$30,000 Will Be New Luxury Car Sweet Spot

German luxury will soon rub elbows with the upper crust of mainstream vehicle buyers, opening new doors on both sides of the market.

“They could eat into the mass market,” IHS Automotive analyst Rebecca Lindland said to Automotive News. “A $30,000 Mercedes — and they will cap the car at $35,000 — is an incredibly competitive price point, even against the higher-end Honda Accord.”

To some, the lower price could raise questions about whether or not Mercedes risks sullying its name. It’s not something Mercedes USA CEO Steve Cannon is worried about.

“The only way to dilute the brand — just ask Jaguar about the X-Type — is to do it wrong. That is why we held Stuttgart off for many years and said we will not bring the [first-generation] A and B class because those vehicles did not fit the Mercedes-Benz brand. They were small, boxy and utilitarian.”

What, then, counts as doing it “right?” Audi, BMW and Mercedes all ultimately agree that front-wheel drive compact cars are the answer. While that might be enough to miff many luxury buyers, there are some intersting products on the way.

First, Mercedes will offer its CLA, which AutoGuide.com previewed at an event ahead of the Detroit Auto Show this week. It mixes a 2.0-liter turbocharged four cylinder with a front-wheel drive layout to offer a package starting in the low $30,000 range. An all-wheel drive CLA 45 AMG model is expected later, but its higher price and a thirstier engine will keep it from disturbing downmarket sales.

SEE ALSO: 2014 Mercedes CLA Revealed With Premium Style, Budget Price

Meanwhile, BMW announced that it will sell a less expensive version of the 3 Series: the 320i. The less-expensive sedan could serve to lure younger buyers with a $33,445 starting MSRP — thousands less than the current 328i. That won’t be the end-all for BMW’s lower price plan either.

Just like Mercedes, the brand will begin building front-wheel drive cars in the near future. Starting with the Active Tourer concept it brought to the 2012 Paris Motor Show, BMW will build a host of front-wheel drive cars set to take over the current 1 Series name. The platform will save costs by also underpinning all of MINI’s new models.

Meanwhile, Audi will introduce the new A3 which will be sold exclusively as a sedan, ditching the less popular hatchback. It will also bring its smaller Q3 crossover next year. The A3 is expected to slot in just under the $30,000 mark while the Q3 will sell just above it.

[Source: Automotive News]

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