Premium cars go compact at Paris motor show

Fashion companies long ago realised they could make a lot of money from selling top brand-name goods to a wider public, and now, with models like the BMW X1, Audi's A1, or the Mini crossover, the car industry is trying to do the same.

'It's called portfolio expansion,' said Christoph Stuermer, an analyst with research firm Global Insight.

'They (car-makers) are realising that the value of a premium brand can be applied to a whole range of things.'

BMW, the German manufacturer long associated with solid and stylish upmarket cars, chose the show in Paris to unveil its X1 premium compact crossover, which is likely to hit the salesrooms some time next year.

It resembles a compact sporting estate, but with the deep body sides of a real off-road vehicle, and is pitched at customers who want a vehicle that can tackle rush hour traffic as well as weekends roughing it in the country.

From the same BMW group comes the four-by-four Mini Crossover, a pumped-up version of the perennially popular Mini, which is also displayed at the show here and likely to go on sale by 2010.

Another German car group with a reputation for safety and style, Audi, has revealed its potential answer to the Mini with the A1, which among its many innovations will let you run the car's infotainment system with your smart phone.
Mercedes-Benz is also rumoured to be working on a baby four-wheel-drive vehicle.

The Paris show is this year awash with new smaller cars designed to attract drivers concerned by high fuel prices, pollution and the ongoing global financial crisis.

But people who will buy compact premium cars such as the BMW X1 or the Audi A1, which fit in perfectly with the downsizing zeitgeist, will be not primarily motivated by the environment, said Stuermer of Global Insight.

'People who buy premium vehicles would automatically expect that they have the very latest technology' and thus they assume these cars will either be hybrids or low on fuel consumption, he said.

These are not people who had big gas-guzzling cars and who now want to be seen to be making an effort for the environment, he said.

'They are people with good salaries, not huge salaries but good ones. They want the social prestige of being able to afford a good brand,' he told AFP.

At the BMW stand at the Paris car show, which this year was overshadowed by economic storm clouds looming over the industry, a yellow model of the company's X1 was attracting a lot of attention.

It might be small, said BMW's Christophe Koenig, but it is very definitely 'in the premium segment of the market'.

In all, 362 models from 25 countries are represented at the Mondial de Paris, a car carnival that takes place every second year and that attracted 1.4 million people on its last outing in 2006.

This year, the stands were showing 90 new models and a raft of new green technologies.

The Paris motor show opened Thursday for the press and industry reps. It opened its doors to the public on Saturday until October 19.