nicely and even won a couple of comparisons with its peers.
      • 5 Years Ago
      I agree with you John. The new Acura TL is as big as the RL, Mercedes E Class, BMW 5 Series, Lexus GS and Infiniti M but it's supposed to be compete with the entry level luxury sedans from all those car companies.
      • 5 Years Ago
      "the reason that you bought a BMW 3 Series or a Mercedes-Benz C-Class was to prepare you to buy a 5 or an E in a few years"

      I bought a BMW 328, and I have absolutely no intention of moving up to a 5-series. The 3-series is plenty big. If I needed more room, I'd move to a 5-door hatchback, not a larger sedan.
      • 5 Years Ago
      People are sticking with a 3-series or A4 because they are the size of an old 740i and A8! What we are calling 'entry level cars', when compared with their predecessors, are half again as big (and heavy). People aren't accepting smaller cars, the 'smaller cars' are getting bigger. Look at that photo of the new Taurus SHO for an example, the original was the size of (if not a little trimmer) than a new Fusion, the just-released SHO looks like a Sequoia beside it.
      • 5 Years Ago
      Why is got to be the new black why not yellow,red,pink or blue.
        • 5 Years Ago
        When someone says something is "the new black" they mean it is the new in-style thing.

        i.e. - When a major clothing designer decides to make a line of clothes in only yellow, they are stating that "Yellow is the new black."

        In that sense, the author is saying that it's now "in style" to buy a lesser car.
        • 5 Years Ago
        Am I the only one who doesn't understand what "black" even means in this context? Did I miss something?
      • 5 Years Ago
      "Customers don't want to look like they're flaunting their money"

      I can buy that. People always seem to look at you weird when you drive a $60,000 BMW and they're driving an Accord, kinda like deep down they think you're some insecure doosh who needs to inform people that you have a lot of money. Inside you say to yourself "Who cares what they think" but in all honesty we all do to a certain degree whether we've matured to the point of being able to admit it or not.

      I think it also has a lot to do with the fact that your $26,000 Accord is all the car a Lexus is that costs twice as much, so why throw your money away trying to impress your friends and neighbors?
        • 5 Years Ago
        I think you've hit it on the head. I sell Audis, a brand known for thier well-educated customers both in general and about the product itself. However, when I started this job several years ago, I was blown away by two things; First, that the vast majority of luxury buyers are motivated ONLY by the percieved prestige of whatever brand they decide fits thier image. And Second; just how many hundreds of thousands of new BMW's/ Mercedes and Lexus's are sold per year- how can you consider your car 'prestigious' when EVERYONE has one??

        Audi has signifigantly cut back it's production for the US market; I am one of the few that thinks it was a wise decision.

        • 5 Years Ago
        "Go drive a Lexus LS and tell me what Honda compares"

        I don't have to go drive an LS, I owned one for 3 years. Very nice car, but it did nothing a nice Accord won't do.
      • 5 Years Ago
      based on your grammar and the content of your message, it's clear that you aren't educated in either.

      Build quality is not something that can be measured simply like a lexus commercial would suggest (although GAP tolerances- the consistancy of distance between the fittment of body and interior pieces and panels is a good measure: Audi has the best in the industry) but I'd like to see your source for the "tolorances" you are talking about.

      Also,the fact the Lexus LS is quieter means nothign more than the amount of sound deadening materiral that they stuff in the thing. If Audi wanted that car to be quieter they would have done it, but Audi drivers prefer to actually hear the road and the car when they drive. I think the A8 is a little TOO quiet.

      Finally, as you proved yourself to be a whore for marketing; Yes, BMW does say "ultimate driving machine", Mercedes wants you to believe that you aren't successful until you are seen driving one, and Lexus has convinced millions of people that it's worth paying twice as much for a toyota with leather and maple syrup in the suspension. However, marketing is not fact, and if you were actually IN the industry you would understand that what I'm saying isn't a secret or my own extreme view.
        • 5 Years Ago
        Who are you replying to, dingdong?
    • Load More Comments