What Is Premium Downsizing?

What Is Premium Downsizing?

If you’ve been following automotive trends lately, you’ve probably noticed an increase in the use of the term “premium downsizing.” But really… what is premium downsizing? How does it relate to cars? The short answer is that it’s an idea that car buyers of premium vehicles such as BMW or Mercedes-Benz will be willing to buy and drive smaller or less-powerful cars than they traditionally have.

Where Has This Come From?

In no uncertain terms, premium downsizing has become a trend because of the shakiness of the economy and the increase in the concern about our personal environmental effects. Car buyers could be looking to not only save more money at the dealership, but also in additional costs such as fuel.

There’s always been a belief that the size of a vehicle matters, and Americans have always felt that bigger means better. However, auto manufacturers are starting to move away from that theory and towards the idea that smaller and more sophisticated vehicles can still demand premium prices. And the people agree, as all evidence suggests that car buyers are willing to pay for these new compacts because, despite their smaller size, they still offer everything a larger vehicle would.

As a matter of fact, automotive industry leaders believe that premium downsizing isn’t something to go away anytime soon. The common belief is that owners are going to feel just the same way about the new generation of small luxury vehicles as they did about previous generation models. If car shoppers feel that they won’t be sacrificing all of the features that larger vehicles offer by purchasing a smaller model, then you could see more people joining in.

For the most part, it’s the young, first-time car buyers that are looking at more compact or downsized vehicles, as they look to buy a vehicle that will last while saving money. It may be more important to see if those who are used to the luxury SUVs or larger models will make the move and trade in for smaller cars. Luxury owners want comfort, strong fuel economy numbers, and the latest technology. Until now, the luxury market has really never made an impact on the compact market. We’ll see what type of effect premium downsizing will have.

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