What does 'Premium' really mean today? Let's find out.
Japanese car companies woke up with their heads in a vice about 10 years ago. The South Koreans were already applying pressure with a flood of cheap cars from below, and then the Germans chimed in, putting on the same sort of squeeze only from above. The commercial world can be so unkind.
Today, there are dozens of Mercedes-Benzes, BMWs and Audis between $40k and $60k, duking it out with notional competitors from the land of the rising sun. But these bargain basement Euros are not actually premium products. They’re just examples of brand bastardisation. The Germans are just selling the premium badge on a relatively stripped down product, to wannabe brand snobs who aspire to the cachet but lack the cash.
Here's the probative example, as a barometer of good value: the 'works burger' of Mazda CX-5s - the Akera diesel - against the 130kW Audi Q3 TDI. Aside from the badges, and minor differences in hair and makeup, these things are fundamentally the same. Not just close; the same. Within a cigarette paper of the same size. They’re the same approximate shape, same power, same torque, same seating capacity. In fact, if you landed here from Alpha Centauri tomorrow morning, you would not be able to tell them apart.
Mazda CX-5 Akera diesel (note: prices don't include on-road costs or luxury car tax)
The Mazda is made in Japan. The German SUV is actually made in Spain. The Mazda makes marginally more torque; The Audi has an extra cog in the drivetrain. The differences are diminutive. Knock-for-knock, on fundamentals, they're like a pair of dizygotic twins.
The Mazda is $54,095 driveaway in NSW. The Audi is $60,780.That seems fair: step up from the seagull/albatross to the four rings for just under $7000 extra. Okay. Eminently reasonable.
Except … that’s not the whole story. Gotta dig a bit deeper for that. A favourite dirty trick for car companies is to pump up the optional extras on media evaluation vehicles, allowing dumb journos to presume all the cool kit is standard. It's actually not. Profoundly not, as it turns out in this case.
So how about we start with standard versions of both vehicles, and option them up to the point of equipment equivalence? Apples for apples. See what that does to the price.
The Akera comes with just one option: metallic red paint. $200. That brings the price to $54,295 drive away. Any colour that isn’t black or white (not that they’re colours) - don’t start - is going to cost you $1495 extra on the Audi. After luxury car tax. All these prices coming up include LCT.
The Mazda rolls on 19-inch alloys. That’s cool. Makes the Audi’s standard 17s look a bit anorexic, but there you go. Optioning the Audi up from its standard 17s to 19s will cost you $3510. Bi-xenon headlights and daytime running lights are standard on the Mazda. They’re $2210 extra on the Audi. In fact all of the stuff coming up is standard on the Mazda, but optional on the Audi.
Parking sensors front and rear, and a reversing camera: $1755. GPS: $2470 - that’s part of the Technik Package, which includes an audio upgrade and reversing camera, but the $2470 is just what you pay for the GPS interface. Incredible.
Auto dipping high beam is $975, a proximity key adds $910. Electric sunroof adds $3250 and electric adjustable front seats adds $2210, plus $780 if you want them heated. And if you want leather upholstery - and you would, I mean, leather never hurt anyone. That will set you back another $2795.
Ouch. And all this stuff comes bundled up in the Mazda standard for $54,295. Add it all into the Q3 - it’s $22,015 in optional extras, inclusive of luxury car tax, which the Mazda adroitly sidesteps, and you get objective equipment equivalence. Only now, the optioned-up equivalent Audi is gunna cost you $82,795.
Any way you look at this, the standard Mazda versus the standard Audi tells you which one the premium product really is. Might be time to recalibrate those brand presumptions - at least at this price point. The brands aren't commodities, clearly - Audi is worth more than Mazda. No question. But the components that equate the Q3 and the CX-5 on the basis of specifications absolutely are commodities. And the pricing is flat-out outrageous. How in any of the realms outlined in Dante's Inferno can the difference in price between a set of 17-inch alloy wheels and tyres and the 19-inch upgrade be $3510. As in: 19-inch set minus 17-inch set equals $3510. Really? Either Mazda is giving it up for free, or Audi's presuming you're an imbecile.
All up, it actually costs $28,500 more for the Audi badge, apples for apples. That's a staggering 52 per cent hike in price. Even if you accept that the Audi's a better car, and objectively it might not be: JD Power’s 2014 Vehicle Dependability Study ranked Audi as 14 per cent less reliable than Mazda, you have to ask yourself: Can it possibly be that much better? 52 per cent… Maybe it can, depending on how shallow, vain and ego-driven you are. But it's not just Audi - BMW and Benz are doing this like a pair of 15-year-olds as well. Stripping the product of its premium underpinnings to price-point the Japanese.
The flipside of this proposition is: what does 'premium' actually mean, today? Here in the cheap seats, at $50,000 or $60,000, it means you have to forgo a tremendous amount of otherwise standard equipment, just to show your friends you, sitting behind the cool badge.
Unfortunately, plenty of buyers just don’t do the research. They drive away in a stripped-out special about which the only premium component is the badge. Or they go into the dealer expecting to spend $60k and get violated to the tune of eighty-something, and drive away scratching their heads wondering where the extra $20k on top actually came from. Tragically, they never even shop the Mazda against the German offering because they believe they’re in different leagues. They are - only not in the way you might presume.