Most of us don't have disposable funds where we can buy the most expensive consumer goods on the planet, regardless of their quality. When it comes to cars, we all want a premium vehicle, right? Well, you no longer have to look at the premium brands like BMW, Audi, Mercedes, Lexus, Jaguar, or Land Rover to get luxury. Carmakers like Mazda, Kia, and Hyundai are giving their vehicles premium materials, luxury, and convenience for half the price. You read that right.
The luxury brands have something to worry about but not because mainstream brands have really eaten their market share. But the mindset about luxury could be in a state of flux. It seems three non-premium brands have figured out a way to bring luxury to the masses. For example, the sales figures for vehicles like the Hyundai Palisade are off the charts. Last year, the model sold over 24,000 units... that's about twice as many BMW X5s. Okay, so it's not apples to apples, but it's hard not to draw comparisons in terms of what car buyers need and want.
What is Automotive Luxury?
Admittedly, much of the luxury mindset has to do with brand cache. The Germans, especially, have had that formula nailed for decades. BMW, Audi, Porsche, and Mercedes have figured out their respective formulas. But that doesn't mean manufacturers of more affordable vehicles can't use those formulas to do their own take on luxury. In fact, we're seeing higher levels of premium materials and features at price points that aren't even considered premium these days. Here's a list of features we expect to see on premium vehicles:
- LED Lighting
- Nappa leather seats with heat and ventilation
- Heated Steering wheel
- Real wood and metal trim
- Large infotainment system (10+ inches)
- Turbocharged V6 or V8 power
- Adaptive Cruise Control, Lane Keeping Assist, Automatic Emergency Braking
But you don't see these laundry lists just on the fancier brands. When you pit a premium branded vehicle against a mainstream one, the comparisons can be staggering. For example, we just priced out BMW's least expensive vehicle, the X1 crossover. If you add optional features like all-wheel drive, leather seats with heat, LED headlights, power liftgate, wireless device charging, lumbar support, power-folding mirrors, etc., the price climbs to just under $45,000. And the X1 holds only four people comfortably and has a 228-horsepower turbocharged four-cylinder engine.
If you buy the loaded Hyundai Palisade Calligraphy (the top trim), you get all those features mentioned above, as well as better leather, fancier interior trim, seating for seven, a 291-horsepower turbocharged V6 engine, a panoramic moonroof, power-folding third-row seats, side-window shades, auto-leveling suspension, fancy 20" alloy wheels, and more without paying extra.
The price for all this comes to about $48,000, not substantially more than the X1. The point is, you get WAY more for your money, and the Palisade looks and feels more luxurious than the X1. We realize car buyers won't cross-shop these two (due to size differences), but the point about the luxury the Palisade provides has been made.
The Luxury Brands Should Take Notes
The mainstream brands have also been pilfering designers from the premium brands. Kia and Hyundai have hired famous designers like Luc Donkerwolke and Peter Schreyer from the German brands, which explains the explosion of sophisticated design in car brands that were once relegated for bargain hunters. That's no longer the case, and the premium brands need to watch out, especially when design, materials, and ergonomics in cars that cost half as much as the premium models shows up on "lesser" vehicles.
If you pit a Mazda CX-9 Signature's interior against an Audi Q7's, you'll have a hard time finding any deficiencies in the Mazda. Auburn nappa leather, rich aluminum and rosewood trim, superb controls layouts for climate and infotainment, excellent seats. Load up a CX-9 that comes standard with far more than what comes with a Q7, and you'll see that the real luxury lies with the Mazda. It seems the only difference these days is the Audi's brand cache for those who care more about being seen than just experiencing luxury. Plus, you expect a high level of posh digs in a $75K vehicle, but you're astounded when you get the same thing in a car that costs $45K.
If You Think You're Judged Based on Car Brand, Maybe You Deserve It
Anyone who buys a car brand because they want to look fancy for people they don't know is an idiot. These are the kinds of people who buy name brands based on how they come across to people and rarely due to quality and value. That's disposable income, for sure. But the whole point of luxury is to enjoy it and to be comfortable with what premium features, style, and materials provide to the car buyer. The delta between the mainstream brands and the premium brands in these areas is no longer significant.
For instance, we would argue that the styling of the new Kia K5 sedan (especially in sporty GT-Line trim) looks way better than the current, and rather vanilla, Audi A4 sedan. If you load up the K5 with features such as contrast seating, wireless charging, navigation, sport suspension, an 8-speed dual-clutch transmission, etc., the car doesn't even crest $35,000. Later this year, you'll even be able to add all-wheel drive for about $2,500. But load up the A4 with similar features, and you're already about $10,000 more than the K5 and with about 30 fewer horses under the hood. That's a big difference. The K5 looks better, has more power, and more standard features. If you can get past the brand cache, the K5 is the better buy. It's luxurious and attractive without the high price tag.
The overall point here is that getting past the brand name gives you so much more for your money. Who gives a crap if your golf buddies think your Hyundai Palisade isn't as nice as their Range Rovers? Chances are, theirs will be in the repair shop most of the time. What's more they never drive it off-road anyway, which is where the brand's strengths lie. If they get a ride inside the Palisade (or the Kia Telluride, for that matter), they'll be shocked, we're sure. The premium brands are already losing customers to some mainstream vehicles because buyers realize premium resale value sucks, and they're really paying for a brand name and not real value in a premium vehicle. As for us, we want more for our money, and the mainstream brands get it.
