New-Vehicle Debuts: Smaller and Pricier

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Detroit Free Press

The Los Angeles Auto Show is a smorgasbord of new vehicles that includes a wave of smaller more expensive cars aimed at people seeking a luxury package, according to analysts attending the show.

Take a closer look at automaker presentations marketed to sell “entry-level luxury”.

The smorgasbord of new vehicles debuting this week included a wave of smaller, but quite expensive crossovers and cars targeted at people seeking luxury in smaller packages.

Marketing experts call it “entry-level luxury,” a jargony term that encompasses a diverse range of designs and utility. The segment’s growth — more than 10% this year over 2012 — reflects an optimism that an ample number of consumers are doing well enough to spend more than $40,000 on new cars even as U.S. personal income is growing only slightly — up 0.5% in September, the latest monthly report issued by the government.

“Automakers are … able to focus beyond popular segments and address more specific markets,” said Lacey Plache, chief economist at Edmunds.com. “We’re also seeing evidence of a push toward more niche offerings like the Porsche Macan and the redesigned Mini Cooper.”

Mark Reuss, president of General Motors North America, said the L.A. show “is a reflection of the health of the industry. Five years ago, it was pretty dark.”

Porsche is adding a fifth vehicle — the Macan compact crossover that will start at just under $50,000 and run to about $111,000 fully loaded. Porsche started taking orders last week for the crossover that goes on sale in May, said Detlev von Platen, head of Porsche North America.

Lincoln also is expanding its lineup with the MKC compact crossover.

“Lincoln remains in dire need of fresh product, and the compact luxury crossover market is hotter than ever,” said analyst Karl Brauer of Kelley Blue Book.

Audi is revamping and expanding its line of A3 small cars from a single hatch to a sedan, hatchback, convertible and a performance S4, with options for a hybrid or diesel.

BMW has introduced a new 4 Series convertible.

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