One thing’s for sure: they don’t BUY them. Exhibit A3. Sales of Audi’s premium compact are cold, cold, cold. In August, the German car company moved just 479 copies, bringing its eight-month year-to-date total to a paltry 2,295 units. Exhibit BMW. The 1-Series is a flop; just 914 examples moved off dealer lots in August, bringing their YTD total to 7,443.On the hand, MINI. In August, BMW’s British brand flogged 5,111 Coopers stateside, bringing their eight-month YTD total to 30,868 moved MINIs. Questions for the class: is that as good as it gets? Is the so-called small premium market saturated? And if you’re a dead car company walking trying to resurrect a dead brand walking, is it worth developing a new car for this niche market? GM’s film would have you believe that the “small premium” market is ascendant. If gas prices go through the roof . . . nah. As Ford said in one of its UK ads, “space is the ultimate luxury.” You don’t think Europeans buy small premium cars because they want to, do you?
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I’m not sure if I would classify all of those cars as small. The A3 and Mini definitely fit into the compact class, but the ES is a solid midsizer, and the TSX and C-Class both lean more towards midsize than small.
The biggest problem with the A3 is that for your extra money you don’t really get a whole lot more than you do with a GTI, that, and also that Audi doesn’t seem to ever advertise or push the A3.
30,000 models a year is hardly chump change, and if GM can make a quality product in that class they shouldn’t ignore it. However, badging it as a Buick makes no sense, and a Cadillac not a whole lot more, but with the loss of Saab, which was really the only GM brand that spoke small, sporty, and premium all at once, I guess they don’t have much choice.
I think you need to define the segment a little tighter. The MINI and Lexus ES do not compete against each other. The C-Class isn’t considered small (regardless of EPA class) and competes with the A4 and 328, which you don’t mention, and which sell quite well. On the flip side, VW has no problem selling versions of the Golf near $30k.
Credit to the MINI marketing campaign, but they also offer a $19k version of the car, which is far from “premium.” The convertible is expensive, but not much more than a loaded Miata, which nobody considers premium.
The A3 is a certified dud, as is the 1 series, and the Volvo C30. You’d do better to focus your criticism on these.
NulloMondo/RetardedSparks
Excellent points. All incorporated into the revised post.
I took the little woman’s A6 in for service last month. The dealer gave me an A3 for the day. I absolutely loved it — I’d forgotten how much fun a small car can be. We Yanks don’t know what we’re missing, if you ask me….
“The A3 is a certified dud, as is the 1 series, and the Volvo C30.”
A complete lack of marketing could be partly to blame.
I think the other reason for this segment not doing too well is the competition from “lesser” brands that offer the same doo-dads. As with a loaded Golf, a loaded out Mazda3 Grand Touring wagon/hatch is similiarly sized and has similiar creature comforts, similiar power, etc… as an A3 or 1-series (which holds the RWD card). And it’s $5k to $10k less. The Mazda3 has garnered a wide market, not just Gen-Xers. Finally, the small CUV market has taken over this segment, size and price-wise, and it’s more “cool/hip” to have a high-riding wagon than a low-riding wagon.
Also, I would not hesitate to say that some newer iconic cars, such as the Prius, have taken a bite out of this segment. I know it doesn’t compete directly at all, but it’s something that stands out and that is what people want in the entry-level luxury segment. Hence why Lexus has a compact hybrid now.
I’ve never been a fan of VAG-products, but I do wander what kind of deal could be worked on a stripped-down A3 quattro. Nah, probably not worth it.
These cars sell quite well in Canada, as far as I can tell. For example, the A3 makes up about 25% of Audi’s Canadian sales. I see plenty of 1-series and quite a few C30s here in Vancouver.
The problem with the A3 is not it’s market segment, but its parent company. VW sold fewer cars than Subaru this year.
The only real “premium” small cars I can think of is Mini Cooper. It’s doing quite well. RSX was one, but discontinued. 128/135 isn’t bad IMO, just that it’s not differentiated enough from the 3 series. Maybe BMW should make the 3 series roomier and make the 1 series smaller.
I absolutely love my A3 and don’t understand why Americans are so quick to dismiss it. Fortunately it still sells reasonably well in Europe.
The A3 problem (and 1-Series problem) basically goes like this:
1) They’re not much cheaper than the next step up. The A3 starts at $27.2k MSRP, the A4 at $31.4k. The 128i starts at $29k MSRP, the 328i at $33.6k. A $4k difference is smaller in raw numbers than the $5.5k difference between the Civic and Accord, and far smaller when viewed in percentage terms.
2) They don’t have luxury features available on the next step up, or you pay extra for them. The A3 has no option for a power passenger set; the power driver’s seat is only on the step-up trim. The A3 can’t have a three-zone climate control.
3) By the time you configure them to have the same equipment as the next step up, it overlaps in price.
4) For all this, they’re smaller, but not enough so to really get better mileage than the bigger brother, but the performance isn’t really better either.
For Audi, the A3 might be most useful as a low price to get people in the dealership, price out an A3, and then decide, “Well, if I’m going to spend that much, may as well get an A4 for basically the same price and have the extra room.”
In the US these cars are seen as compromises because you don’t have the money to stretch to get the bigger one, not something you choose because you like a smaller car. Especially since you can’t really get the same level of luxury on them.
The TTAC review for the 135i echoed the sentiments– if the 1-Series offered a real cost savings over the 3-Series it would be worth it, but if you’re already spending $35k on a car, why not step up to the 335i for $4.5k more?
It’s a case of the cultural differences in the various regions of the US. The A3 is everywhere in the SF Bay Area. I find it hard to believe Audi couldn’t move these in quadruple digits for the whole US. At this rate, the Euro Focus will be a complete failure compared the current Pig Focus. Mullaly will be fired, and we’ll never get good cars again. Don’t put all of the blame on the US automakers.
