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Old 05-20-2020, 10:17 AM
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Why doesn't VW build it's own luxury cars?


VW as a group does own Audi, Bentley, Porsche and so on, some of these cars like the Audi A8 are always in the top 5 most luxury cars with the most modern and advanced equipment and features, with it's rivals being Mercedes S-class and BMW 7 series.

However, VW as it's own brand doesn't have anything near that level, why? The most luxury car they have is the semi-failed Phaeton, which at most can be compared to a Mercedes E-class, so if VW can have expensive luxury vehicles in it's sub-companies, why does it struggle to have anything with it's own name?

Mercedes has Maybach, so I can understand having a luxury sub-brand, but Audi is not Maybach, it's VW's own rival that has an analogue for anything from Polo to a Golf and a Passat, but after that VW doesn't have pretty much anything to offer.
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Old 05-20-2020, 10:45 AM
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Why should they? It would only dilute the image they have been building since the 50s of being autos that are cheap, reliable and all that. A "luxury VW" is an oxymoron and would only damage the brand.
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Old 05-20-2020, 10:47 AM
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Not a traditional luxury car but they did make the Nardo W12. I'm guessing it didn't do well.
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Old 05-20-2020, 10:49 AM
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Not a traditional luxury car but they did make the Nardo W12. I'm guessing it didn't do well.
Nvm, it never went into production.
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Old 05-20-2020, 10:57 AM
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VW as a group does own Audi, Bentley, Porsche and so on, some of these cars like the Audi A8 are always in the top 5 most luxury cars with the most modern and advanced equipment and features, with it's rivals being Mercedes S-class and BMW 7 series.

However, VW as it's own brand doesn't have anything near that level, why? The most luxury car they have is the semi-failed Phaeton, which at most can be compared to a Mercedes E-class, so if VW can have expensive luxury vehicles in it's sub-companies, why does it struggle to have anything with it's own name?

Mercedes has Maybach, so I can understand having a luxury sub-brand, but Audi is not Maybach, it's VW's own rival that has an analogue for anything from Polo to a Golf and a Passat, but after that VW doesn't have pretty much anything to offer.
You said it yourself. Bentley is VW's answer to the Maybach. Audi is VW's answer to Mercedes & BMW. Porsche is an iconic brand all on its own. As is Lamborghini,
which is owned by VW as well. They also own Ducati.

Seem to me, VW has the market pretty well covered.
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Old 05-20-2020, 10:57 AM
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Mercedes has Maybach, so I can understand having a luxury sub-brand, but Audi is not Maybach, it's VW's own rival that has an analogue for anything from Polo to a Golf and a Passat, but after that VW doesn't have pretty much anything to offer.
Mercedes killed Maybach as a separate brand a few years ago and now it's just a name attached to a luxury version of the S-Class.

And as to why VW doesn't have one, my guess is that it's expensive and sales numbers are tiny.
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Old 05-20-2020, 11:00 AM
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Luxury car buyers don't want a car with a VW badge on it. There's no prestige associated with owning a VW. No one brags about owning a Volkswagen. That's why the Phaeton sold poorly. That's the same reason Chevy, Ford, Toyota*, and others don't make luxury cars under those brands, but rather they or their parent company sells luxury cars under separate brands like Cadillac, Lincoln, and Lexus. And Volkswagen Group sells luxury cars under the Audi and Bentley brands as you already pointed out.

*Except for the Toyota Century, which is only sold in Japan.

Last edited by WildaBeast; 05-20-2020 at 11:01 AM.
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Old 05-20-2020, 11:01 AM
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VW has the Arteon, which has a higher starting price than Acura's lowest. I guess that's luxurious enough for them.
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Old 05-20-2020, 11:11 AM
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Well, I actually had one old timer complain about the modern version of the VW Beetle, saying that it was "too fancy" for a VW. He went on to say that the VWs back in his day started to shake at 70 MPH and were loud as hell.
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Old 05-20-2020, 11:20 AM
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Luxury car buyers don't want a car with a VW badge on it. There's no prestige associated with owning a VW. No one brags about owning a Volkswagen. That's why the Phaeton sold poorly. That's the same reason Chevy, Ford, Toyota*, and others don't make luxury cars under those brands, but rather they or their parent company sells luxury cars under separate brands like Cadillac, Lincoln, and Lexus. And Volkswagen Group sells luxury cars under the Audi and Bentley brands as you already pointed out.

