Hyper-premiumisation: Technology Trends

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Hyper-premiumisation encourages premium vehicles to display their loftier positioning over mass-market models through numerous aspects of their design.

Technology Trends

Listed below are the key technology trends impacting the hyper-premiumisation theme, as identified by GlobalData.

Interiors

Interiors are the parts that vehicle owners interact with every time they drive and have seen significant development in recent years as manufacturers try to outdo each other for on-board technology, material quality and design. Inside the cabin, however, there is more room for manufacturers to differentiate themselves from rivals. This can manifest in new on-board technologies, bold interior design, or through the materials used to trim seats and touch surfaces.

Mercedes, as a premium manufacturer, employs many techniques and technologies to make its interiors attractive to buyers. With the release of the W205-generation C-Class in 2014, the company pushed cabin design to another level.

On the technology front, manufacturers are finding new ways to bolster the user experience. A recent development deployed by Mercedes in its latest MBUX infotainment system and due to be deployed by Hyundai’s Genesis in 2021 is augmented reality navigation. This system outputs the image from a front-facing camera to the car’s infotainment screen. From there, it augments the image with arrows and directions for the driver to follow which, in theory, should make navigation easier to follow.

Flexible platforms and architectures

As more vehicles’ platforms, drivetrains and engines become shared with other models across a manufacturer’s range, benefits can be felt for different models across a range of different price points. Lesser models benefit from a trickle down of platform technology from upscale models, while premium vehicles become more affordable thanks to economies of scale cost savings by sharing parts and platforms with mass-market vehicles.

For example, Volkswagen builds a wide range of models on its Modularer Querbaukasten  (MQB) platform – a suite of modular components that can be adapted to a number of different vehicles. At the one end of the spectrum sits the Skoda Octavia – an affordable family hatchback which features a reasonably attractive interior trimmed predominantly in soft-touch black plastic.

At the top of Volkswagen’s compact premium model lineup sits the Audi A3. Again, this car offers the same MQB chassis and uses the same engines and transmissions as lesser models in the VW group range but fits the most premium parts to the cabin to justify its price premium. As a result, much greater use of leather and suede trim is found throughout, along with a more elegant dashboard design and even more metallic elements to truly establish the Audi A3 as a premium option.

Using the same platform and engines across a range of niches and price points, with the cabin being the main area of differentiation has benefits for buyers at both ends of the market. For those stepping into premium models such as the A3, they get an upmarket vehicle at a lower price because sharing platform and engine costs across multiple models lowers their on-cost to the OEM. For those at the mass market end looking at Skoda or SEAT models, for example, they get a better mass-market product thanks to the additional development the platform has so it can underpin models from higher up in the range too.

Technology sub-brands

An option open to automakers to add more premiumisation to their lineup is to introduce a sub-brand. These sit as a secondary differentiator within a brand to mark out a model as having unique performance, drivetrain or on-board technology packages, thus justifying a higher price than standard models.

The most common sub-brands are high-performance divisions. Examples include Mercedes’ AMG division, BMW’s M division and Audi’s RS line, but can also include sub-brands such as Fiat’s Abarth or Toyota’s GR models.

By marking these models out as a distinct brand from their regular counterparts, it becomes easier to justify the price premium they carry. It also allows the performance sub-brand to develop brand recognition and reputation separately from the main lineup.

Manufacturers have used sub-brands to mark out models with new technologies, especially when talking about electrified models. Examples include BMW’s i range, which sits separately to the main lineup to mark it out as the clearly electrified arm of BMW.

Occasionally, sub-brands are also set up to mark out a vehicle as being especially luxuriously equipped. Examples include Ford’s Vignale line, GMC’s Denali trim and Mercedes’ Maybach sub-brands.

Skateboard architectures

Electric vehicles (EVs) are built differently to combustion-powered models because they don’t need to accommodate an engine or transmission. An EV’s layout generally means the batteries and motors can be incorporated into a low-profile chassis that runs between the two axles. This layout is sometimes called a skateboard due to its simplified design.

This means companies designing EVs have enormous flexibility in what body they choose to fit on top of this skateboard because one chassis type can form the basis of almost any vehicle type, be it a sedan, a van or even a pickup truck. In addition, by having one simple EV skateboard platform, niche builders can relatively easily develop dramatic body styles that can be dropped onto existing chassis with minimal engineering cost.

This is an edited extract from the Hyper-premiumization – Thematic Research report produced by GlobalData Thematic Research.

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