Isn’t the STi a premium car @ $35-40’ish? Doesn’t it sell fairly well? It’s a subcompact still, right?
I do, but then again I live in the city of San Francisco and work in a dot-com. Not the typical demographic of America, but one more likely to “get” what Europeans get. I am intent on buying a BMW 135i as soon as my current ’93 5-series is driven into the ground. The 3-series is nice, but 10 inches shorter is actually a positive thing where I live (more parking available).
In the old economy I would have pulled the trigger on it already, but now I am waiting longer than I would have. I guess that is the perfect example of some “pent-up” demand. Oh, and I will most likely be doing the European delivery. ;)
“You dont think Europeans buy small premium cars because they want to, do you?”
You’re quite right – they don’t but even though their affluent may be strapped for space, an upmarket compact is still a nicer way to get to work than a Daewoo and, if it the right badge on it, will still reflect the owners aspirations for socioeconomic upward mobility.
If the small premium segment catches on in the US will depend largely on the same space restrictions that are driving the European market. This is already a factor in some major capital cities and will continue to grow in the decades to come, however, it will not reach European proportions in the foreseeable future. The US has too many suburban population centers that do not restrict owners to small vehicles.
There may be the occasional blip in sales like the SMART but these are largely driven by fashion and short term trends. The Mini makes a better case for itself as it starts from $20K (which is not really premium) and is also supported by a continuing aggressive marketing campaign with good focus on the target demographic: youth. Brands like Mercedes and Lexus simply don’t have the cool factor to play in this market and BMW is way too afraid to bring their hip affordable hatchbacks to the US in case it may erode the brands upmarket image.
I really like the A3, but I can’t justify paying (well) over $30k (Canadian) for a car. That’s just me.
I bought a Mazda 3 instead. I think the reason this car has sold so well** is that is has hit the sweet spot between typical econo-car and premium compact. It doesn’t feel cheap, and has some nice goodies, but you can definitely tell it isn’t a premium car at premium price. (Mouse fur headliner, thin carpet, etc.)
** In the Vancouver area it is rare not to see a 3 (or several) while waiting at any major intersection. They are everywhere.
Do Americans “Get” Small Premium Cars?
Not really, no. They look at them, basically, as economy cars. If you consider the American automakers to have their finger on the pulse of the market (which they did, until gas prices went crazy), they didn’t make any. Seriously, they never did, because they thought there was minimal demand. There are no American small cars made by American automakers. GM USA got theirs from Daewoo, Opel. Ford borrowed them from their European divisions. Chrysler’s smallest is the Caliber, which isn’t that small.
If they don’t know how to make an American Small Car to begin with, how can they possibly make a premium version of one? While I think it’s great that the Buick team is contemplating the idea of a premuim small car, they need to learn how to make a small car first. Only then can they add the premium-ness.
I think they need to learn how to walk before they can run. Develop a true, genuine, *good* small American car first.
Americans will buy a well designed premium small car like the MINI as long as the price stays south of $30k. If you have the means to drop more than that on a car, you’re not going to buy small.
The differentiation is between “get” and “want” and “need.”
I think we all get it.
If gas was >$4/gal, everyone would want a small car, as clearly evidenced by last year’s spike in both gas and small cars. In Europe, tighter streets, congestion and parking warrant the need for a small car.
If and only if these limitations are true, those (in the mass market sense) who also want premium touches might be more inclined to pay for them in a smaller package.
Instead, as today, they can afford to have their space too, which we also associate with “premium” not to mention the false-ish sense of safety of a larger vehicle.
Unless small vehicles are in demand as a result of some external factor, premium small will only be a niche.
If you’re going to buy a compact car, you probably expect better than 24mpg. This is why the MINI sells so much better than the A3 or 1-series.
Yes, Americans “get” small cars. I see quite a few Toyota Yaris, Honda Fits, Minis, Smart, etc. around Denver. Those who “get” small cars will most likely be in the market at those price points, not at A3 or 1 Series costs. As other posters have mentioned the A3/1 Series are competing against the A4/ 3 Series, not Toyotas, Nissian or Honda. Personally, I do not see a US market for down-sided BMW or Audis.
Twotone
I think it’s a difference in cultural mindset. This is generalising on the extreme, but Americans prefer to put their premiums in a larger car with nothing extra, Europeans rather put their premiums in a small car with everything included. The Toyota Camry is a perfect example. I don’t have the numbers, but I’d bet my money that the Camry sells in more numbers than the Corolla stateside. In Europe, it’s the other way around.
johnthacker wrote:
In the US these cars are seen as compromises because you don’t have the money to stretch to get the bigger one, not something you choose because you like a smaller car.
Funny, I bought mine specifically because of its size. I like small cars and don’t need to cart around many 6-footers in my back seat. I looked at an A4 (which admittedly wasn’t much more money) but I live in a very congested city where space (both on and off road–i.e.parking) is scarce.
The A3 has 95% of the luxury features of the A4 and a very similar drivetrain, but is much better at darting in and out of traffic and much easier to park. Its hatchback is more useful to me than a trunk. EPA ratings notwithstanding, I suspect that in the real world the A3’s fuel economy is better as well.
The base Mini is small but averages 30mpg+. So you get a small car with great fuel economy and great looks.
Demerits against the 1-er and A3:
– no cost savings versus 3-er and A4
– no fuel economy advantage
– cheaper interiors verus 3-er and A4
To me, the point of getting a small car is to get fuel economy. Otherwise why cram myself into a shoebox when a bigger car accomplishes the same thing?