*Except for the Toyota Century, which is only sold in Japan.
This, pretty much.

My understanding is that Honda, Toyota, and Nissan all sell higher-end models under their main badges/brand names in Japan, but when they wanted to enter that segment in the U.S. in the 1980s, they discovered that Americans associated their brand names strictly with the economical cars that they had focused on when they had entered the U.S. market. So, they launched new badges: Acura, Lexus, and Infiniti, respectively.

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Old 05-20-2020, 11:24 AM
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If you're trying to sell to the elite few, maybe the name of your brand shouldn't be "people's car"
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Old 05-20-2020, 11:38 AM
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As other's have said, it's all about branding. And I don't just mean that rich people don't want a VW badge. It's also that car brands spend decades and millions of pounds in establishing where their brand fits in the market - who their audiences are and what those audiences want. They develop cars that fit their brand.

A luxury car would totally muddle the VW brand. No one would understand what VW were for any more. Strong brand know their place in the market and work it hard. VW would no more make a luxury car than Gap would make couture clothing. What would be the point? The damage to the brand - and existing markets - isn't worth the additional sales of the shiny new stuff.

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Old 05-20-2020, 12:01 PM
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In addition to what everyone else said, their dealerships, at least the ones around me, are not set up like luxury car dealers, nor do they have the same level of service. My local VW dealer is relatively small with a lot of cars in it. The service waiting area is utilitarian at best. It's totally different from, say, the local Acura dealer, which has much less crowding in the showroom, much nicer service area, and much better service (in terms of loaners, responsiveness, etc.).
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Old 05-20-2020, 12:29 PM
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Well, Porsche is essentially a luxury/high performance VW, at least that is how it started. Both were started by Ferdinand Porsche, the VW first, and both started out with the air cooled boxer engines.

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Ferdinand Porsche founded the company called "Dr. Ing. h. c. F. Porsche GmbH" in 1931,[4] with main offices at Kronenstraße 24 in the centre of Stuttgart.[5] Initially, the company offered motor vehicle development work and consulting,[4] but did not build any cars under its own name. One of the first assignments the new company received was from the German government to design a car for the people, that is a "Volkswagen".[4] This resulted in the Volkswagen Beetle, one of the most successful car designs of all time.[6] The Porsche 64 was developed in 1939 using many components from the Beetle.
https://en.wikipedia.org/wiki/Porsche
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Old 05-20-2020, 12:40 PM
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VAG is one company, if they decided to build a luxury car off on existing VW platform (which they do all the time) it wouldn't make sense to brand it as a VW because then they would directly be competing with whatever version of the exact same car Audi is selling.

For instance, the same platform that underpins the VW Touareg mid-size SUV also underpins the Audi Q5, the Porsche Cayenne, the Bentley Bentayga, and the Lambo Urus. So they've done exactly what you're suggesting -- built luxury models off a VW chassis -- they're just not selling it under the VW name, because they have other brand images to support those models.
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Old 05-20-2020, 12:44 PM
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This is like asking why doesn't Chevrolet have a luxury vehicle, that competes with the Cadillac brand?

Because it would cannibalize GM's own offering.
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Old 05-20-2020, 01:18 PM
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Also worth noting that fully optioned top spec VWs are expensive compared to their competitors - VWs in general command a higher resale value on the used car market, so althoguh they are not right at the high end, they certainly are nowhere near the lower end either.
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Old 05-20-2020, 02:32 PM
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Well, I actually had one old timer complain about the modern version of the VW Beetle, saying that it was "too fancy" for a VW. He went on to say that the VWs back in his day started to shake at 70 MPH and were loud as hell.
Yes.

I've owned two VWs in my life. A '68 Beetle, and a 2002 Passat.

The Passat is very nearly a luxury car (for 2002, anyway). Spacious intererior, nice leather seats, good sound system, excellent climate control, etc. Of course, all of these are pretty much standard on a Toyota Camry these days.

I don't know what that means. That our standards for what constitutes a "luxury car" are getting ridiculous? Maybe. What does a Lexus do that my Passat doesn't do? Other than let people know how much money the owner makes.

