They may sell fewer luxury brand cars (I think numbers have already shown that in a prior post about trucks and SUV's from a couple months ago), but they will still sell. Fine for GM, Nissan, Toyota, etc. who have both luxury and mainstream brands. Bad for BMW and Mercedes. Anyway, that "luxury" dealership experience is one reason why I would probably go ahead and get a G37 (or used G35 or M35) instead of a Maxima. As much as I like the new Maxima, as good as it looks, as much as I don't really care about RWD in a family sedan... I've been burned by truly awful dealer service from Nissan and would never buy another one. If I do need service, I want a knowledgeable service rep, a free loaner car, or at least a nice waiting area with wifi and decent coffee. Maybe I'm too hung up on anecdotal evidence, but we did try two Nissan dealers and got equally bad treatment at both.

luxury brands make sense when theres a clear seperation from luxury and non-luxury. When the line blurs, like in your example, then you really question what you are paying for?

and unlike ahightower, at least when your 'younger', it rarly matters what dealer you go to, in fact, you might get treated worse at the nicer brand, because they dont see you as a potential cosumter.

Premium models have never made sense from a financial perspective, even when the economy was strong. Unless you are cash strapped, cars are emotional purchases. You could make the agrument that most car acquisitions are made by people who don't really need another car. It'd be one thing if every car transaction happened because that '84 Cutlass in the driveway is rusted through its fenders and on it's third engine but that is not the reality. Most people simply want something new/different and go get another car not based on a necessity. You cannot attempt to rationalize an irrationale purchase decision. Luxury cars appeal to egos and status and will continue to do so as long as people can get credit. My Aunt, a (once) big time realtor in Fairfax, VA used to drive a '95 Honda Accord before she realized you shouldn't be trying to sell million dollar+ homes in a basic family sedan. So she went a brought an S430 with cash to look the part and properly fit into her reality. By the way, that Accord is still in the family running strong.

In specific regards to the Passat CC, I'd have an A4 2.0T over it any day. The A4 has a superior chassis since the Passat left the Audi platform and moved to an enlarged Jetta FWD architecture. The A4 has superior weight distribution and control arms as opposed to struts up front. It also has a performance oriented AWD system as opposed to the reactionary FWD biased systm in the Passat. From an enthusiast standpoint, there's a marked difference between the two so this is essentially an apples to oranges comparison.

What would bother me is if I'm paying more money for the "premium" car if it's on the same platform as the base version. Example: I would NEVER buy a TL or RL for $40k+ since it's the same exact platform/chassis as a base $21k Accord four banger. I WOULD buy a G37 over a Maxima because the underpinnings are very much superior than the D-platform Nissan Altima/Maxima. Same goes for the CTS and A4- they are not related to the cheaper models under their respectful company's umbrella.

Car buyers are a finnicky bunch. There are those who just want a car to get them where they need to go with minimum fuss. Others need to have a car that makes a statement. As hightower stated above, the difference goes beyond the vehicle itself. It's the level of attention and service that "luxury" car buyers expect to receive when they go into and upscale marque. The key is exclusivity-the perception of a better ownership experience than the Camry/Accord/Maxima buyer.

That said, I could live without the over-pampering. As long as my car is comfy and reliable, I don't need a fancy emblem on the hood or grill to make me feel better.

But so much goes into a car purchase that mere numbers do not include! Vehicle styling still plays a large role for many people in their car-buying decision-making.

Personally, I look at a car as something I would like to live with for a long time. Even though it is a non-durable good, it still seems like an investment. A lot of thought and emotion go into purchasing a car, the idea of luxury is one. However, where luxury falls in the list of priorities in a car depends on the person.

Buying a 'luxury' vehicle isn't the first thing I think of when I go to a dealership or start looking online. I like sporty cars, so they may be considered 'luxry' and they may not. The end result is a list of cars that I would like get because of their sporting nature. From here, I whittle it down even more.

The treatment that I receive at a dealership has a big impact on how I view the brand. I'm young (mid-20s) and when I recently went into a Nissan dealership, I had to make a point of finding and talking to a salesman. After talking to the salesman about what I was looking for (a 350Z), I was told that I couldn't afford it and he tried to steer me to something else. This was hugely disrespectful!

Counter to this, when I visited a BMW/MB/Porsche dealer, I was immediately approached and asked if I had any questions. The salesman was polite and informative, even telling me about how I could save money by participating in the European Delivery program. This is despite that fact that I was looking at a 1 Series, the cheapest new car at the dealership.