I think everyone here has completely missed the point. SMALL – in relation to BUICK. Think SKYLARK and SKYHAWK. The smallest car Buick has made since the Skylark is the Century, much larger than the BMW 3-series, MB C-class, Audi A-3 and A-4, etc. The latest LaCrosse is bigger than the ES350… SMALL, compared to what Buick has made in the last 10 years.
What I took from the video is Buick, again, is going to try to create the Buick-of-small-cars. HOPEFULLY they will do a better job than the 1974 Buick Apollo my mother had (and I learned to drive on); it was simply a Chevy Nova with chrome and about 500 extra pounds of weight, quite sluggish and listed to one side or the other on turns (they mushied up the suspension to make it a Buick).
They hope (again, what I took from the video) is to take the Chevy Cruize, make it the Buick Excelle, and hopefully do it well enough to justify the cost. Mazel tov, but here’s hoping.
However, at no time did I get from the video, Buick has no intentions of competing with the A3, 1-Series, or the Mini.
If you are asking if buyers will invert the normal price-size equation, the answer is probably no.
As previously said, if “premium” means low to mid $20’s (MINI, GTI, etc) then you’ll have a market. It’s impossible to get an A3 or 128 for under $30, and at that price point there is just way too much competition from larger vehicles.
Also, as others have said, you are not getting better mileage with these vehicles, either, so unless small size is your absolute #1 requirement, there is really no reason other than personal preference that you’d choose one over the other options. And we’ve seen that about 1400 Americans a month fit that category.
Yes compare sales of the Civic versus the Cobalt and the Fit versus the Aveo. people will pay a premimium for a well developed well engineered small car. The amenities that you can get now were simply unavailable just a few years ago. Remember when you couldn’t get leather in a Civic? Now you can get a loaded small car with all the goodies.
As for the A3 and the 1 series, maybe the sales people at BMW and Audi are treating people coming in and asking about them in the same manner as domestic dealers use to treat people coming in and asking to look at a Chevette or a Pinto. They were treated like second class citizens for not wanting to buy the larger more profitable models.
One of the issues against the American small premium car is the number of cars most American families own.
In a two or more car family the “Premium” car is larger. Small cars still have the second car/commuter car image with all but the very young who can’t afford more than a low priced car and own only one car.
So you end up with those that buy small on first cost only, and those that want the most economical commuter car they can get. By not offering a 4 cyl 1 Series here in the US I really think BMW blew it. Look at all the money spent on hybrids in general that never had a chance of paying back. People (some Americans) will pay a huge amount of money to save a few dollars at the pump. I believe most Prius’ actually were pretty heavily optioned out, so cost wasn’t that big a deal it appears. For these people there would actually be an advantage to buying a 4 cyl 1 Series over a 6 cyl 3 as they would be significantly more economical to run. Premium small without the operating economy of small made no sense at all. Who wouldn’t buy the 3? Maybe BMW was afraid that a 4 cyl 1 would hurt MINI sales. After all MINI dealers are always adjacent to a BMW showroom.
For now the MINI is unique. Nostalgia (it was an early retro look success), very economical to operate, affordable (compared to a real Premium car) and great fun to drive, are all in it’s favor and not duplicated by any of the obvious competition. While BMW’s recent ads seem to prove they believe only drug addict hookers buy MINI’s, I believe they have many demographics each producing a few thousand sales. Taken together they add up to 30k. As I said, unique. Somehow I can’t see a Buick ever having that wide and unique an appeal.
I think johnthacker and twotone nailed it. These cars are too expensive for the market segments they occupy.
The way I see it, the premium compact segment is caught between a rock and a hard place.
On one side, you have the rise of fun-to-drive, well-appointed, good-looking mainstream compacts. The Mazda3 is a prime example. So is the Fit. The Golf/GTI could be another, but I think, like the Mini, the VW straddles the line.
On the other side, you have the traditional “compacts”, as meaningless as that term is. The A4, the 3-Series, the S40.
The A3 is a great example of what’s going on. Same platform, same engine, transmission, what-have-you as the GTI, but since it’s an Audi, they have to sell it for more. But then they start getting to the point where, if you want an Audi, you may as well buy an A4 for the price, and if you want what’s underneath but don’t care about the brand, the GTI presents a much better value.
It probably doesn’t help that the A3 is so indistinguishable. Maybe embracing a more aggressive hatchback design and leaving the full wagon to the A4 Avant would be a wise move going forward.
The 1-Series has to straddle a similar line between the Mini and the 3-Series, but, as if that wasn’t enough, BMW went and hobbled its full market potential. No sedan, no 3- or 5-door. So forget anybody with kids. Then they stuck to the absurd “nothing less than a six for the U.S.” mantra, jacking up the price to “why not a 3-Series” heights.
The vehicles have to stand out and be desirable in their own right. So far, I don’t think the A3 or 1-Series have quite pulled that off.
Americans not only do get but also have BEEN Getting “Small Premium Cars” for more than a decade now.
The MINI is an excellent example. Some may even call the 3 series best-selling BMW a “small premium car”. It sure was one back in the 80s, when the 3 series was really tiny and very lightweight!
And, apparently, Buick is on point. Audi is planning to bring the A1 to the US (from Autoblog):
Luxury marques are betting big on small cars all around the world, and some are even testing the waters here in the good ‘ol U.S. of A. Despite the fact that most every small car intended for premium customers in the States has failed dismally in the past, there’s reason to believe that tide may be shifting, and automakers have taken notice.
Add Audi into the mix of European car companies interested in dipping a toe in the small car waters. According to a report from Bloomberg, following the undeniable success of rival BMW’s Mini brand, Audi may very well engineer its next-gen A1 with U.S. distribution in mind. We’ve been hearing this rumor for a while now, and it’s once again sourced from Audi’s head of sales Peter Schwarzenbauer.