The Beetle was a lot of fun. As a car, it would be considered non-functional today.
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Old 05-20-2020, 03:12 PM
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However, VW as it's own brand doesn't have anything near that level, why? The most luxury car they have is the semi-failed Phaeton, which at most can be compared to a Mercedes E-class, so if VW can have expensive luxury vehicles in it's sub-companies, why does it struggle to have anything with it's own name?
WHAT? Hopefully whatever hallucinogenics you were taking when you wrote that have worn off, and you can see for yourself how insane it sounds. The Phaeton was VWs biggest, fattest swing at the luxury segment. It's not an E-class equivalent, the damn thing was based on a freaking Bentley as a rival to the S-class, and shares features with the Bentley GT and Audi A8. The W12 version was $120k USD.

Ferdinand Piech has spent the last couple decades trying to come up with a project that puts his stamp on the family business. Ferdinand Porsche the founder gave us the 356 and its variants. Ferdinand "Butzi" Porsche gave us the 911. He wants a legacy car for another Ferdinand. His first try was the Bugatti Veyron and then with the VW Phaeton. The Veyron is a solid halo car, but it's never made money (or sense, for that matter). It won't be a legacy.

The concept for the Phaeton was a low-key, almost stealth luxury car. Something just as comfortable and high spec as the luxury brands, but discreet. The car succeeds in that aspect. But the market for something like that is small. As Honda, Toyota, Nissan, and more recently Hyundai have learned, most people, especially Americans, want a luxury badge for their luxury cars, to flaunt their wealth a bit. Something that looks like a big Passat won't do.

There's also the issue of cognitive dissonance. People expect luxury cars to be expensive to maintain, but despite knowing the Phaeton has the same components and the higher brands, they groused and balked and paying the same bills for a VW. Luxury cars depreciate a disproportionate amount, but the Phaeton's used values are truly epic because of the maintenance. But that's another rant/hobby horse of mine.

Last edited by epbrown01; 05-20-2020 at 03:15 PM.
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Old 05-20-2020, 05:39 PM
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Doesn't "Volkswagon" mean "people's car", as in the common people? Wasn't that Hitler's original strategy for them?
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Old 05-20-2020, 05:41 PM
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Yep, like they said, sorry, but if you are literally "People'sCar", the market will not respond well to an attempt to go dramaticaly upmarket.
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Ferdinand Piech has spent the last couple decades trying to come up with a project that puts his stamp on the family business.
He has also been dead for 9 months so I don't think he cares any more.

Besides the company is currently kind of busy still with cleaning up and restoring goodwill after Emissionsgate.

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Old 05-20-2020, 05:43 PM
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"In 1934, with many of the above projects still in development or early stages of production, Adolf Hitler became involved, ordering the production of a basic vehicle capable of transporting two adults and three children at 100 km/h (62 mph). He wanted all German citizens to have access to cars.[8] The "People's Car" would be available to citizens of the Third Reich through a savings plan at 990 Reichsmarks (equivalent to €3,747 in 2009)—about the price of a small motorcycle (the average income being around 32 RM a week).[10][11]
Despite heavy lobbying in favor of one of the existing projects,[which?] it soon became apparent that private industry could not turn out a car for only 990 RM. Thus, Hitler chose to sponsor an all-new, state-owned factory using Ferdinand Porsche's design (with some of Hitler's design constraints, including an air-cooled engine so nothing could freeze). The intention was that ordinary Germans would buy the car by means of a savings scheme ("Fünf Mark die Woche musst du sparen, willst du im eigenen Wagen fahren" – "Five marks a week you must put aside if in your own car you want to ride"), which around 336,000 people eventually paid into.[12] However, the entire project was financially unsound, and only the Nazi party made it possible to provide funding.[13][Note 1]"

from the Wikipedia article on "Volkswagen".

BTW I misspelled it above. Sorry!
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Old 05-20-2020, 06:17 PM
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He has also been dead for 9 months so I don't think he cares any more.
I hadn't heard, but I'm not surprised. He started those projects because he knew the end was near.
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Old 05-20-2020, 06:47 PM
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"In 1934, with many of the above projects still in development or early stages of production, Adolf Hitler became involved, ordering the production of a basic vehicle capable of transporting two adults and three children at 100 km/h (62 mph). He wanted all German citizens to have access to cars.[8] The "People's Car" would be available to citizens of the Third Reich through a savings plan at 990 Reichsmarks (equivalent to €3,747 in 2009)—about the price of a small motorcycle (the average income being around 32 RM a week).[10][11]
Despite heavy lobbying in favor of one of the existing projects,[which?] it soon became apparent that private industry could not turn out a car for only 990 RM. Thus, Hitler chose to sponsor an all-new, state-owned factory using Ferdinand Porsche's design (with some of Hitler's design constraints, including an air-cooled engine so nothing could freeze). The intention was that ordinary Germans would buy the car by means of a savings scheme ("Fünf Mark die Woche musst du sparen, willst du im eigenen Wagen fahren" – "Five marks a week you must put aside if in your own car you want to ride"), which around 336,000 people eventually paid into.[12] However, the entire project was financially unsound, and only the Nazi party made it possible to provide funding.[13][Note 1]"

from the Wikipedia article on "Volkswagen".

