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It Just Needs More Power

Posted in Posts, and Syllabus Schedule

Features which, in the past, were only found on premium models are now available on entry level models. From leather to feature rich infotainment systems, it is surprising what one can get while still being fairly thrifty.

This leaves auto companies with a problem, however: car makers are running out of ways to sell luxury cars. What can Mercedes possibly put in its upcoming CLA, for example, to differentiate it from slightly less expensive models, if so many features are no longer exclusive to premium segments? There are a number of possibilities, but the one which I find most interesting is also one of the most simple: more power.

Car companies are simply producing cars with more and more power. Cadillac, for example, recently announced that its new XTS will get a massively powerful V6 engine, producing 410 horsepower. Even more surprising, the XTS isn’t even Cadillac’s performance model. The company simply believes that a more powerful engine will sell the car. Brands have also noticed that the median incomes of people buying performance cars, such as BMW’s M// brand, are likely to be higher than for the normal models.

How this strategy fits into the trend of lighter and more efficient vehicles remains to be seen, but the outlook doesn’t appear to be good.

Sources: online wsj and

One Comment

  1. Hence turbos: holding horsepower constant, they allow smaller engines. So a V8 may be awkward in terms of the public policy environment, but a turbo V6 may pass muster.

    If you shop base cars, you’ll still find that they are pretty basic. For someone on a budget, leather is not an option. However, in the PACE competition we are indeed seeing new technologies introduced not on luxury cars but on mainline, mass-market vehicles. Ford launced Brose’s kick-to-open liftgate not on a Lincoln but on the Escape (and C-Max). The newest generation of tire sensor technology launched on the Dodge Dart, not on a high-end vehicle. Some safety systems (crash avoidance, for example) are expensive to make, at least in the early stage, and still are launched by luxury marques. But yes, the features available today on even a modestly-priced new car are impressive.

    And your bottom line is that the days of luxury cars are numbered — if consumers buy them for their features. If status is what matters, then pricing out of reach of the hoi polloi is of the essence, the trimmings only aid in convincing the country club set to ante up the price.

    May 17, 2013

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