@GMis4GoodManners
The first thing that came to mind was the 1961-1963 Buick Skylark. The right car at the wrong time. Gas was 30 cents a gallon and we were in a recession. My uncle and grandmother both had them and they were truly premium small (for the time) cars with way ahead of the time all aluminum engines.
I looked at the A3 and the salesman (VW/Audi dealer)steered me toward the GTI, due to the fact that it is basically the same car for thousands less.
That 1961 Skylark did share the aluminum V-8 with the also premium brand Olds F-85, but not with the cheaper Chevy II and Pontiac Tempest, that got cast iron fours, along with cheaper interiors.
There is a real opportunity to bring new buyers into your brand with an accessibly priced entry level model. Unfortunately none of the luxo automakers are doing that right now.
Building out a BMW 128i you start at around $30K and at that price it doesn’t even include real leather, power seats, an automatic transmission, bluetooth, satellite radio, a USB port, or metallic paint. All of those items should be absolutely standard on any luxury automobile (well, maybe not the automatic).
If the A3 or 1 series started about $5K less Audi and BMW could get buyers shopping for Accords, Camrys and Fusions to consider downsizing to a premium car for just a little bit more.
Americans may not get these small premium cars yet, but where do you think the trend is going? Are gas prices going to go up (think climate change legislation)? Is the current migration of the affluent from suburbs to city centers going to continue or even accelerate? If you think the answer is yes to both of these questions then small premium cars are a good bet. I think GM is actually showing some far-sightedness here for once.
Also, with Buick you always have to take the Chinese market into account. The Chinese love Buicks. A smaller Buick could do very well in China.
This is not complicated.
In the US, except for a few very crowded cities, space in not a deciding factor.
That leaves fuel economy, price, and marketing as the remaining factors.
It is not price. These cars aren’t much cheaper than their mid size siblings. And as pointed out, once you get the nice options, you might as well buy the mid size model, sometimes for less.
It isn’t fuel economy. Yes, they save a little fuel. But if fuel savings is your objective, then there is Prius.
That only leaves marketing. The Mini is master of this. The others, not so. And marketing will only get you so far.
So there you go.
Pricing is the main problem.
Brands reaching downward to extend reach seem to always get burned. The 318 was a penalty box – too small, too underpowered, too/two few cylinders for the price they were asking.
Seems like the 1 series, in addition to having a shocked look on its ugly mug, is heading down the same path. It’s an ugly car that is too small for what the price point is.
Same with the A3, but for different reasons. Great looking car that handles well, but again, it’s too small for the price they’re asking.
Another example: MB C230 hatch. Ugh.
As has already been said, why buy an A3/1-series, when an A4/3-series isn’t really that much more and you will get a lot more for what you spend.
These Euro brands need to think differently about their entry level offerings. What if the A3 could be had for $24k instead of $27.2k? Problem is, they don’t see great cars like the Mazda3 as a competitor.
People are more price sensitive now, something that Euro brands seem to not get.
In most the US there’s simply a whole lot less to “get” about a small car than in most of the rest of the world. Lower gas prices alone penalizes a bit of extra space a lot less. As does wider roads and bigger parking spaces. And bigger houses allowing more people to have hobbies “requiring” more bigger stuff. And bigger / fatter people less likely to be comfortable climbing into the back seat of an A3 on the way to a restaurant located where you can’t easily get to it with public transportation, in a country less crazy anal about having a glass of beer and still driving home.
The pockets of the US that more closely resembles the denser living of other countries, seems to be the pockets where these cars do comparatively well. Like San Francisco, as some poster above mentioned. But they’re not large enough to have a huge impact on national sales numbers.
The pockets of the US that more closely resembles the denser living of other countries, seems to be the pockets where these cars do comparatively well.
Where I live in boston it feels like almost 1/3 of the cars are mini’s, A3s, and GTIs. A lot of it has to do with parking. Since moving from a Passat to a GTI it’s sooooo much easier to park and the bumpers don’t get all scraped up either.
That being said – I work with people who live in the suburbs, who don’t even know how to paralle park as that need never comes up in their day to day life.
PS I tried to watch this video, but what is wrong with all these people that star in videos and GM ads ( a recent Saturn ad is the worst offender) where the person talking barely, if ever, looks at YOU the LISTENER, ie, seldom looks directly into the camera, and instead most of the stupid video he seems to be looking at the wrong direction, obviously parroting from some text they wrote for him…
Very disturbing habit.
“But if fuel savings is your objective, then there is Prius.”
I have a far greater respect for even the Gen II Prius after I drove it (rental) for 3 days, 2 in April and 1 in June 20009 in Los Angeles.
But the above misses the point. If you want to save $, very few, if any, people would buy the PRius, since the TOTAL life-cycle cost is far higher than the same cost for even another toyota (Corolla, Yaris, and even the basic 4-cyl Camry), since there is no way one will ever recover the steep price premium of the Prius over the Yaris and Corolla and even the Camry.
No, people buy the Prius for other reasons, NOT to save $. I would even recommend it for people living in places like LA and using the car intensively and to commute long distances on the usually faster left carpool lane, where the Prius is allowed even with no passengers.
I went to my local Audi dealership to test drive an A3, went to the information desk and stood on the lot next to a car, but no salesman ever came to sell me one. In contrast, the local Volkswagen dealer was helpful when I looked at the similar but much less expensive Jetta. For the US, Volkswagen should probably eliminate the A3 and offer leather instead of plastic seating surfaces in the Jetta. Black plastic seats are totally unacceptable here in Texas and the A3 proportions look cheaper than it’s price.
