The brandwagen grinds to a halt

Is the long hegemony of German prestige car marques drawing to an end? From studying the turbo-charged sales figures of Mercedes, BMW and Audi, you would not think so. Careful examination of the rear-view mirror, however, reveals a more disquieting picture.

Part of the longstanding appeal of German driving machines is that they work properly. Not only are they technically advanced – as in Audi’s proud boast of ‘Vorsprung durch technik’ – but they simply don’t break down. Add (traditionally conservative) design flair and you have much of the recipe for charging a price premium over the competition.

Unfortunately, the mechanical reliability part of the equation is less and less in evidence. Mercedes must have been mortified to find itself classed as the second-least reliable marque in a comprehensive survey conducted by the German equivalent of the AA. Meanwhile, Audi’s iconic TT sports car has been branded the UK’s most unreliable car. The same Consumer Association survey also found fault with BMW and Mercedes.

Why is this happening? One possible answer is that German car manufacturers are stretching their prestige brands too far, too fast in an effort to respond to global competition. Where, not so long ago, there were a few basic ranges, such as the BMW 3-, 5- and 7-series, the market is now more sophisticated and seemingly requires a model in every niche, from debutant car, to sports car and sports utility vehicle. This diversification can, and has, built market share, but it also stretches resources, and courts the kind of PR disaster encountered by Mercedes when it first tested its debutant A-series model. The overall brand is only as strong as its weakest link – which is often at the volume end.

An interesting exception to the rule is Porsche, which has jealously guarded its niche status (and its reputation for reliability) while continuing to make thumping profits. Even so, the introduction of a cheaper, VW-powered SUV (VW collaboration has never been a marketing trump card for Porsche in the past) and a prospective four-door ‘family’ sports car to sit alongside the conventional model line-up shows that Porsche is not immune to the pressures – and dangers – experienced by its prestige peers.

But the real test for German marques will be the emergence of competition that out-Teutons the Teutons. So far, outside the issue of reliability, there is little evidence of this happening. Certainly not from Fiat (Alfa Romeo through to Ferrari) or even Ford’s Premier Auto Group (Jaguar through to Land Rover and Aston Martin). Japan offers a more interesting challenge. Honda’s ambitions are written in its advertising campaigns (such as the award-winning Cog). More pertinently, Toyota is making serious incursions into traditional VW territory. But its upmarket Lexus marque will require a major retune before it presents a serious challenge to the Germans.

Still, that’s no reason for complacency. The gap with the competition is definitely closing.

News Analysis, page 17

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