Thursday May 29 2014

What is luxury?

Mustafa: Jude, how do you define luxury?

Jude: Ah, luxury to me is many things. I think it is something that appeals to me, it is nice to look at.

Paul: To me, luxury is like a double edged sword because what maybe luxurious to me may not be for someone else. But strictly speaking, luxury gives you the feel good factor. It has got an element of comfort, convenience as well. Everything is at your tips. Largely speaking, luxury is associated with trend. What one thinks is the best in providing comfort or that feel good factor. But what may be considered luxurious today may not be luxurious tomorrow.

Mustafa: I totally agree with that but three things come up. On the personal side of luxury, I define what luxury is. The other two elements defining luxury are society and brands. What you see as luxury in Kampala may not be luxury in South Sudan or in Nairobi.

Jude: Yeah, why would some folks use an Ipsum as a taxi yet to other people this car is luxurious.

Mustafa: Then there is brand loyalty. I was discussing with Jude here that I can park here a Mercedes Benz190E, a 1989 car! Someone else will come with his Toyota Brevis, a 2003 model, but society’s perception of luxury will still go to Mercedes.

Jude: Regardless of the ages of both cars.

Mustafa: In terms of definition of luxury, the Brevis is miles ahead of the 190E.

Paul: The other issue I also see in there is that luxury is strongly associated with a price tag. What is considered as luxurious is sometimes up there in pricing. If you park your 190 and someone parks the Brevis (pronounces it as Brevi).

Mustafa: is the word Brevi or Brevis? Is the S silent just like in Progrès?

Paul: Yes

Mustafa: Okay, I get it.

Paul: Is your 190 going to have a higher price tag?

Mustafa: But Paul, how much do you think a 2010 Mercedes Benz ML would cost on the open market?

Paul: Above Shs200m.

Mustafa: How much is a 2010 Land Cruiser?

Paul: Perhaps, the same price.

Mustafa: But I can tell you that chances are that the Land Cruiser may even cost more. When you put both of them out there, which one will exude luxury? To me, luxury plays an important part around the brand. There is this human expectation that whatever form this vehicle comes in be it a bus, a van, a truck, regardless, the three pointed star exudes luxury. Even when in actual sense it doesn’t, people will associate with the symbol. And that is a big problem because people get misguided. Someone ends up with some ram shackled car because of the symbol.

Jude: Like I was telling you about some people importing the old S-Class that was once used at Nile hotel, now Kampala Serena. (The W126 was in production between 1979-1992).

Mustafa: But I think when someone imports such a car it is for vintage purposes and nothing to do with luxury! (laughs out).

Jude: Maybe they couldn’t afford it then but can afford it now.

Paul: Such a car is supposed to be expensive to get now, you may have to look for it in a museum somewhere!

Jude: Paul, you are hitting below the belt, be careful. (continuous laughter). For me, if someone parks any of the top three brands (BMW, Mercedes and Audi), you will be given more respect than others. Maybe you can add Lexus. The top three dominate, however old any of them that you could be driving could be.

Paul: Jude, you see, the aura associated with those brands, the amount of work put in to give themselves a cutting edge is phenomenal. If it is air conditioning, it has to be the best. Air purifiers! The only thing they have not managed to stick in there is a Jacuzzi for crying out loud! (laughter). They have done a lot of work, they have developed all sorts of leather interiors. Walnut finishing, anything that would suggest ostentation, comfort and class. If you put Toyota and Lexus together, people are going to think Lexus ticks all the boxes.

Mustafa: That is quite correct. You must give them credit for that. The pedigree around these brands, is that they have a rich history. You cannot beat that. But today, other manufacturers are catching up. For instance if I got a Jaguar.

Paul: (interrupts), a Kia.

Mustafa: No, Kia is not…

Jude: Mustafa, at the ongoing Beijing autoshow, some people were giving nice reviews about the 2015 Hyundai Genesis and how it is supposedly going to penetrate the top three’s market in the luxury sedan segment.

Mustafa: The German brands have built this strong room amongst themselves so you cannot get in. Their rich history also helps them. They also charge premium. It is through these premiums that they can manage to develop all these technologies that you are talking about. But their market has been shrinking. The people who buy the S-Class today are becoming fewer and fewer. The market is there but today if I have an S-Class and I know oh, there is a Jaguar and it is cheaper. The latest XJ under the Tata brand is beautiful. Have you seen it? There is Lexus LS among many other options. If you look at them objectively, you will find that they are tooth and nail… what is the phrase?

Jude: Neck to neck

Paul: Head-to-head

Mustafa: The one thing the Germans have over others is the brand which may account for about 80 per cent to edge out the rivals. The 20 per cent is the technology, the safety and all that.

Jude: But there are some good innovations that you may find in the Hyundai Genesis that you may not get from the top three but because of society’s perception, the Genesis loses out.

Mustafa: That is why in the used car market if you are looking for luxury, they will advise you to go for Lexus or the Genesis. Why? Because when the German cars start ageing and they fail, they may not be fixed properly. The Genesis is marketed as a no-brand luxury car, they don’t put the Hyundai sign on it. So if you have the Genesis, a Mercedes, Audi and a 7 series BMW, what would you choose if you are the kind of person who wants upmarket stuff? What do you think I will look at?

Jude: Probably Mercedes.

Mustafa: Naturally, I will look at the Germans. It goes without saying.

Jude: I think what the South Koreans are trying to do is what the Japanese did with Lexus. If you look at the Lexus background, it was all about penetrating the western market. They asked themselves what is it that these Europeans are doing that we cannot do?

Paul: So many years ago, one of the adverts Lexus had involving champagne glasses was about balancing but it showed how different in class a Lexus was or is. It was splendid.

Mustafa: I was reading recently about someone who did a review of that first Lexus LS and he was saying how it has held-up so well. What Lexus did was to provide what the Germans can provide but at a cheaper cost. Because half of the money you pay for the Mercedes or 80 per cent is just that three pointed sign.

Paul: But today, that is different, Lexus is positioning itself as a luxurious brand to compete with the Germans. Sometimes their pricing is even higher.

Mustafa: The truth is, the Germans are worried. You cannot deny that. Of course there are some flagship segments where they are market leaders.

Paul: Almost every head of state uses a Mercedes Benz.

Mustafa: There are other segments where they have introduced the CLA, B-Class, R-Class. GL to take on the Land Cruiser.

Jude: The GLA is Mercedes’ answer to Audi’s Q3 and BMW’s X1.