BTW I misspelled it above. Sorry!
I saw a programme hosted by James May (of Top Gear fame) in which he talked about the Beetle design. As I remember, after the war, the Allies offered the design to various British or American auto manufacturers but none wanted it. Imagine, for example, if Ford had taken the design and produced the car under its name.
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Old 05-20-2020, 07:53 PM
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Wouldn’t the Volkswagen Touareg be considered a luxury vehicle? They aren’t/ weren’t cheap!


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Old 05-20-2020, 08:21 PM
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My sister has a Volkswagen Atlas, which might be considered a semi-luxurious SUV.
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Old 05-21-2020, 12:09 AM
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Wouldn’t the Volkswagen Touareg be considered a luxury vehicle? They aren’t/ weren’t cheap!
Nope. It's basically the cheap version of the Porsche Cayenne or the short version of the Audi Q7.
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Old 05-21-2020, 12:41 AM
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Wouldn’t the Volkswagen Touareg be considered a luxury vehicle? They aren’t/ weren’t cheap!
As this Forbes article notes, the issue was that the Touareg was too high-priced / too "luxury" for the U.S. market (and particularly so, now, with the third-generation version, which they don't sell in the U.S.)

The Touareg never sold particularly well in the U.S. -- only a few thousand a year. This all serves to illustrate the earlier point: in the U.S., the Volkswagen brand name doesn't fit well with a luxury vehicle.

The Atlas, as Sunspace notes, is VW's newer, lower-price (relative to the Touareg) SUV -- a little googling indicates that, when it was discontinued in the U.S., the Touareg started at around $50K; the Atlas starts at around $31K.

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Old 05-21-2020, 01:00 AM
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As this Forbes article notes, the issue was that the Touareg was too high-priced / too "luxury" for the U.S. market (and particularly so, now, with the third-generation version, which they don't sell in the U.S.)
Just to clarify: I was saying that the Touareg was too "luxury" for a Volkswagen in the U.S. market. Plenty of luxury auto badges sell tons of luxury SUVs here, of course.

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Old 05-21-2020, 10:51 AM
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VW seems to have the mid-range car market, while Audi has the upscale/sporty market. The Volkswagen CC is about as high-end as VW badged vehicles get, and it's just a upjumped Passat when you get down to it.
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Old 05-21-2020, 11:34 AM
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The Volkswagen CC is about as high-end as VW badged vehicles get, and it's just a upjumped Passat when you get down to it.
Followed by the Arteon, which was mentioned in post #8. Arteon is called "CC" in China.

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Old 05-21-2020, 12:37 PM
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Please note that is at the middle of the Volkswagen brands in Europe. Bentley, Lamborghini and Porsche are relatively exotic.

If you look at the brands that are sold in large volumes (and which share identical platforms and engines), only Audi is more luxurious, while Skoda and Seat are the cheaper brands. Nowadays the price difference is not that big anymore, so people are likely to chose VW because it has the best brand image.

Really, a VW polo, Seat Ibiza, Skoda Fabia and Audi A1 are pretty much identical.

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Old 05-21-2020, 01:17 PM
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However, VW as it's own brand doesn't have anything near that level, why? The most luxury car they have is the semi-failed Phaeton, which at most can be compared to a Mercedes E-class, so if VW can have expensive luxury vehicles in it's sub-companies, why does it struggle to have anything with it's own name?
Because at the high end of the market, labels matter, and people don't want to buy high-end vehicles with the same badge as entry-level vehicles. It's the same reason Ferrari was able to sell cars at a massive premium over objectively better Porsches for years: Porsche made as many cars every year as Ferrari had made in its entire existence (Ferrari volume is now up a bit so this is no longer true, but Porsche still sells 5 cars for every Ferrari sold.

