Luxury.
What exactly does it mean?
When you open the rear door of a $189,900 Rolls-Royce Silver Spur III, the answer is obvious: a built-in safe, ice chest, refrigerator, computer and fax machine. Or in a $269,000 Corniche IV convertible, with its locking cocktail cabinets and picnic tables that fold down from the rear seat backs.
But there are other, more subtle nuances to consider when it comes to defining luxury.
It means popping open the trunk lid, pressing a button and having the rear seatbacks fold down so you can slip a pair of skis inside and not have to carry them on a roof rack.
It means pulling into a filling station and not having to worry about looking like a dufus because you’ve forgotten what side of the car the fuel filler door is on. You simply look at the dash, note the arrow pointing to the correct side and pull up to the gas pump.
It means opening the glove box door to get the map-after having forgotten if you should have turned left at the third light or right at the second-and watching it gradually open, rather than slamming down on the knees of the passenger, who already is upset because she told you it was left at the third light.
It might mean having all the windows covered with a solar tint to keep interior temperatures moderate, or having the rocker panels finished with a pliable plastic coating that prevents stones tossed up from the roadway from chipping the metal, or having an engine that doesn’t need to be tuned for 100,000 miles.
It certainly would mean having a special micron air filter attached to the air conditioning system to reduce irritants in the passenger cabin-except for that faulty map reader-by removing particles as tiny as 3 microns in diameter (a human hair is 50 microns in diameter).
And, without question, luxury means having dual air bags, anti-lock brakes and traction control at your disposal to dramatically lower the odds of experiencing trouble and easing the consequences if it does occur.
Such luxury does exist. It’s the Ford Contour, a compact sedan that will sell for $15,000 to $19,000 when it goes on sale this fall as a replacement for the compact Ford Tempo.
And you thought we were talking about a Mercedes-Benz, BMW, Jaguar, Cadillac or Lincoln.
Actually, the features in Contour also can be found in most luxury cars priced from $30,000-or roughly twice the sticker of the Ford.
So why spend $30,000 to $80,000 or more for a “luxury” car when you can get one for $15,000 to $19,000
“Luxury is reflected in the price you pay. And when you are willing and able to pay more for a car, part of what you are willing and able to pay for is higher reliability, greater quality and better customer service than cars for the mass market,” said Susan Jacobs, president of Jacobs & Associates, a Rutherford, N.J.-based forecasting and strategic planning firm that specializes in the luxury market.
“The affluent tend to set higher standards,” Jacobs said.
In other words, when the Chevrolet buyer spots a loose screw in the dash, he or she will reach for a screwdriver and tighten it. The Cadillac owner will reach for the phone and demand that someone at the dealership come out and pick up the car and apply the tool to the miscreant screw. And while the work is being done, he’d like a loaner.
“Most luxury buyers purchase a badge with status attached to it,” Jacobs said. “They are willing to pay more for a Mercedes or BMW or Cadillac or Lincoln because the namebadge connotes the prestige and status that they are willing and able to pay for, status reflected in the car’s performance and handling and elegant, more distinctive styling.
“But because cars have become more uniform in terms of the features they offer and because that means there are fewer areas of distinction between cars, the luxury buyer wants to distinguish himself from the mass market,” he added. “The way to do that is in terms of higher-than-average quality and service standards. As a result, factories and dealers are more attuned to the needs of affluent customers because the affluent customer is more demanding and willing to pay more if they get more.”
Everyone offers anti-lock brakes and air bags and AM/FM stereo radios and power accessories-windows, door locks, mirrors and seats. But not everyone will see to it that someone comes to you and tightens a loose screw in the dash.
That doesn’t mean, however, that luxury-car buyers are going to hand over a blank check for a prestige nameplate just because a mechanic with a screwdriver is standard.
“What we have found is that there really is a limit as to what people will pay for a luxury car,” Jacobs said. “In the late ’80s and early ’90s, the European luxury nameplates lost market share to the lower-priced Japanese because (the Japanese) met luxury-car buyer expectations at a lower price. It was then that it became clear that luxury car buyers care about price and value,” Jacobs said.
“Ironically, the Europeans-Mercedes and BMW and Porsche-have been lowering their prices in the last few years and, as a result, have regained market share and turned the tables on the Japanese, who have been going up in price.”
Luxury-car buyers have adopted a different attitude, not so much about the vehicle, but what it takes to acquire it.
“It used to be that the luster of a namebadge was destroyed if it was associated with value-a price reduction or an incentive. This was seen as an admission of weakness. But there’s been a fundamental change among luxury-car buyers. Now they are looking for value,” Jacobs said.
“In the ’80s, we had the age of wretched excess. People bought an $80,000 car as a mark of success. They’d overspend for glitz to demonstrate their success. In the ’90s the key is wisdom. People want to make a smart purchase. The don’t want to demonstrate how much they can spend as they want to demonstrate how little they need to spend to achieve the same goal and obtain the same status,” Jacobs said.
“People still use the luxury car as a means of showing they have `arrived,’ but now they can express they have `arrived’ by spending in a lower price range,” Jacobs said. “They can reward themselves for `arriving’ for $40,000 or less.”