The premium feel and respect associated with a 'luxury' brand is worth it in my opinion. I'd rather pay a little more to not have a horrible dealer experience.

The whole idea of brand cachet makes little practical sense. Will that shiny BMW badge get it up a snowy hill better than a "sleazy" AWD Suzuki? No. Cachet here means BMW driver shivers on leather seats waiting for help while the Suzuki charges forward.

No matter what brand's name is, its DNA percolates through all its divisions. If you like what a brand "is" and its vehicle suits you, well and good. :-)

Meanwhile the franchise system is mostly the same for all USA dealers (every manufacturer mouths the tired but true phrase "the dealer is an independent business and we have no control over them"). There are Lexus dealers that are just as sleasy as any inexpensive brand. And the same europeian haughtiness's wafts from Audi as well from VW.

Your chances of getting good service wont' change __unless__ you do your dealer research thoroughly before purchase.

Karl, that is an interesting perspective. I saw it from the flipside where VW is fighting a loosing battle- they are not making a "price beater" Audi, they are making a overpriced VW.

I point to your comment that you would still take a A4 over the CC anyday. That's what buying an Audi buys you.

VW, imo, has it's head up it's butt. Instead of making stellar Rabbits, GTI's, Jettas, (where is the FIT, Prius, Scion competitor from VW??) they continually try to compete with their sister-company Audi... why?

Why a Toureg and CC and not a VW Microbus? Did they not learn from the Phaeton?

VW needs to focus on making great value-priced cars. There is actually a market for it and they have done a piss-poor job at capitalizing on it.

No one, including me, would buy a CC over a Audi. Dealership experience and service counts too. And if i'm bucking up over $30K for a sports sedan, I'll get the one that actually is fun to drive- and that's the Audi. Why not pay just a bit more for the Audi?
At the end of the day, people will see the CC as a Passat with less room, yet costs more money.

edit- sorry that was chavis10's comment that "I'd have an A4 2.0T over it any day" not Karl.

They make sense if you get something from them. Our Audi = horrible service. The service is just as bad as any VW, Mazda, Nissan, Honda, Toyota, etc. My BMWs always were first rate dealer experiences. More than that, some premium brands allow you to order cars - Audi, BMW for instance. Most non-premium and even some pseudo-premium (Lexus, Acura) will not really allow you to build a car ala carte.

I would rather pay 40k for the exact car I want v. 35k for a cat with features that detract from my enjoyment of the vehicle (automatic transmissions for instance).

Sometimes the premium brand does use better components, parts. Sometimes. Audi is not such a brand. Audi's cars are pretty much the same as VWs. Lexus, Acura and Infiniti all share parts with lower end cars.

FWIW, at 22-23k the 2.0t Passat CC would be fine. Maybe 27-28k with a few features. At 30k I can't figure out why anyone would drop that coin for any car from a basic automaker.

The Passat CC is pretty stupid simply because it's smaller and less practical than the regular Passat yet costs even more fully loaded. The sole advantage of the Passat over the A4 was size and now that is has shrunken for CC duty, the A4 is superior in every which way.

Karl-

I think you have your answer in all of the comments here. Seems like most of the posts here acknowledge your point about the cars themselves but more specifically emphasize the customer service difference between luxury & non-luxury nameplates. There's also a good, if weaker point, about luxury nameplates tending to have more refined & sophisticated underskin bits.

By these two premises, only RWD luxury cars are irrefutably sensible, while luxury cars on shared platforms (your ES350/Camry example) make sense only if one values the premium experience.

Coincidentally, I think this coincides with what the marketplace thinks because the the benchmark & best-selling luxury models (namely the 3-series and the E-class) fit these parameters.

Karl, good point. Looking at the prices of some cars it makes you wonder if you are investing the money wisely. Right now if I'm looking for the best bang for the money for a luxury car I get Hyundai Genesis. Do luxury brands make sense? I say yes. Luxury brands will introduce new innovations to their cars before the non luxury brands. The service factor and warranty too.

iskch- great point. If it weren't for luxury brands my $22k Mazda wouldn't have HIDs, rainsensing wipers and LED tail lamps.

VW really knows how to "finish" a car. On the contrary why does VW continually step on Audis feet?

Karl, right now good used Infiniti G35s are available for prices down near the cost of basic Camry or Accord. I choose the fun used G35 over the new driving appliance.