@ johnthacker and Robstar,
I shopped the A3 (S Package) and the STi against each other. I really liked the luxe and “floppy paddles” of the A3 and the performance and known quantity (to me) of the STi.
But at $40 large plus, the A3 didn’t have the performance and the STi didn’t even have heated mirrors – a must here in New England.
I split the difference and settled on a Legacy GT with the original Spec. B package. Luxe – more than the A3. Performance – better than the A3, less than the STi. Rare – they made 500. And I had change left over from the $40 large.
$40 large for a car that isn’t a niche supercar as is the STi or Evo is too much. The A3 w/S Package is too little luxe and too little performance…for the bucks.
I think Americans could get small cars, but we aren’t really given those choices. We get large engines and minimal choice in how they are packaged.
The Audi A3 is a perfect example, the only reason we are looking at it is because my wife doesn’t want the dark interior of the GTI. That isn’t worth the difference in price, not even close.
The BMW 1 series comes in two useless packages, a small coupe and convertible, instead of the much more practical 5 door hatch, which we would buy instantly if available. It also comes with the wrong engine with the 135 being ridiculous in such a small car. If we got the smaller Euro engines with a corresponding price reduction and better mileage, people would buy them. Of course, that would threaten Mini, so we get the current models. No thanks, I’ll take a 3 series.
People can complain about the pricing, but a BMW 3 series is woefully underequipped and has a much crappier interior compared to the equivalent IS350, and I would still get the 3 in a second.
I would love an Alfa 147 as well, but I am sure they would make the seats wider to fit big American asses, the engine bigger making the car nose-heavy, and probably screw up the suspension.
There is a reason the old Mazda 3 sold well – it was the only way to get close to a Euro Ford Focus.
The “mercedes” “Smart” (aka the”DUMB”) can also qualify for a small premium car. It sure is the smallest around, and even though it is a worthless piece of plastic, those who buy it pay a huge premium over what a similar car should sell for.
I suppose I “get” small premium cars as I own both a Mini and an A3. I’m one of those folks that contributes to jmo’s obvsevation about 1/3 of Boston metro area cars being A3s, Minis and GTIs. (another 1/3 would be comprised of Volvos and Subarus).
I’m going to echo a lot of the sentiments here about the reason these cars (the A3 and 1 series) don’t sell well:
1. Marketing. Have you seen an add for an A3 or a 1 Series? I haven’t.
2. Price: As others have pointed out, these cars are expensive and many perceive that they’re not worth the money. Perhaps if the US dollar wasn’t in the toilet, these cars could be more reasonably priced, but alas we must live with the exchange rate we have.
I bought chose the A3 because I liked the way it looked and loved the way it drove. To me, it was still significantly cheaper than an A4 (and drove better too). At the time, the 4 door GTI didn’t exist, and even if it had, I’d probably chosen the A3 on looks alone, not to mention the better dealer experience.
Premium small cars CAN succeed in the US if done correctly…They have to be unique, offer style and design that make them desirable, and represent a brand that has resonance in the marketplace…Badge engineering, cheap interiors, and charging a multi-thousand dollar premium just for the nameplate alone ain’t gonna work.
As has been said before, the Audi A3 is a Golf with a premium price tag, and the BMW 1 series is overweight and overpriced, bringing it far too close to the 3 series.
If the A3 offered a killer interior and/or upped the design quotient, that would help…as would offering higher engine output that you can get in a GTI. The 1 series needs to be hundreds of pounds lighter, and offer high-tech 4 cylinder power, making it a truer spiritual successor to the 2002…that would sell in decent numbers.
since there is no way one will ever recover the steep price premium of the Prius over … even the Camry.
MSRP Camry = 19,395
MSRP Prius = 20,900 (with much more quipment)
If given a choice I’d much rather pay the extra $495 and get the Prius.
Georgetown, the crowded and pricey part of Washington, DC, is full of MINI Coopers. There are several in every block. When space matters, but budget is not all that important (Georgetown is an expensive place to live), people definitely get small premium cars.
We have a MINI Cooper S, and I think MINI got it right. Interior space is really important, and a MINI will handle front-seat passengers up to 2 meters tall (about 6’7″), something many large cars cannot do. I’m 6’2″ and a car that is made premium by adding options and refining finishes is not enough–I have to fit also. The most important part of “premium” is premium design.
mo :
September 16th, 2009 at 2:48 pm
since there is no way one will ever recover the steep price premium of the Prius over … even the Camry.
MSRP Camry = 19,395
MSRP Prius = 20,900 (with much more quipment)
If given a choice I’d much rather pay the extra $495 and get the Prius.
NOT REALLY!!!!!
Prius dealers charge $5,000 OVER MSRP for the very popular Prius III, of which there are only 3 DAYS of inventory (!!!).
And what is the standard eq. that this cheapo camry has that the Prius does not?
On the contrary, the PRius has a TON of systems that the Camry does not have and porobably does not need.
But if you want to forget the Camry, be my guest. Just compare to the YARIS and the COROLLA, which I ALSO mentioned.
“MSRP Camry = 19,395
MSRP Prius = 20,900 (with much more quipment)
If given a choice I’d much rather pay the extra $495 and get the Prius”
PS you need some practice with your 1st grade arithmetic. the extra $495 is FALSE, it is an extra $1,505!!!
@ sfdennis1 :
“If the A3 offered a killer interior and/or upped the design quotient”
Seems to me the A3 interior is killer as it’s sold now.
How different the Canadian market is from the US.
I would argue you’d see more A3s up here than lawn weeds if they were to sell a model with reduced content, e.g., fabric seating, no sunroof or power seats, and bring the price down under $30K.
