Not too long ago there was a clearly defined line between luxury and mainstream vehicle technology, but recently this line has become almost nonexistent as content historically found only in high-end luxury vehicles has spilled over to the mainstream side.
Why now? The ubiquity of advanced technology in everyday life – there is seemingly a “smart” version for every consumer electronic product out there – has raised consumer expectations as to what should be available in a new car or truck. In addition, demand and production growth have made previously cost-prohibitive technologies more affordable.
As a result, mainstream manufacturers are using technology to their advantage by loading content on vehicles and offering it for a fraction of what it would historically cost. And not only are prices lower for consumers, but manufacturer profit margins generally grow incrementally as more equipment is added to a vehicle.
With the heightened level of competition on the mainstream side, it’s no surprise that when one manufacturer offers a certain feature or features, others will follow suit in order to stay relevant and competitive in the marketplace.
But this trend begs the question – If you can get a mainstream vehicle with the same content as a luxury segment counterpart, why even bother buying a luxury vehicle at that point?
We will put this argument to the test by comparing two very different, in terms of class, yet remarkably similar vehicles. Both are similarly-sized, powerful V6 sedans oozing with the latest technology and creature comforts. The only thing that separates them is price, as when comparably equipped they differ in price by nearly $29k.
The two vehicles are the 2013 Honda Accord and 2013 Mercedes-Benz E350. For the Accord, we will use the top of the line Touring trim which carries a base and configured MSRP of $34,220, while for the E350 we will use the Luxury trim which carries a base MSRP of $51,905, but when configured the same as the Accord the MSRP grows to $62,815.
In the table below, we see that the Accord Touring comes loaded with all of the latest tech gadgets standard, but in order to obtain all of the same equipment on the E350 you have to check off about $11k worth of options, bringing the difference in configured MSRPs to almost $29k.
So what do you get for the extra $29k? In terms of performance, content, and warranty, not a whole lot really… 24 more horsepower and 21 additional foot pounds of torque, rear wheel drive, and an extra year or 14k miles worth of bumper to bumper warranty. Is the dealer ownership experience with Mercedes-Benz better? Probably, but is this and the other cited factors really worth the extra $30K? Don’t get me wrong, the E Class is an excellent automobile and the majority of luxury buyers would never consider giving up the prestige that a brand like Mercedes conveys. That being said, the image that brands like Honda convey is increasingly viewed as more “value luxury” rather than mere “appliance”.