In the past choosing the non-luxury brand saved money in initial purchase, sales tax, insurance, replacement parts, and regular gasoline vs. premium. The value equation for the lesser brand is messed up if it costs the same as the premium brand or the premium brand lacks significantly better permanent mechanical parts like the drivetrain.

"Do Luxury Brands Still Make Sense?"

I think they do if the buyer wants the prestige that comes with the badge, is picky about interior quality, and wants the premium service......and can afford the car without living beyond their means.

For the average person who simply wants a safe, comfortable and/or fun-to-drive car that is well-equipped and has good or at least decent build quality, luxury cars are not worth it.
At this point in my life I wouldn't splurge money on a BMW when a Mazda 3 GT will serve me just fine!

they dont make sense from a practical perspective at all. That said some folks will always be willing to pay for the latest features and exclusivity. In recent years non luxury cars have added more and more features that have made luxury cars somewhat redundant but that hasn't slowed luxury sales because Americans are constantly striving to separate themselves from "lesser" folks. A car is one way to do that.

A lot of people are talking about service but that is overrated. First of all you can get good service from a good dealer of almost any brand. Secondly, today's cars are so reliable and need maintenance so infrequently that you should not be in the dealer too often. I dont know that I am willing to pay an extra $100 per month just so I get to sit in a nicer waiting room and sip lattes while I get an oil change. Personally, I would stay away from a luxury car because of service. We all know luxury brands charge a good 50% more for service than regular brands even though there is no good reason for the additional cost. The rip you off when you buy the car and get you every time you come in for service. I'm not into $120 oil changes regardless of how nice the service advisor may be.

Luxury is not (just) about features as it goes much deeper than that. There are so many variables to be considered. I can put leather, HIDs, LEDs and a big high end stereo in a Honda Fit but that doesnt make it a luxury car. So yes, luxury cars do make sense.

A Hyundai Genesis V8 may have a lot of the same features found in a Mercedes S Class but the S Class just emits a feeling of craftsmanship that few cars can match. Substance makes a HUGE difference.

I agree EXACTLY with Hondacura4!

Luxury cars do make sense for those who can afford them and want/desire them. They are not cars to buy because of need or necessity.
If one is buying because they NEED a car, luxury cars are not worth it.

VW's are great... they may not look sophisticated from the outside, but when you are inside and driving it, it feels no different from any German luxury brand. For some people, this will more than suffice. Others have to have a luxury badge and nothing else matters.

"There are so many variables to be considered. I can put leather, HIDs, LEDs and a big high end stereo in a Honda Fit but that doesnt make it a luxury car. "

Actually it would be a luxury car. Remember the RSX? It was a civic with more features. The TSX is an Accord with more features as is the TL. Luxury cars are about more features, more refinement and better dealer service. To say you could add leather, sound deadening, power and technology to car X and it still wouldnt be a luxury car is a little silly. All cars are a collection of metal, plastic and leather. If you add more good stuff to a lesser car it becomes a luxury car in terms of how it rewards its owner. The only thing you can't improve is the badge. The genesis is a luxury car it just lacks the prestige of a luxury badge.

I like it when non-luxury automakers implement luxury items. It makes the luxury makers work that much harder to differentiate themselves.

To answer your question, I think luxury cars make sense, but right now they haven't grown enough to make themselves marketable. Also, I think there's a huge difference between luxury and premium.

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Now, as to "premium":
Some companies are considered premium because they've held high standards of production throughout their life. Bentley and RR are obvious examples, but BMW and Mercedes are other brands to consider. People pay "BMW prices" because their products are made with "BMW quality" and through heritage. The same was once said of Mercedes (but that's a debate for another time).
I don't consider Lexus and Acura to be premium or luxury brands. I see them more as brands that offer the next generation of the Camry/Accord now. So if you want a 2012 Accord now, buy a TL.

They still make sense but there are times when a car comes around that brings all of the luxury brand aspects to the table for a much lower price. I was always a Audi or BMW buyer. When shopping for a new wagon I checked the A6 Avant and 535xi wagon but then I came across the VW Passat 3.6 4motion. Those higher priced Germans (10-15k more) made no sense. The VW had all of the features (nav, power liftgate, adaptive bi-xenons, adaptive cruise etc...) of the more expensive brand. The only aspect that they don't bring to the table is service. But then again I've been treated badly at some Audi service shops to....