Same goes for the stripped down BMW 4 banger 1-series hatch which BMW Canada refuses to admit exists.
For all the lip service BMW or VW says about treating the Canadian market as a separate entity from the US market, we still get the same stuff, and from what I read from the B&B, most of it is an epic fail on your end. Bodes ill.
Sidenote:
I just read today that VW’s Detlef Wittig said VW is working on a notchback version of the (2012) Polo for Canada and the U.S. I assure you that no one up here put in a request for a sedan version of that car.
Many people offer examples of cars that equate high price with premium. For example, the Prius or the Mini. They cost a lot, but they aren’t luxurious.
However, my wife’s 1991 CL300 (a two door coupe with no B pillar), is relatively small and luxurious. It also cost $64,000. My 1972 S-Class is also relatively small when compared to other luxury brands of the time (Lincoln, Cadillac, etc.) It cost over $12,000 in 1972. Even with a 108 inch wheelbase, it was one of the most desirable cars of its time.
This proves that size and premium are not necessarily considered equivalent.
Anyone have the sales numbers of the Mercedes B-series in Canada? I suspect MB was right to be terrified of introducing that model to the US.
OK, the BMW 1 series, Volvo C30 and Audi A3 are flops…granted. But before we condemn this niche to the trash can, let’s consider what would happen if someone introduced a small premium car that isn’t revoltingly overpriced.
Worth noting that the Mini is the only premium small car that sells, and instead of selling for upwards of $30,000, most sell in the low twenties.
And who says a “premium small car” has to be a premium brand? I don’t think Chevy could pull it off, but Ford could…and so could Fiat/Chrysler.
Loaded Maxda 3’s sell extremely well at the mid $20’s price point.
PS you need some practice with your 1st grade arithmetic. the extra $495 is FALSE, it is an extra $1,505!!!
Woops you were right.
But, Just compare to the YARIS and the COROLLA, which I ALSO mentioned.
They are much, much smaller cars than the Prius.
I don’t think Chevy could pull it off, but Ford could…and so could Fiat/Chrysler.
Fiat could I’m sure the Alfa Mito would sell like hot cakes. As for Ford – I don’t think so. People see a small Ford and they think Pinto.
jmo – If the next Focus moves more upmarket with it’s euro platform (and it will have room to do so, with the Fiesta coming in to cover the lower price brackets) Ford will indeed have an upmarket compact, but more mainstream upmarket, like the VW Golf, thank true lux. Similarly if Chrysler gets a version of the Fiat 500, it will be an upmarket mainstream car, not really a luxury car.
Also, a Prius isn’t really that much bigger (if any bigger) than a Corolla. Yes it might have a some more interior volume due to the hatchback layout, but park the two side by side and they take up about the same amount of space.
One thing’s for sure: they don’t BUY them. … Exhibit BMW. The 1-Series is a flop; just 914 examples moved off dealer lots in August …
That may not make the best case for your argument against the 1-series. By that criteria the 6-series, 7-series, X3, X6 and Z4 are also a flop since they sold even fewer of those in August.
jmo: Fiat could I’m sure the Alfa Mito would sell like hot cakes.
Italian cars, aside from Ferraris, do not have a good reputation in the U.S. So a small premium Italian car will be a tough sell, unless Fiat is ready to settle for relatively limited volumes.
jmo: As for Ford – I don’t think so. People see a small Ford and they think Pinto.
A premium small Ford would be a tough sell, but not for that reason. The days are long gone when people respond with “Pinto” to “name a small Ford.”
Any premium small Ford will be sharing showroom space with larger cars selling for roughly the same money. In New York City or San Francisco that wouldn’t be a problem, but Ford’s real strength lies in rural and suburban America, and in those areas the space and cost limitations that make owning a small car attractive are not present.
All this talk about “premium small cars”; did everyone forget the Cobalt and Astra ?
Well GM told us they were premium small cars….
BMW projected 10k sales/yr of the 1-series in the states. 12k+ last yr. On track for 11k this year. Hard to call that a flop given this economy and a 40k car. LOL
I’ll be interested to see what a loaded Fiesta costs. A premium version of a non-premium small car might be just the thing. As observed above, it works for the Mazda3.
So the Prius and soon-to-be-selling HS250 come out … do you count those as premium small cars? Because they’re going to be selling like hotcakes.
Americans buying German do so because they really want Teutonic characteristics. BMW/Merc are really out of the US small car market, while the new A4 is larger than hitherto. This leaves A3, Golf (GTI) and Jedi (GLI). Now, an A3 is a nice car, but suffers in the looks comparo versus its larger siblings. A GLI with sunroof and automatic is only about 2 less than a Passat, and a Passat is going to win hands down for most Americans. Indeed, VW tells us that the current Passat is too small and too hard for American tastes, and will build something larger, softer, with more cup holders as an American replacement. Finally, a GTI comes across as a a bit too “boy racer,” and boy racers can’t really afford a high end Golf.
In Canada, Mercedes apparently sold 3,200 B-class vehicles in 2008, compared to 7,600 C-class vehicles. In total MB Canada had just over 20,000 total sales for the year.
“You don´t think Europeans buy small premium cars because they want to, do you?”
Yes we do.
At least some of us.
Why should i want to own an big size car???
I have no use for it.
It´s clumsy, and just to find a parking space would be a pain in the ass.
If i was a millionare, i still wouldn´t buy a land yacht.
Nothing bigger than a BMW M3.
Ummm, mpresley, I think you mean the VW Jetta, since the VW Jedi is not yet available – or are you trying to pull a Jedi mind trick on me? Blast your black Sith heart!
