Price, size, fancy features no longer define luxury cars

LOS ANGELES -- An avalanche of ads featuring luxury cars decked with huge red bows, and some without, all send the same message: Give your loved one a fancy car for the holidays.

And enough people do it that December is usually a strong sales month.

But you begin to wonder what defines a "luxury" car when you see that one Lexus red-bow TV ad features the CT 200h hatchback, which starts at a tick less than $30,000. You can buy well-equipped versions of such mainstream sedans as Ford Fusion, Honda Accord, Toyota Camry for $30,000 to $35,000.

What makes one vehicle "luxury" and another one not? USA TODAY invited four luxury-car executives — representing Asian, European and Detroit makers with widely varying approaches to luxury selling — to a roundtable session exploring the new definition of luxury.

They agree that traditional measures, though still in the mix, matter less. But they disagree on what has taken the place of the old standards that once clearly separated luxury cars from family buggies.

"The definition of luxury changed. Luxury was size, space, comfort, presence," says Don Butler, marketing manager for General Motors' Cadillac brand. Now, luxury is defined more by "the feel of the vehicle," he says.

"The difference is not just price," says Brian Smith, vice president in charge of marketing for Toyota's Lexus brand. He says luxury has to do with the overall experience — the car, the dealer, the reputation of the brand, the satisfaction of owning a certain brand.

"Emotion" distinguishes a luxury car from a mainstreamer, insists Ludwig Willisch, president of BMW of North America.

Time saved and hassles reduced are the essence of a luxury appeal, says Steve Shannon, vice president of marketing for Hyundai Motor America.

To some extent, the definitions of luxury recall the famous description of pornography: You know it when you see it.

The four executives met here to answer questions from the USA TODAY auto team about the challenges of selling luxury cars at a time when $20,000 economy cars offer heated front and rear seats, automatic parallel parking, voice controls and "connectivity" that links you to seemingly everything but the planet Mars.

The four brands at the table cover a wide range within the luxury segment, from established to newcomer, triumphant to struggling, domestic to import.

They face different hurdles as they work their way back from a ruinous recession in 2009. Those differences help shape their views.

•Cadillac is a well-established name, but the image was tarnished by watered-down models, such as the infamous Chevrolet Cavalier knockoff called Cimarron in the 1980s.

"I would be foolish to say the Cimarron wasn't a mistake. It was. But having said that, we will never shortchange the product again," Butler vows.

GM continues to spend robustly on vehicles and marketing to keep Cadillac's luxury image intact. A new, larger XTS sedan was unveiled at the auto show here and will go on sale in the spring. A compact ATS sedan joins Caddy's limited lineup next year to broaden the product array.

Like all luxury makes, it's also fending off increasingly feature-packed models from more mainstream brand names. That includes an unexpected internal rivalry with GM's Buick brand, fast moving toward a luxury image.