Entry-level luxury is here and it's supposed to be affordable.
Affordable luxury is something that didn’t exist five years ago. It’s really something new and it’s been a massive hit for luxury carmakers. Many buyers, mainly up and coming Millennials, are, for the first time, walking into luxury brand dealers with the intent to buy. But are the luxury cars they’re buying still luxury cars when they’re considered “entry-level” at around $30k? For simplicity’s sake, let’s use two examples here: the Mercedes-Benz CLA and the Ford Fusion. A 2015 Mercedes CLA starts at $31,500. Obviously that’s the bare-bones, hard-to-find base model.
Add a few option packages and you’re nearly at $40k. Still, it’s a Benz and when compared to a fully-loaded Ford Fusion, it’s the choice many are opting for. Yes, a Fusion can be optioned up to a price tag of $36,630. A difference of a couple grand won’t deter many buyers. So why would anyone shopping in this price range want a Ford instead of a Mercedes? Another question is whether a cheaper Mercedes could actually dilute the brand’s luxury prestige. So is a fully-equipped Fusion on par with a lower end CLA? Is that CLA still even considered true luxury, or are both in a newfound grey zone segment between standard mid-size and luxury sedans? Market trends will eventually answer those questions.