I don’t know about the US, but in Canada VW sells about four times as many Jettas as they do Passats. Throw in the Rabbits, City Golfs and City Jettas and the lil’ VWs trounce the big ones by a huge margin. Of the Jettas sold, a third are wagons and nearly two thirds of those wagons are diesels.
“You don´t think Europeans buy small premium cars because they want to, do you?”
I buy small premium cars because I want to.
The Porsche 911 is very small and very premium. You can say it’s a different segment, but the principle is the same; every 911 buyer is preferring to spend more and get less than Chevrolet offers in the Corvette and BMW offers in the M3.
Likewise, we chose a C55 over an E55. Lots smaller (same passenger volume as an A3) but not a lot cheaper (in the CPO market at least). Just more maneuverable, more park-able and more fun.
Reading through the comments, maybe it’s a San Francisco thing.
pourspeller :ummm, mpresley, I think you mean the VW Jetta, since the VW Jedi is not yet available – or are you trying to pull a Jedi mind trick on me? Blast your black Sith heart!
I thought Jedi was the Plural of Jetta! :-)
I don’t know about the US, but in Canada VW sells about four times as many Jettas as they do Passats.
It’s probably the same here in the US, but the plain jane Jetta is not the same as the GLI, which, when optioned out, approaches Passat-like money, and when you start talking those kinds of dollars, most Americans would spring for the larger Passat.
Define “premium.” Premium brands? Maybe not. But the proliferation of formerly luxury-car options — leather upholstery, navigation, xenon headlights, etc. — on even B- and C-segment U.S. cars ought to tell you something. You can order a Mazda3 with most of the toys available on its Volvo S40 platform mate, and it’s clear a lot of people do.
When I hear “premium, small car” I do think of German cars.
In the US, in the small car segment, I think of VW, specifically the Golf/Rabbit, Jetta, and Passat.
In the UK, where car buyers are extremely brand-sensitive, Car magazine consistently recommends the VW Golf GTI over the Audi A3.
When my daughter went shopping for a small car, she chose a VW Rabbit. What sold her (and me) was the superior fit and finish of the VW over Asian brands like Honda, Nissan, Toyota and Mazda.
Ford, GM and Chrysler products were very poor when compared to the VW Rabbit.
I simply do not understand why GM does not offer Opel small cars in North America. I appreciate that Saturn was beginning to offer Opel products and seemed to making some headway. But now GM has sold Saturn and future products will not be Opel based.
I would love to see a benchmark comparison of current US GM small cars to current VW small cars.
I find it remarkable that current VW Golf is manufactured in Germany and sold in the US for less than $20,000
Price is certainly a problem with A3.
I’m looking at Audiusa and just built an A3 with premium plus, titanium sport package auto, quattro, winter package and nav kit. MSRP is 41,105 USD. The same site says they start at 25k. OK I dont need sport package or NAV. Knock 4k off.
Lets say I want Quattro. You have to take auto to get it. No deal.
Thanks=k god they dropped the V6. That would be up near 50k loaded. Prepping for S3 no doubt.
I spec out an A4 the way I want it and its 35k. 6m, Quattro.
Local dealer has 3 A3s stickering at $35. All auto. The A4 6m Quattro is there stickering for 35k.
Lets go try 2010 Suzuki SX awd for $15k in a few months. A blast to drive if 2009 is any clue.
Mazda3 rusts real bad other than galvanzed body panels. They have lousy rear space unless you get the hatch which does not come with 2.0. Wrong.
I should add that I get them. I want an A3. I want a 1 series 5 door. I really want a mini and cant really say why I dont have one, for 19k.
To anwser the original question,
I think most Americans really prefer trucks and SUVs. Driving is not fun for average American as in delicate balance or fine experience. Aside from fun, and the truck-SUV crowd, they want status which leads to larger, or just utility or economy and off to hyundai/Toyota/honda land.
So small premium is always gonna be a small niche.
Alot of folks I know around here equate size with value. Small means it ought to be cheap. When I put them in my small German car with leather stem to stern they are generally pleased and surprised.
Alot of folks around me are just now starting to think outside of the box enough to appreciate something besides SUVs.
Too many of them have been exposed to small AND cheap and think that must apply to all small cars. Painting with too broad of a brush on their part.
Their early 90s Saturn does not favorably compared to a VW or Audi or MINI.
Europe deals with size constraints (roads, parking, taxes) and fuel constraints (high cost) we do not. Change that, and their tastes would stray from what they currently drive to what we currently drive.
Nothing bigger than a BMW M3.
The M3 and 3-Series isn’t the point. Those sell, as do other cars in the “compact” range. This is about the cars yet smaller than that, the subcompacts– not 3-Series but 1-Series, not A4 but A3, not Jetta but Golf (including GTI), not C-class but B-Class, the Mini, etc. Toyota Yaris and Honda Fit size. The old discontinued-in-US-sooner-than-elsewhere Paseo. And so on.
So the Prius and soon-to-be-selling HS250 come out … do you count those as premium small cars?
Those are significantly larger than the models in this discussion. The Prius is Corolla-sized (someone will chime in noting that it has a lot of EPA-measured passenger and luggage cubes for its short length, so it doesn’t count as an EPA compact but as midsize).
You can order a Mazda3 with most of the toys available on its Volvo S40 platform mate, and it’s clear a lot of people do.
Again, the Mazda3 is much bigger than it (the 323/Protege) used to be in the 90s. The sedan tops 180 inches in length now; it’s bigger than the A4.
The Mini is a clear good example, but so many of the other examples in this thread aren’t actually of the size being discussed. The premium brands just don’t price subcompacts enough cheaper than the their compacts enough for most Americans to want them. The only people who buy premium subcompacts over compacts are people who really want a smaller size– you don’t get significantly better gas mileage, performance, or price when you spec similar cars. But most people in the US given the choice of two vehicles costing the same would take the compact over the subcompact. Certain urban areas are more the exception that proves the rule, because their typical driving environment is so different from the average American.
