Is there no end to the avarice? No tradition so sacred that it remains beyond the clutches of the marketers? No convention too consecrated for automakers to breach in their quest for profits?
Listen to manufacturers these days and you’d swear we are living in the most desperate of times. Why else would Sergio Marchionne, the automotive world’s most famous CEO, be gunning to “merge” with PSA/Peugeot-Citroen, when the ink is barely dry on his takeover of Chrysler? Why would Maserati, Bentley and — ye gads, is nothing sacrosanct anymore — even Rolls-Royce be thinking about producing SUVs. And, truly this must be the end of days; Mercedes-Benz recently announced it is about to produce its first pickup.
Stuttgart, in particular, seems concerned it’s somehow left some pocket unpicked, and that its portfolio will not be complete unless there be a German equivalent of a Silverado in dealerships. Now, to be fair to Mercedes, the company already produces very business-like Sprinter vans to much acclaim, and it has not tarnished the company’s reputation here in badge-obsessed North America.
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As well, Automotive News reports that (for now) the German giant isn’t planning to bring said pickup to the United States, the speculation being that, since the truck will be sourced from Nissan — which itself has failed at gaining a significant toehold in the American truck market — now might not be a good time to go head to head with the Detroit Three in their strongest segment. But, the fact remains: Mercedes will be selling, if not producing, pickups shortly. And, with the biggest pickup market in the U.S., it will probably not be long before Bubba (“Hey, pardner, where the gun racks at?”) from Lubbock is shopping at a Mercedes-Benz dealership. I think I’d pay for that Vimeo.
Mercedes’ motivation, however, is simple to understand. Wherever you look in the automotive world, it’s the luxury nameplates that are thriving, there being no satiating the nameplate-dropping appetites of the rich and nearly rich. Mercedes, Audi and BMW are all enjoying record sales, all three now far from the niche players they once were (their total production last year exceeded 4.5 million units).
Land Rover, to the joys of its accountants, has found there is seemingly no limit to what the independently foolish will pay for exclusivity. First came the über-luxurious Autobiography edition of its top-of-the-line Range Rover, next the 550-horsepower SVR version and then, because it seems the rich had decided neither of those two was nearly expensive enough, Land Rover’s clever engineers combined the two to create the truly outrageous SVAutobiography. This is a lead-sled so incredibly lavish it is equipped with the Wimbledon version of tailgate seats and that 550-hp supercharged V8 — with, of course, a profit-pumping price tag to match.
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2016 Range Rover SVAutobiography
Graeme Fletcher, Driving
Forensic accounting quickly flushes out their motivation. With exclusivity comes huge profit. Porsche’s margins are legendary, the company so flush that it, in the classic guppy swallows whale fable, tried to buy out Volkswagen a few years ago (failing only because it was buying into the economic crash of 2007). Ferrari, meanwhile, generates a whopping 13% of Fiat Chrysler’s overall profit despite accounting for just 0.02% of its worldwide sales. No wonder Mr. Marchionne fired long-standing Ferrari CEO Luca di Montezemolo for resisting the boosting of production to fill FCA’s otherwise barren coffers. The lesson is simple: Profits, in the automotive marketplace, at least, wear a luxury nameplate.
Nor does profitability come from only high-end models. Besides the SUV-ing of the marketplace, the biggest trend in the automotive industry recently is seeing how low one can go in projecting “luxury” onto cars otherwise undeserving. Indeed, along with pampering the über rich — the aforementioned Land Rovers, Mercedes bringing back the Maybach, Audi/Volkswagen snatching up every luxury supercar brand that isn’t nailed down — there’s been a headlong race to the bottom, with high-end brands continually pushing the boundaries of what can be considered a “premium” automobile.
Also read: Motor Mouth: I love Alfa Romeo, but the business is all wrong
Audi’s European A1 is only slightly bigger than a breadbox, the Mercedes CLA’s interior is the very definition of Spartan and BMW is considering hawking a mini-minivan hardly more opulent than Honda’s cut-rate HR-V. The lesson is simple: Slap a blinged badge on pretty much anything and we, the incredibly impressionable, will buy it. No wonder Mr. Marchionne could give a fig about Fiat’s health, but is bound and determined to resurrect moribund-for-decades Alfa Romeo into a 400,000-unit-a-year, badge-blustering, earnings-exceeding machine. Or that while Cadillac was trumpeting the CT6 as its newest flagship, the real big news out of the New York Auto Show was that GM’s luxury division is contemplating another entry-level vehicle below the already cheap and cheerful ATS.
Lest I be labelled a brand snob, let me say I have long been in favour of brand expansion. Unlike so many purists, I believe the Cayenne (and the Panamera, of course) really did save Porsche from a fate of 911-pigeonholed obscurity. If BMW’s master plan really is to use the profits from its pedestrian, front-wheel-drive 1 Series to finance its preternaturally talented M Division, then I will start flogging them myself. And, good God, anything that would bring back Alfa Romeo, no matter how tarnished by corporate profiteering, has to be welcomed with the most open of arms.
But a Mercedes pickup? What’s next, a Lamborghini tractor? Oh, wait…
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A Lamborghini tractor.
Handout, Lamborghini
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