Mercedes is kind of sui generis in that it has been able to retain an upmarket image despite building small cars, commercial vehicles, and the like. It's not an accident that they didn't put three-pointed stars on Smart vehicles, and nor is it an accident that Audi doesn't make a city car even though they could easily stick an Audi badge on an Up!
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Old 05-21-2020, 02:08 PM
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In Japan they use the same brand name for high end cars. For example Acuras in the US are Hondas in Japan.
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Old 05-21-2020, 02:43 PM
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Mercedes is kind of sui generis in that it has been able to retain an upmarket image despite building small cars, commercial vehicles, and the like.
Mercedes are rental cars and taxis, though, so they definitely have mid-range models available.
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Old 05-21-2020, 04:01 PM
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In Japan they use the same brand name for high end cars. For example Acuras in the US are Hondas in Japan.
The three Japanese luxury brands are somewhat different in global scope rather than Acura being closely representative of the other two. Acura is virtually entirely a US/Canada brand, only a few % of sales are anywhere else. Infiniti is sold in more places than Acura but still something like 3/4's North America. Lexus is still over 1/2 North America but it's a non-asterisk as a brand in more markets than the other two, and is sold in Japan unlike the other two (though in fairly small numbers).

There are lots of variations in car brand marketing that are at least not total failures. As others mentioned Mercedes has long managed to be a luxury and non-luxury brand in some places (Mercedes taxi's in a lot of the world, etc) but a luxury-only brand in other places. But it still didn't market the Smart Car as a Mercedes in the US (probably in part not knowing if it would succeed, which it didn't, a different risk than brand dilution from a *successful* product). It's a messy process because it's dealing with consumer perception in different countries and that's not necessarily logical within or among them.
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Old 05-22-2020, 11:28 AM
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There are lots of variations in car brand marketing that are at least not total failures. As others mentioned Mercedes has long managed to be a luxury and non-luxury brand in some places (Mercedes taxi's in a lot of the world, etc) but a luxury-only brand in other places. But it still didn't market the Smart Car as a Mercedes in the US (probably in part not knowing if it would succeed, which it didn't, a different risk than brand dilution from a *successful* product). It's a messy process because it's dealing with consumer perception in different countries and that's not necessarily logical within or among them.
Toyota did something similar in the US with its Scion marque, a gambit on branding for what were expected to be "edgier" vehicles vs. Toyota's mixed-blessing "Point-A-to-Point-B transportation appliance" image. It did not get enough traction and the more succesful remaining models were melded back into the Toyota brand.
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Old 05-22-2020, 11:28 AM
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Mercedes are rental cars and taxis, though, so they definitely have mid-range models available.
True. But again, that just shows that Mercedes' perception is unique because building taxis hasn't hurt their brand image.
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In Japan they use the same brand name for high end cars. For example Acuras in the US are Hondas in Japan.
Acuras in the US are Hondas almost everywhere. The TLX was the European-market Accord. The RSX was the Japan-market fourth-generation Integra. Nissan has done this at times as well; the Infiniti G20 was the European-market Nissan Primera.
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Old 05-22-2020, 11:56 AM
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True. But again, that just shows that Mercedes' perception is unique because building taxis hasn't hurt their brand image.
I wonder if there's a different perception of Mercedes in Europe versus the US. IIRC they specifically don't sell those more mid-range models in the US because they think it will hurt their image as a high end luxury brand here.

Interestingly for a long time VW did the opposite -- they didn't want to sell their nicer models in the US because they didn't want to hurt their image as affordable, basic transportation they'd cultivated here. When they introduced the Rabbit (Golf) in the US they offered an extremely basic version because the wanted to be able to advertise a starting price about the same as a Beetle. Except VW sales in the US started tanking in the 1980s as the Japanese brands took over the "basic transportation appliance" market, so in the early 1990s they reinvented themselves as a more midrange brand in the US (remember the "Fahrvergnügen" ad campaign?).
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Old 05-22-2020, 11:58 AM
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Acuras in the US are Hondas almost everywhere. The TLX was the European-market Accord. The RSX was the Japan-market fourth-generation Integra. Nissan has done this at times as well; the Infiniti G20 was the European-market Nissan Primera.
This was true but is now outdated. Honda introduced Acura to the Japanese market in 2005. Lexus was introduced around the same time. Acura in Japan has struggled mightily, but as far as I know they're keeping it going. Acura has struggled in the US for that matter, it's just never had the required cachet. Lexus still exists in Japan.

