Will A3 and CLA dillute branding? - Mercedes CLA Forum
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post #1 of 11 Old 01-24-2014, 10:49 AM Thread Starter
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Will A3 and CLA dillute branding?

interesting piece from brandchannel.com which brings up one of the most prominent issues facing these two going forward...

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Yet for Audi, there also lurks a stiff caution in its launch of the A3. And ironically, the more successful the car is in the US market, where it will take over from the hatchback-style A3, the more difficult this challenge becomes for Audi. The brand has deliberately upped the portion of its sales from higher-priced, loaded "premium" models such as the A7 and A8 sedans and Q7 SUV over the last couple of years, boosting profitability for the company and its US dealers. A hot A3 could erode that advantage.
Substitute Mercedes for Audi and it still makes sense. How will they cope with transitioning clients? consider that the new C class grew to accommodate CLA, meaning mercedes is expecting many existing C shoppers to move into CLA's. Wit the C getting bigger it also becomes a legitimate option for E-class clients, The E-class grew and was packed with many features from an S-class making that a viable option for them. What will that mean for both of them as established clients move down the rungs of the product portfolio?
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post #2 of 11 Old 01-24-2014, 11:55 AM
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You may make more profit per unit of an A8 than an A3. But in NO way are you going to make more on the A8 than the A3 when you consider the enormous difference in volume. It's better for Audi to have a bigger market than focus on high end, especially since they are now and more and more becoming just VWs with a nicer interior.

Mercedes the same thing. However Mercedes has two aces up its sleeve. The S-class and G-class. The S is still the standard bearer for luxury cars so as long as that exists it will not erode too much into the brand. The G-class is also a standard bearer for its function and its own market niche. The Mercedes brand, people need to remember, is more Toyota than Rolls. Even stateside we are finally seeing more Mercedes trucks (I even finally saw a Mercedes semi a month ago).

There's no point in sticking with high end and pushing off all the "low end" customers. Doing that leads to what happened to Aston (who had to rebadge a Toyota iQ into this monstrosity to meet fuel economy standards). Or being bought by someone else. Let's not forget that Rolls Royce (BMW), Bentley and Lamborghini (VW), Maserati and Ferrari (Fiat), Jaguar (Tata) all could not survive without folding into a more mainstream manufacturer. I'd rather they attract a "lower end" customer and survive than disappear. Heck, Audi's been a VW for half a century now.

The only exception to this is Porsche buying VW, but even then it's VW who is in charge now, not Porsche.

Think of it this way, do you think the Bugatti Veyron would have ever been built if it didn't have the finances VW had at its disposal? Better to survive and dilute a bit (or not at all) than stand proud and fade away. Or build a Cygnet.
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post #3 of 11 Old 01-24-2014, 01:45 PM
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I think that making a few entry-level models is a great way to get customers into the brand and build loyalty. If you can afford a Q3 in your late 20s, you will be more likely to stick with Audi for life. But if you were only offered Hondas, Fords, Hyundais, etc then you haven't built up any brand loyalty at that point.
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post #4 of 11 Old 01-24-2014, 01:52 PM
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No matter what the A3 is needed at this stage in the industry. They can't afford to miss out on this opportunity. Just look how much of a hit the CLA is, they're going to want to tap into this niche.
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post #5 of 11 Old 01-24-2014, 02:11 PM
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If the A3 was available when I bought the CLA then I would have given it a test drive but as I mentioned in other threads, first to market wins with me. Since I wasn't willing to wait and after 3 test drives with the CLA I was happy enough with it to buy it. First to market has its benefits and I have no regrets.

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post #6 of 11 Old 01-27-2014, 02:04 PM Thread Starter
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well being first to market and all the early adopters are paying the recoup on development costs. Especially when you read about what is coming down the pipe for CLA.

https://www.mercedesclaforum.com/foru...-features.html
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post #7 of 11 Old 01-28-2014, 06:35 PM
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Audi gave a lot more things standard with the A3 though. That is one thing that they have going for them. BMW still has no car in this segment though. Do you think they will follow suit as well?
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post #8 of 11 Old 01-29-2014, 04:56 PM
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Originally Posted by Zeus View Post
Audi gave a lot more things standard with the A3 though. That is one thing that they have going for them. BMW still has no car in this segment though. Do you think they will follow suit as well?
they have the 2 series, which you could argue set the precedent for the segment. the 2 series GC should be out within the year which would give BMW a 4 door competitor..
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post #9 of 11 Old 02-06-2014, 01:01 AM
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Originally Posted by mr.smith View Post
I think that making a few entry-level models is a great way to get customers into the brand and build loyalty. If you can afford a Q3 in your late 20s, you will be more likely to stick with Audi for life. But if you were only offered Hondas, Fords, Hyundais, etc then you haven't built up any brand loyalty at that point.
Agreed. Honestly if it wasn't for the CLA I would have never looked at the Mercedes brand. Just not my style and out of my price range. They hit all the right spots with this one. I consider it the gateway drug.
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post #10 of 11 Old 02-06-2014, 08:26 AM
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Originally Posted by StayCLAssy View Post
Agreed. Honestly if it wasn't for the CLA I would have never looked at the Mercedes brand. Just not my style and out of my price range. They hit all the right spots with this one. I consider it the gateway drug.
I couldn't agree with you more except I called it the gateway car. It got me in and now I think I'm hooked. Brilliant move by Mercedes-Benz.

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