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Technology is No Longer Key for Luxury Brands

Mainstream brands quick to copy, warns Mercedes’ U.S. CEO.

by on Jan.18, 2010

The tristar logo grabs attention, but E-Class technology is less important among brands.

Why is one car worth $15,000 and another $150,000?

Traditionally, the differentiators included such luxury touches as leather, chrome and, of course, more powerful engines.  But these days, technology has become a hallmark of high-line brands.

Manufacturers like Mercedes-Benz have counted on costly systems, such as the automated collision avoidance system on the new E-Class, to draw affluent customers in and justify premium prices.  But the technology gap is closing.

When the first anti-lock brake systems debuted, in the late 1980s, they carried a price tag of close to $2,000, and it took a decade for the technology to migrate into the mainstream.  While the latest and greatest new systems may be equally expensive, at least initially, the prices quickly fall, these days, and adoption by mass-market brands can begin in as little as a year.

Tech Talk!

“You used to be able to create for yourself a niche for at least a few years,” Ernst Lieb, CEO of Mercedes-Benz US, told during an interview.  “Now, it’s down to a matter of months.”