I love my MINI but down here in TX, nobody much understands my preference for small cars. To me, its all about drivability for the buck… I feel like even a 3 series can feel boat-like. Nor do I like spending money on space I don’t use (i.e. back seat, trunk) on my day to day commute.
I think the trick with the MINI is that it doesn’t “feel” like an econobox even though its priced somewhat comparably. Price was my number 1 issue with the 1-series, where I confused myself between going across to a lightly used 3 for the same price/more space/better features or spend a hair more for a new 3.
Now I’ve got a hankering to go even smaller and buy a used miata as a weekender.
Premium in my mind means expensive. Now matter how luxurious a $20,000 car is it’s still a $20,000 car. If I had the cash to throw at a “premium” car it’d be one of two things: the biggest thing on the road, or the fastest.
If a car company wanted Americans to buy their smaller premium cars they’d better be able to offer something in the smaller vehicle that can’t be found in the larger. It’d need to be faster, cheaper (but not too cheap else any average joe could have it and thus it’d no longer be considered “premium”), or offer a better interior. Interiors aren’t easily shown off in the driveway or at stoplights so it’d be best to stick with power or price as a selling point.
In the US, you pay no penalty when driving a large car, luxurious or not, in most of the country, space is ample, and you can park easily in the malls, and seldom need to parallel park.
That’s why it would NOT be practical at all for me to take my “Magnificent 7” 98 740iL with its 202 or so inch length, despite its remarkable ease of handling and turning etc, it would be a nightmare to find a space to parallel park it every working day there.
I sure don’t. My ride is a 20 yr 5 series that I consider a premimum compact. Perception gap?
I think a lot of Americans don’t “get” small cars in the sense that Europeans or even Canadians do.
Even though we Canadians share the same geographical features as Americans, with even less population density, we buy small cars in disproportionate numbers compared to our southern cousins. And we buy a lot of hatchbacks. Smaller cars are less expensive, and as a value proposition I think it’s much better to buy a well contented small car than a decontented larger car. I may not save money on the initial purchase, but my driving experience is more pleasurable, and more than likely I will save money on fuel over the term of ownership.
I see it as a lot of Americans are operating under the premise that a larger car is safer and that a larger car indicates a picture of prosperity, as in:
large car = expensive > small car = cheap
Just wanted to pipe in with my 2 cents and clarify a few things people have been saying about the 1 series. The one thing I find funny with car naming conventions is that because the 1 series is, well, called a 1 series and the 3 series a 3 series. People automatically assume the 3 series is instantly better. That however is not true, consider the 3 series offers no increase in interior space over the 1. As a matter of fact the 1 series has larger dimensions in areas that really matter like front seat leg room and rear seat head room. The 1 & 3 series share the same engines, the same interiors the same optional features (well true with the 128i and 328i coupe, the 135 and 335i may differ more). The 1 series weighs less and performs better because of the weight savings and costs less $5K USD is no chump change, in fact in Canada the 328i is $10K CDN higher then the 128i. The real question is not; why would you go with a 1 series? The question is why would you go with a 3 series?
For the record I bought a 2008 128i my boss being the boss bought a 2008 328i. We car pool to work together in both cars and I can say after a year and half I have no regrets, he got nothing for the $10K premium he paid.
I think I am starting to agree that if the 1 series isn’t selling it is simply because people think they are getting less of a car but in fact they are getting one of the best automotive deals out there (perception gap ;).
here is the yahoo auto links that show the differences
1 series
http://autos.yahoo.com/2009_bmw_1_series_128i_coupe-specs/
3 series
http://autos.yahoo.com/2009_bmw_3_series_coupe_328i-specs/
the question in my mind is, if you are getting nothing more why spend a dime more?
I don’t think Americans get small premium cars just yet. Some people obviously do, but I think it will take some time for this change to occur. I personally would rather drive a 135i than a 335i. It’s smaller size and better brakes make it more fun to drive. $5K less than a 335i is just icing on the cake. I also find it funny that “just” $5K more seems like a small step up. What if the 135i was already the small step up from say a Genesis coupe? The one advantage I’ll give the 3 is that it has a 4 door variant, which makes it more useful. The A3 is also more fun to drive than the A4 (drove them through an autocross course at an Audi event). I have been watching the monthly BMW sales and I find it interesting that the 1 series sales have not dropped off as much as the 3 series sales. I am thinking some people that were maybe considering a 3 before are saving a bit and going with a 1 series instead. Also, if I recall, BMW changed their initial estimate of 20,000 1 series a year to 10,000 BEFORE it came out in the U.S. The current sales figures seem to fall in line with that projection. How is that a failure? The A3 on the other hand…
@TEXN3 is right. The Mazda 3, especially the 2010 is high value though. It’s cheaper and in Grand Touring trim comes with many premium features. It’s just hard to beat the value there, plus it’s fun to drive.
This is great conversation around the topic of Small Premium. Could I persuade any of you to post some of these ideas on the original discussion site?
http://thelab.gmblogs.com/buick-avant/
If you don’t mind helping us out, please contribute your ideas to the discussion thread we’ve started.
Thanks,
Wade Bryant – GM Design
The 128i has substantially less rear seat space than the 328i coupe. One of the things that’s amazing to me about the 335i is the fact that a real 5’10”-6’0″ person can be very comfortable back there for hours at a time. I’ve sat in the 128i at auto shows- there’s simply no comparison there. The stats the above poster posted bear this out- the shoulder room measurement is meaningless in a 4-place coupe- there’s more than enough in either car.