I don't know the history of Infiniti in Japan but I searched and saw an article that the Infiniti Skyline was going to be come the Nissan Skyline again, so they must have introduced Inifinti in Japan at some point. I do know that Red Bull Racing was Infiniti branded for several years, until they split with Renault, in order to promote the Infiniti nameplate in the EU and elsewhere.

It does seem like all of these luxury brands introduced in Japan are struggling to some extent. I believe national pride in the Toyota and Nissan nameplates probably hurt their efforts but that's just a WAG. It'd be like rebranding the Corvette, nobody cares that it's "just" a Chevy. Acura could have done better since Honda doesn't have quite the same history in Japan as they do here, but I guess Acura's models aren't that much different from the Hondas they're based on anyway.

Last edited by steronz; 05-22-2020 at 11:58 AM.
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Old 05-23-2020, 02:35 PM
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VW as a group does own Audi, Bentley, Porsche and so on...
VW: Everyday car

Audi: Luxury sports car

Bentley: Ultra luxury car

Porsche: High-performance sports car

As others have noted, you stick with your brand image. Bentley doesn't make race cars, for example.
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Old 05-24-2020, 07:54 PM
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As others have noted, you stick with your brand image. Bentley doesn't make race cars, for example.
Bentley was originally a sports car brand, before RR bought them and just stuck the badge on Rolls-Royce chassis, with the occasional flex at performance likely the Bentley Turbo. VW has tried to bring back some of that sporting image, so there have been race car versions of the Continental GT.
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Old 05-25-2020, 09:06 AM
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Bentley was originally a sports car brand, before RR bought them and just stuck the badge on Rolls-Royce chassis, with the occasional flex at performance likely the Bentley Turbo. VW has tried to bring back some of that sporting image, so there have been race car versions of the Continental GT.
Thanks for the info. I should have chosen a more accurate example.
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Old 05-26-2020, 04:15 PM
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I think a more pertinent question would be why do VW and Mercedes (and Opel, for that matter) not offer a motorcycle under one of their numerous brands? BMW does under its own brand and it has always been a big success. I think I read somewhere that VW or the VAG even bought a stake in Moto Guzzi but they did not go along that road after all. Still I wonder why.
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Old 05-26-2020, 04:20 PM
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True. But again, that just shows that Mercedes' perception is unique because building taxis hasn't hurt their brand image. [...]
It not only has not hurt their brand image, they developed an aura of reliability out of the fact that their taxis lasted for ages. Taxis have helped Mercedes' image. In Germany most taxis are still Mercedes, though not with such an overwhelming market share as they used to have.
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Old 05-26-2020, 05:28 PM
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I think a more pertinent question would be why do VW and Mercedes (and Opel, for that matter) not offer a motorcycle under one of their numerous brands? BMW does under its own brand and it has always been a big success. I think I read somewhere that VW or the VAG even bought a stake in Moto Guzzi but they did not go along that road after all. Still I wonder why.
VWAG owns Ducati, and Mercedes-Benz owns a stake in MV Agusta. Moto Guzzi has no automotive manufacturer relationship - they're owned by Piaggio, (most famous for Vespa).

I'll admit, I always wanted a Honda S2000 to park next to my CBR600RR when I had it.
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Old 05-27-2020, 12:48 PM
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I think a more pertinent question would be why do VW and Mercedes (and Opel, for that matter) not offer a motorcycle under one of their numerous brands? BMW does under its own brand and it has always been a big success. I think I read somewhere that VW or the VAG even bought a stake in Moto Guzzi but they did not go along that road after all. Still I wonder why.
Because it wouldn't be profitable.

Outside parts of Asia, the motorcycle market is pretty small. In Europe, 15 million cars are sold every year versus 1 million motorcycles (and that includes scooters and mopeds). Let's say VAG starts making bikes and captures 10% of the market. That's a huge stretch, given that Honda has about 20% of the European bike market after 60 years, but still. That means VAG sells 100,000 bikes, likely priced around the same as the Up!, which itself sells a little less than 100,000 units in Europe per year.

In practice, your bikes are going to be priced much lower, because who's going to buy a bike from someone that hasn't built them before when they can have a Honda or Kawasaki or Aprilia? Don't even think about getting into brand-snob bike territory; nobody is going to consider a start-up as an alternative to a Ducati, Harley, Triumph or BMW.

