Musings on the Past

What is a premium car? and What is its future?

Commentary on car design is very subjective but we can all agree that when someone mistakes your car for a Maserati, that’s generally a good thing. Even more so when the car in question isn’t some sporty coupe with a tongue-curling latin name on its flanks, but a middling four-door family car from Japan with a numerical designation on its boot lid.

Allow me to direct you to the Mazda 6. A car whose name sounds as sexy as fresh printing paper. But when the missus who, in all honesty, mistook it for a Maserati at first glance, I can’t help but be impressed at where she is coming from.

Despite wearily putting up with her spouse’s 24/7 car obsession, she has never seen too many Maseratis in her life. Yet, upon gazing the 6, she thought it was something exotic, maybe a little bit exquisite even. To her, “big exotic looking four-door sedan” could only mean one thing. A Maserati. It is one thing to be accused of imitation, but it is another to be mistaken for the imitated.

That praise isn’t undeserving either. Although Asian car makers have been the pundits’ favourite whipping boy when it comes to design hacks for decades, the 6 is a properly handsome looking thing. Furthermore, if the metal rolling out of Mazda’s design centre recently is anything to go by, it is far from a random fluke of the pen.

Reach for the door and it gets better as you are greeted by a beautifully executed interior. Step in and you might, dare I say, think that you have stepped into a “premium” product.

To brand snobs that sounds absurd. Mazda doesn’t belong in the “premium” segment, they are a maker of affordable cars for the average consumer, and you can’t claim otherwise no matter how hard you polish a turd. Though that raises the question. Just what exactly is “premium”?

There is no solid definition of what makes a product “premium”. Some would say it is in the tangible like looks and execution, but as demonstrated by Mazda – and not to mention Schreyer-designed Kias and Peugeot’s recent efforts – that point is rather moot.

Might it be the intangible qualities of handling and refinement then? But that argument takes a knocking from the likes of the Ford Mondeo and Volkswagen Phaeton – ordinary cars who punch well above their class and excel in those qualities.

Historics isn’t much of a determining factor either as the “premium” space is shared between some of the oldest names, Daimler-Benz, and the purely ambitious – if cynical – corporate endeavours like Lexus and Genesis.

For decades premium brands have been banking their cars on being technically superior by way of being crammed with the latest features in comfort, convenience, and safety. And there really was a time, particularly around the late-70s to early-90s, when that was demonstrably the case.

However, in recent times there has been a drastic reduction in the adoption time of top-tier safety tech from a few model cycles in the 1980s to just one. Here today, everywhere within the next five years. It is a similar story when it comes to onboard connectivity and multimedia tech. That once clear-cut advantage has all but ebbed away.

This disappearing advantage wasn’t the fault of blind hubris. As we entered into a new millennium, the car market became ever more competitive, profit margins were thinning, and governments in major markets started tightening regulations on safety and fuel efficiency.

With an ever-increasing level of scrutiny on safety and efficiency, many car makers, who are traditionally focused on engineering, had to depend more on external suppliers like Bosch, Continental, and Denso to expedite the development of electronic components. In turn, with less proprietary control on new technology, the rate of technological adoption across the broad increased, leading to a democratisation of technology that quickly evened the playing field.

“City Safety”, “PRE-SAFE”, “Front Assist”, “City Brake Control”, these are names that are marketed to highlight largely similar autonomous emergency braking systems, some of which share a surprising level of parts commonality across disparate brands. And therein lies the answer to what makes a “premium” brand tick.

Even if the metrics of a premium car doesn’t show any discernible advantage to the average buyer, the desirability lies ultimately in the brand and the “image” it conjures up.

No company epitomises this dilemma between brand and merit than Lexus, a brand that has had a long and consistent track record at being the best in customer satisfaction surveys and often times surpassing its German counterparts.

Though founded more than a century after the Benz Patent-Motorwagen, Lexus managed to build for itself a stellar reputation in quality and engineering in an amazingly short span of time, and often topped the premium brand sales charts in the United States. That being said, Lexus failed to replicate the success in image-conscious markets like Europe and even its home market of Japan.

Instead, for all its impeccable quality and customer service, customers simply don’t covet their cars as much as those from brands – some of which have a far poorer reputation in the aforementioned areas. The Lexus name, for some, simply doesn’t strike a chord, especially when you understand the origins of premium brands.

The rise of premium brands can be adequately explained when framed against the Modern Age. At the turn of the last century, there was no such thing as “premium”. You were either rich enough to buy a car, or it was the tram for you.

Even as cars started to become affordable for normal plebs, the old world brands just continued building luxury cars as they had always been. The Rolls-Royce of aristocracy and the Mercedes-Benz of bureaucrats were of the same flock, and not occupying different “market segments” with their own “customer base” as they are today.

