GENEVA — European luxury brands such as BMW, Mercedes-Benz and Aston Martin used last week"s Geneva auto show to make a splash at the top of the luxury market dominated by VW Group"s sprawling yet integrated empire of upscale brands.
At times, it got ugly, even if the cars were anything but.
Their problem is not just competing against Audi, Porsche, Bentley or Lamborghini, but the combined firepower of all four.
"The VW Group has a huge advantage over other European luxury automakers in terms of the breadth of its luxury portfolio," said Ian Fletcher, principal automotive analyst at IHS Markit. "They have an unsurpassed ability to share key technologies, which allows these brands to enter spaces that they may not have had the resources to do alone."
For example, Bentley, the largest global ultraluxury brand, used Porsche"s V-6 plug-in hybrid technology to launch its first electrified model: the Bentayga Hybrid SUV.
Porsche, meanwhile, showed a crossover concept based on its Mission E electric sedan, which arrives next year on an EV platform developed with Audi. That platform is also expected to be shared with Bentley.
"As electrification becomes more popular, we"re going to be faster and more ready than any competitor," Bentley"s new CEO, Adrian Hallmark, told Automotive News. "That"s the advantage of being able to access technologies from which we can pick and choose."
Audi used the show to unveil its high-tech A6 sedan, built on the Audi-developed next-generation MLB platform that will be picked up by other VW Group brands. "If they would need it, no problem. I don"t mind that. We are a big family. We trust each other," Audi chief Rupert Stadler told Automotive News.
VW Group CEO Matthias Mueller saw only upsides to this sharing across brands. "We earn more money, we are faster and we have more power than our competition," he said. "The customer gets a technology that is well proved for good money. What could be better?"
At Geneva, BMW, Daimler, Aston Martin and Jaguar Land Rover tried to counter the VW Group"s brand width in an effort to further expand into the profitable upper luxury segment.
BMW launched the Concept M8 Gran Coupe, a muscular yet svelte four-door version of the forthcoming 8-series coupe and convertible that will push pricing up to Porsche Panamera and even Bentley Continental GT levels. "Our strategy will focus on the luxury segment, where there are margins to be earned," BMW CEO Harald Krueger told shareholders last year at BMW"s annual meeting.
Mercedes took a big step in expanding its growing AMG luxury sports brand by launching the stand-alone AMG GT 4-Door Coupe, another Panamera rival.
"They saw that the Panamera Turbo was selling like hotcakes so they decided to do something against it, and now BMW is doing the same," said Christoph Stuermer, global lead analyst at PwC Autofacts. Mercedes is also expanding Maybach as an ultraluxury trim level on the S class after it failed to ignite as a stand-alone brand.
At Land Rover"s new, vastly larger stand at Geneva, the brand experimented with an unprecedented leap into Bentley pricing territory with the Range Rover SV Coupe, a low-volume two-door SUV selling for £240,000 ($333,000) in its home U.K. market.
Aston Martin"s splash at Geneva was perhaps the most dramatic of the lot. It commandeered the vacant stand traditionally used by General Motors for its former Opel brand to show off the electric Lagonda Vision Concept, a radical yet elegant limo that launched Lagonda as a stand-alone electric brand designed to take on Bentley and Rolls-Royce.
Aston CEO Andy Palmer asserted the advantages of being independent when competing against VW Group. "I"m sure I don"t have the cost that they have, I"m sure it doesn"t take me years and years to get approval and I"m sure the cars don"t all look the same," he said.
That last comment was a shot at VW Group"s weak spot in its luxury platform strategy: design compromises.
"You amortize the whole thing much, much quicker but there are geometric constraints. Why, for example, does the Bentley Bentayga look odd to my eye?" said Max Szwaj (SVAY), Aston"s chief technical officer. The Bentayga and the Lamborghini Urus SUV are the two highest-profile users of VW"s MLB Evo platform, which is also shared with the Audi Q7 and the redesigned Porsche Cayenne and VW Touareg.
BMW"s Rolls-Royce has developed its own platform for this very reason. It craves exclusivity.
"You don"t want a camouflaged [Audi] Q7 in that segment. You want to have a true Rolls-Royce," CEO Torsten Mueller-Oetvoes said last year of the Cullinan, the brand"s first SUV and the second to use the new platform after the Phantom launched last year. The Cullinan launches in May.
Pity the designer who has to work with a shared platform at this level, argued Rolls-Royce chief designer Giles Taylor. "You have to live with an A-pillar to front-wheel association that most car aficionados could spot is from a donor company. We don"t have that," he said on the sidelines of the show.
VW"s platform sharing is not especially cost-effective at this end of the market.
"It gets very complex to produce a lot of product variety and complexity is very expensive," PwC"s Stuermer said. "You can say the Porsche Mission E electric platform will be amortized by a Bentley with 1,000 units or a Bugatti with 10 units, but it doesn"t help. When you"re talking about these small production runs, complexity costs eat up your sharing advantage."
Still, partnership does cut costs and Toyota argued that its pairing with BMW to develop a sports car brings much of the same benefits as developing cars with in-house brands.
"VW is doing exactly the same. What"s the problem?" said Didier Leroy, Toyota"s chief competitive officer, at the launch of the GR Supra Racing Concept. "We are not Ferrari. If you"re not selling cars for $250,000-350,000, tell me: What car company can produce a few thousand cars a year and generate a profit for that?"