Now, the Up! uses the same NSF platform that all of VAG's city cars are based on, and other than the body, most of the bits are straight out of the VW/Skoda parts bin. So it doesn't cost much more to develop and build than any other model. And of course, anyone who can design, develop or build a Golf can do the same with an Up!

Compare that to the bikes. You can't use many parts in motorcycles that you do in cars, because everything is smaller. It's not like you can just turn the inline four-cylinder engine from a hatchback into a two-cylinder bike engine; bikes have to rev much higher and require far less torque. The instrument gauges are smaller, the seats are completely different, the wheels and tyres are different, the gearboxes are different, and the exhausts are much shorter. Even the brake callipers can't be shared. I can't think of anything other than maybe small electrical components and fasteners that you could share between a car and a bike. Few if any of your employees are bike engineers, so you have to lure them away from other bike manufacturers at great expense, or train them from the ground up.

But let's say you build a bike and you can take a loss on it for a while until you establish market share and credibility. Where are you going to sell it? Your existing dealer network is specifically for cars. Their employees don't know anything about bikes, and aside from a very few metropolitan dealers with shared facilities, they won't be able to repair them. So you have to build an entirely new dealer network to sell your entirely new product.

Now, you might say all the same things hold true for Bugatti: VW had to build out the company from scratch, just to sell a tiny number of hypercars. The difference is (1) Veyrons and Chirons sell for millions, so they don't cut into your import quotas and they are vastly more profitable per unit; (2) the R&D that goes into your pointless hypercar project trickles down into your mass-market products, so you can now sell a Golf R with carbon-ceramic brakes and theoretically sell more; (3) Bugattis are halo cars that in theory make the rest of your range a bit more special.

Obviously, none of this is insuperable, and if Ferdinand Piech's retirement vanity project was to launch VW as a motorcycle manufacturer, he probably could have done it. But I doubt it would have made the company any money.
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Old 05-27-2020, 01:29 PM
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But let's say you build a bike and you can take a loss on it for a while until you establish market share and credibility. Where are you going to sell it? Your existing dealer network is specifically for cars. Their employees don't know anything about bikes, and aside from a very few metropolitan dealers with shared facilities, they won't be able to repair them. So you have to build an entirely new dealer network to sell your entirely new product.
Just as as an interesting side note, as I understand it Honda did pretty much that, but in the opposite direction, when they first started selling cars in the US. By the late 1960s Honda was pretty well established here as a motorcycle company. When they first started selling cars here in the early 1970s they initially sold them through their existing motorcycle dealerships for the first few years until they could get their car specific dealerships established. Imagine going to a motorcycle dealer to test drive the new '73 Civic.
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Old 05-27-2020, 02:46 PM
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Veyrons and Chirons sell for millions, so they don't cut into your import quotas and they are vastly more profitable per unit
Not for the Veyron. VW famously lost millions on each one they sold. They are very much just a halo vehicle (a point you did make as well). They have said that the Chiron won't lose money but that sounds a long way away from claiming they'll make a sound profit.
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Old 05-27-2020, 04:10 PM
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Not for the Veyron. VW famously lost millions on each one they sold. They are very much just a halo vehicle (a point you did make as well). They have said that the Chiron won't lose money but that sounds a long way away from claiming they'll make a sound profit.
In general it's proved tricky to make money on exotic car brands, as indicated by how often the famous ones which have been around continuously (Ferrari, Lamborghini, Aston Martin etc whereas Bugatti is ~20 yr old revival by VW of a defunct brand) have shifted ownership. Ferrari now is a standalone company with reasonable finances. However Formula 1 team sponsorship and logo licensing revenue is much more significant, especially as % of profit, than for any mass market car company. It's not really the same business.

And based on some idea of uniqueness, which is why it's not exactly right to call Bentley 'ultra luxury' and Porsche 'high performance sports car' as if entirely separate. It's more complicated than that: there are very high performance, although big, Bentley's and a majority of Porsche's global sales are now sporty SUV's not sports cars. But both existing is viable if there's something, albeit intangible, that's unique about each. Otherwise it wouldn't work, and no guarantee it always will. And Porsche's sales are nearly 30 times Bentley's so no question how they rank in importance within VW. The other thing about niche brands in big companies is that the worst case is usually them taking up too much management time and energy, rather than losing huge amounts of money for a big car company.
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