What makes a luxury car and what is a luxury car?
We call brands such as Mercedes-Benz, BMW, Cadillac, Lexus, Audi, and Acura “luxury” brands. We say that the Mercedes E-class is a “luxury” car. But what really is a “luxury” car, or a “luxury” brand? Are there different levels of luxury? Does price matter? These are all questions that I will (attempt) to answer in this post.
We call the BMW 3-series a “luxury” car…
Yet this Kia Optima that can be optioned with Nappa leather seats that are heated and cooled, and rear sunshades, navigation, and more; is not considered a “luxury” car. It is classified as a mainstream midsize sedan. The BMW doesn’t even offer nappa leather. It uses a lower grade known as dakota leather. The Kia has more features than the BMW, yet it is not classified as luxury. Why not? One simple answer: Brand cachet. Kia is a newer car company, and although they lead in quality and reliability today, their first cars did not leave a good impression. Take for example the Kia Spectra:
It’s cheap, crappy, and boring. Cars like this ruined Kia’s reputation early on, and even though today they make excellent vehicles, the public is still a bit skeptical and wary about Kia. Yet BMW, made glorious, fun to drive sports cars in the 20th century. The public recognizes BMW today as a producer of high-quality, fun-to drive cars (although the cheaper models aren’t very luxurious inside and not as fun to drive as before). BMW has a good reputation, but they have slacked off a bit, as their brand is carried primarily by badge snobbery and reputation. Kia tries really hard, but their sales and public reputation is still not at the level of BMW, even though a lot of their cars are arguably better. Brand cachet and history is only one of the reasons we consider a car or brand “luxury”.
But, you may ask, what is “luxury” supposed to mean. In theory, luxury is something that goes beyond the basic needs and gives pleasure, satisfaction, and happiness. It is a want, not a need. A frill, one might say. So, if this is what luxury means, why isn’t the Kia, (which has more so-called “luxury” than the BMW), called a luxury car? By the dictionary definition of luxury, 3/4 of all mainstream cars today would be classified as luxury. Therefore, Kia in theory is a “luxury” brand, and the Optima is a “luxury” car. The Optima is cheaper, and has more value and “luxury” than the BMW. Therefore, in some cases, price does not always have an effect on whether something is “luxurious” or not. Yes, that’s right. A dictionary definition “luxury” good is cheaper than a mainstream good. This truly blurs the lines between luxury and mainstream, and is a good reason to not get a luxury car just for the “cachet”. After all, the Optima SXL is significantly nicer and has way more features than a BMW 320i base!
After explaining why we (the public) call a car or brand “luxury”, I will now be moving on to the second part: The tiers and levels of luxury. Personally, I think there are 3 tiers:
The first tier is Super-luxury (i.e Rolls-Royce, Bentley)
The second tier is luxury (i.e Audi, BMW, Mercedes-Benz, Lexus, Genesis, Cadillac, Maserati)
The third tier is premium (i.e Buick, Acura, Infiniti, Lincoln)
These tiers are based on the actual quality of the products, and also consumer’s perception; for example, a tier 1 Rolls-Royce is nicer and has more cachet than a tier 3 Acura.
But for example, why is a Lexus tier 2 and an Acura tier 1? Here is an explanation: Lexus has the F-sport series (competes with BMW M and AMG), while Acura has no sub-brand. Lexus also has a true flagship, the full-size V-8 LS, while Acura’s flagship is the V-6 midsize RLX. Look at the backseats below and you will see what I mean:
The Lexus is significantly nicer. It looks like it could be a Mercedes. The Acura’s backseat could be in a Honda Accord. Why? The Lexus is a true flagship.
Genesis Motors (Hyundai’s luxury brand) is a tier 2 because they too, have a true flagship, the Genesis G90:
Buick is an odd case, though. As GM says, Cadillac is supposed to compete with Mercedes, BMW, Lexus, and Audi, making it tier 2. However, Buick sits in between Mainstream Chevrolet and Full-on Luxury Cadillac, making it a “premium” brand, a tier 3 brand. Buick competes with Acura and the like. They sell cars with luxury-like features, at an affordable price. Lincoln is a weird case as well. They are tier 3 for now, but if the Continental generates cachet and revenue, and the new yet-to-be-unveiled 2018 navigator (Escalade competitor) is a success, then Lincoln may become a tier 2 luxury brand. Cadillac had a few rough spots, like the awful Cimmaron and Catera, but overall, its reputation stayed relatively solid. Lincoln had more rough spots, so their reputation was hurt far more. This is part 2 of the post.
Thanks for reading my explanation on luxury brands and cars and comment below if you have any questions, opinions, or requests. I’ll be happy to respond. Thanks!