Five Non-Luxe Car Brands Hoping To Graduate To Luxe Status

by David Kiley (RSS feed)
Jan 31st 2011 at 8:01AM

In the early and mid 1990s, the line dividing luxury cars from non-luxury was simple: $30,000. Today, most people would say it was $40,000, but they would get an argument.

After all, when a loaded Chrysler Town and Country or Honda Odyssey minivan crests $40K, can we really use that pricing standard? A luxury minivan?

Then, there is the discussion about brands. BMW is a luxury brand. Volkswagen and Hyundai aren't. Right? Not so fast. A Volkswagen Touareg SUV starts at $44,000 and climbs North with options to above $60K for the Hybrid version. Hyundai's new Equus sedan starts at $58,000.

Here are five brands seeking credibility with luxury car buyers and the products they are reaching with:

Chrysler: As Italian automaker Fiat restructures the Chrysler brands it has acquired after the U.S. automaker went through bankruptcy in 2009, it is hoping to position Chrysler as a kind of "value luxury brand." The Chrysler 300 sedan is the linchpin in the effort. While the base model starts below $28,000, the two other trim levels, Limited and 300C, easily reach between $44K and $48K when the technology, safety and luxury option packages are checked. "The 300 is for the successful person who doesn't forget whey they came from," is the way Chrysler brand CEO Olivier Francois puts it.

The new 300 is the second generation design of the car that captured the attention of the hip-hop community when it first came out in 2004. Snoop Dog and Jay Z were among those who praised the "gangsta" design of the car. That has been toned down in the new design in part to try and reach a broader audience--let's say, more the Black Eyed Peas and Linkin Park crowd than P Diddy and Cee Lo Green.

Hyundai: The Korean automaker is charging full steam ahead into the luxury space in order to become a full-line global automaker like Mercedes-Benz, which has cars stretching from the smart cars and A Class all the way up to the S Class and Maybach lines.

The process began with the launch of the Hyundai Genesis in 2008, a car the company said was modeled after the BMW 5 Series. The Genesis sedan starts at $33,000, but stretches up beyond $43,000 with options. This year, Hyundai launched the Equus, which starts at $58,000. The Genesis earned the 2009 North American Car of the Year award from a jury of fifty journalists.

Hyundai is clearly getting the quality and performance of the cars correct. It takes time, though, for luxury buyers to take even a great product seriously, if it doesn't have the right brand cachet. That builds with top-drawer product and the right marketing. But it is tough for Hyundai to build cachet for a $60,000 car when it is also selling and marketing cars that cost below $20,000.

Buick: The General Motors brand takes a backseat to Cadillac at the U.S. automaker, but it is showing aspirations of the front seat. The Enclave full-size crossover, which has been the brand's most solid performer the last three years, starts at $37,000 and can get as high as $47,000+. In China, buyers are plunking down $70,000 cash for the Enclaves.

The LaCrosse sedan, broadly praised for its Lexus-like quiet and styling, starts at $27,000 and can crest $37,000 with options and destination charges. The brand's ad slogan gives away its aspirations: "The New Class of World Class."

Jeep: Because of its four-wheel drive, Jeep has long been one of those brands that has always had legitimacy in the same garage as a Mercedes-Benz or BMW. Besides, if one has the money to have a chalet or ranch in Jackson Hole, Wyoming, one doesn't want to try and traverse the mud and snow in a BMW. Abd for those with taste, Hummers were just too obnoxious looking.

The new Jeep Grand Cherokee was developed alongside the Mercedes M Class when Daimler owned Chrysler, Dodge and Jeep. To satisfy the true luxe crowd that likes Jeep, the company has launched the Overland edition, which costs about $44,000, and includes all the electronics and leather a Jeep buyer might want. The company is examining special editions that would even go higher in price to around $50,000.

Volkswagen: The German automaker tarted out in life as "The People's Car," which is the literal translation of "Volkswagen." The original Beetle was intended to bring car ownership to the German masses during the 1930s. That idea was delayed until after the war, but was fulfilled across Europe, the U.S. and Latin America.

VW in 2003 launched the Phaeton sedan, which cost $65,000 to more than $100,000, but had a short life in the U.S. as very few people could match the VW brand with such a high price tag. The Touareg SUV, with prices that start at $44,000 and reach above $60,000 has been more of a mainstay, but has not been a big seller in the U.S.

Volkswagen has lowered the price of the 2011 Jetta sedan to generate more sales volume. It is doing the same to the 2012 Passat when it comes out later this year. But it is also planning to increase the number of offerings over the next few years that reach above $40,000.

Gallery: Five Brands Reaching For Luxe