What is premium? It's all about values

Quality, strong identity and evocative power: this is what distinguishes premium brands. In the automotive sector as well

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In the beginning there was luxury. Then came "premium".

With the transformation of the desires and aspirations of "consumers" becoming more oriented towards the purchase not only of objects but also of experiences capable of embodying values and ideals, the pure economic dimension linked to the concept of "luxury" has become unsatisfactory.

As a result, the "premium" dimension was created. It is not necessarily the most expensive brands that populate the segment, but those capable of expressing a strong identity; those with a strong symbolic and emotional connotation, and those that have a highly differentiated range of products and services. It is brands that, above all, are characterized by a high qualitative standing. "Evocative quality": this could summarize the nature of premium brands.

And this applies to all commercial areas: from fashion to jewelry and, especially, in automotive.

What is premium? It's all about values
What is premium? It's all about values

There is no doubt that in the automotive sector the evolution of the so-called 'premium' segment has been the most innovative element of the market in recent years.

If, on the one hand, we have witnessed the crisis of the so-called "generalist" car brands, the growth of premium ones has instead been a constant.

To contest the scepter of this segment are undoubtedly the three major German brands: Mercedes Benz, BMW and Audi.

In reality, over the past three years, Mercedes has been crowned "queen" of the premium segment. The three-pointed Star brand closed 2019 with 2,339,562 vehicles sold (+ 1.3% on 2018), while the Munich-based BMW brand, despite a higher growth rate (+ 2%), sold 2,168,516 premium sedans and SUVs. The House of the Four Rings remains distant: last year it recorded a 1.8% increase in sales but stopped at 1,845,550 units.

However, if we consider the group data, i.e. the contribution of the other brands, the situation changes slightly. In this case, thanks to the contribution of MINI, Rolls Royce, the BMW Group holds the scepter of the first manufacturer in the premium segment.

Beyond the differences between who can claim the world crown of the high-end market leader, there are some traits in common that have been characterizing the commercial trends of premium brands for years.

One concerns the geographical breakdown of sales: despite the general slowdown in demand, China remains an important source of growth for all premium brands, but Europe is always the first market.

The second factor, of greater importance for general demand, concerns the product: today "premium" is increasingly associated with SUVs.

The brands in this segment continue to embrace the trend of raised bodies and push "generalist" brands to move towards this category.

In general, whether it is an SUV or a sedan, the design of premium cars increasingly requires close collaboration between the manufacturer of the cars and the tires, which must be capable of enhancing the performance and dynamic qualities of the cars.

Pirelli, as the world leader in this segment with over 2,000 premium homologations, has been able to anticipate this trend. In fact, one out of four premium models in the world are fitted with Pirelli rubber.

Whether it's the P Zero, Scorpion or even Cinturato range, the long P makes dedicated tires for each of the high-end manufacturers, characterized by a symbol on the shoulder that indicates their joint development: MO for Mercedes; the star for BMW; AO for Audi, to name a few.

Compared to the original tire, "marked" tires have distinctive and specific characteristics in the tread design, in the compounds or in the internal structure.

All this is made possible by a deep commitment in Research and Development which operates through a total "Open Innovation" model. In 2018, Pirelli invested 6.1% of its revenues from High Value products in Research and Development, one of the highest rates among tire manufacturers worldwide.

To make the long P the number one choice of premium car manufacturers, in addition to technological innovation, it takes the strength of a brand considered an international icon of Italian excellence. It requires a brand that is able to embody an exclusive style and to offer unique values and experiential dimensions. Pirelli is a brand that is equipped with that evocative power without which the premium segment would not exist.