Any luxury automaker that doesn’t have a premium compact on the market is missing out on a huge, and potentially imperative, market.
No longer are BMW, Mercedes-Benz, and Audi in the business of selling only large luxury vehicles to well-off Boomers. The market has shifted in favor of millennials, and with that change comes the need for a smaller breed of luxury-brand vehicles.
That’s why we’re seeing mini crossovers, tiny sedans, and hatchbacks from Audi and BMW. Now, after 20 years of existence in European countries, the Mercedes-Benz A-Class will join the party.
The car business has become one of volume, so it makes sense to introduce a car to a new market only if it promises to sell in high numbers to its target audience.
20 years ago, a Honda Civic could be had with roll-up windows, no power steering, and a stick across all trims. The Civic now offers available heated rear seats and competes, albeit in Type-R guise, with $40,000 cars. At roughly $32,000, the Mercedes CLA starts lower under the base price of a loaded Civic, and people are buying both of these cars.
The economy in the US has pulled up nicely since the great recession, and the average transaction price of a vehicle in the US is hanging well over the alleged starting price of the A-Class (just under $30,000).
You’re not alone if you’re a little surprised that Mercedes would import a model below the CLA-Class, considering the two would be close in size and price. To avoid model cannibalization, German automakers have become pretty good at selling two similarly sized vehicles by saying one is a sedan and one is a coupe, so that’s probably the direction Mercedes will go. It’s also possible that Mercedes may increase the price of the CLA to differentiate the two.
If the A-Class comes to the U.S., which it looks like it will, it’ll come with a price starting in the high 20s. Sure, it’ll be diminutive, and it won’t have the same level of interior finish or the absolute luxury for which Benz is known, but it will have that 3-pronged logo luxury-car buyers love so much.
That should be enough to propel it to success on the backs of a minimalist generation that still values luxury.
Would you want to test-drive a Mercedes-Benz A-Class? It could be at dealerships next year.
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