Like many of today’s norms that we take for granted, things started to change in the 1960s, when the defining demographic from the defining country of the 20th century started to emerge, the American Middle Class. Filled with a sense of optimism that was growing as exponential as their buying power, the middle class had a desire to define their identity.

Borne from this desire came what many recognise as the “Mad Men” era of advertising, which was pivotal in shaping much of what we recognise in the marketplace today, cars included.

Although manufacturers saw an emerging demand from the middle class for cars that were a little better than your humdrum econo-boxes and sprinkled with lashings of wood and leather from opulent coachbuilt carriages, it was the advertising and marketing suits who shaped its public persona and stoked the desire of ownership amongst a hungry audience.

And lap it up they did, so much so that a new industry lexicon started to form as car manufacturers started to rush into their newly forming demographic. A lexicon we known recognise as “premium”. Not quite luxury, not quite a bare standard fare, but just right for a burgeoning demographic that defined the 20th century.

It can be argued that the premium segment entered its golden era in the decade of the 1980s as the surge in technological progress started to clearly define their products from both the mass-market and luxury names.

Cashed-up stock trading yuppies craved the progressive image of owning a well-engineered German or Italian premium car rather than a hand-built wheeled-galleon from the stuffy and staid established luxury names like Rolls-Royce or Cadillac. Riding this surge of economic optimism came the Japanese players in the form of Acura, Lexus, and Infiniti that bookended the era.

Though managing to establish a foothold in the United States, the three Japanese premium brands maintained that the proof in the pudding is in the engineering excellence of their products. After all, that was the same formula that had brought the mainstream products of their parent brands success abroad. But being the pragmatists they were, they turned a blind eye to their European competitors who were busily ingraining a self-styled image of societal status, technical progressiveness, and brand heritage into the minds of car buyers.

As impermeable as the power of branding is, its allure is ultimately tied to its existence as a status symbol. However for any status symbol to retain its influence there has to be a feeling of exclusivity through ownership, and as economists forecast a shift towards the share economy that foundation on which a “premium” brand is built upon has never looked so shaky.

It isn’t just the loss of interest amongst the younger generation, or the gradual decline in the uptake of driving licenses, that has carmakers worried, but the advent of autonomous driving technology.

Eventually, there will come a point in the near future when all cars sold would have to be fully autonomous. Tech giants like Uber and Google are already busily preparing for this future. By collaborating with car manufacturers to develop a fleet of autonomous ride-hailing cars, the idea of owning a car might become as antiquated as getting your daily news from the paperboy.

In an ironic twist, in their drive to out fancy the competition with every successive generation, premium car makers are involuntarily advancing that technological forefront by way of introducing more advanced and near-autonomous features in the “premium” segment, speeding up its adoption rate and increasing customer expectations.

At the rate carmakers and tech companies are pushing the envelope, many pundits believe that the widespread adoption of fully autonomous cars could occur in as little as a quarter of a century, which – going by industry standards of a 7-year model lifespan – is only three-and-half generations. For comparison, the Mercedes-Benz W126 S-Class, the definitive premium limousine of the 1980s heyday was four generations ago from today’s S-Class.

While car makers are making big ambitious claims in the race towards autonomous cars, there is a sense of existential crisis of what the car market of the mid-21st century would look like, or whether there would be one at all. Many futurists believe that the mainstream autonomous cars will herald the end of private car ownership, and you don’t have to take a leap of the imagination to hook onto their line of reasoning. Already the idea of car ownership is steadily falling out of favour amongst urban populations and the youth, will little indication of a reversal anytime soon.

As autonomous technology becomes widely available, mainstream brands will likely shift their focus towards supplying fleet cars for ride-hailing operators, but premium carmakers will face an uncomfortable reality. Even though premium carmakers can depend on the image of their products as status symbols, it will appeal to a far smaller audience, one that will be highly insular with limited avenues for growth as there won’t be any “entry-level” brands to serve as a stepping stone. Parallels to the history of the horse-breeding industry can’t help but be drawn here.

It isn’t all doom and gloom, however. We still have a good number of decades ahead of us before that vision of a car-less era becomes our reality. The good news is, we are living in a golden era of automotive excellence.

Right now, even the most basic of cars are loaded with creature comforts and safety that our parents’ would have only dreamt of in their youth, some of the best driver’s cars are realistically affordable hot hatches, and not to mention some of the most aesthetically pleasing ones are as accessible to the average joe as the Mazda 6.

So don’t fret about affording the badge on the bonnet, because premium brands will stay for a little while longer, but the truly enjoyable cars, won’t.

Leave a Reply

Your email address will not be published. Required fields are marked *