Here's a question for you, especially for those visiting the Toronto auto show: Is the 2012 Ford Focus almost a luxury car, or at the very least almost a premium model? Some versions might be.
The new Focus, sold as a hatchback and a sedan, starts at $15,999 for the base four-door S, but if you go for a really loaded Focus Titanium five-door hatchback, the sticker is $30,859, including freight and $4,310 of options.
To compare, a front-drive Audi A3, with freight but no options lists, for $34,295. Audi is obviously a premium brand, which means a fully dressed Focus is pretty close in price to a starter A3.
Or how about Lexus? The CT 200h hybrid is $32,900 with freight and no options. Again, the Focus Titanium is bumping up against the least expensive Lexus in Canada.
One question a lot of buyers should be asking: Do I want a Focus with every bell and whistle, from rear parking sensors to rain-sensing wipers, from 18-inch aluminum wheels to heated leather-trimmed seats, from a fancy Sony sound system to the trendy interior styling package and a navigation system, too? Or do I want a less well equipped A3 or CT 200h? In other words, what's the brand worth, regardless of the make and model?
You might be asking if power is an issue here. The Focus Titanium has a direct-injection, 160-horsepower four-cylinder engine mated to a six-speed auto-shift transmission. A nice package.
The A3 has a turbocharged four, also with direct injection, that spins up 200 hp and it's teamed to a six-speed manual gearbox which is not quite as sophisticated as the Ford tranny. The Lexus is a really fuel efficient hybrid with 134 net horsepower. Hybrid buyers here equate performance with fuel economy and on that score the CT 200h tops these other two.
Ford is trying to cover a massive swath of the marketplace with the Focus. Pure entry buyers have the basic model waiting for them at around $16,000 plus freight. At the other end is that fancy Focus Titanium, the one with near-luxury aspirations.
A horde of commentators are wondering if buyers in Canada and the United States are poised and ready to pay the price for a feature-packed Focus with good fuel economy, outstanding crash test scores and entertaining ride and handling? If the Focus is nibbling price-wise at the lower end of the premium market, what are the implications for upmarket brands such as Audi, as well as mainstream ones like Ford?
I can tell you this: Ford expects to make money on its small cars - the Focus and the Fiesta. To do so, Ford wants many buyers to start acting like Europeans, who are accustomed to paying a decent buck for a little ride. And there is some evidence to suggest this strategy may work. That is, the new Fiesta's average transaction price in Canada is nearly $20,000.
One factor helping Ford at this very moment is the price of oil, now spiking as a result of all the turmoil in the Middle East. Ford, in fact, has based its product planning on the assumption that oil will sell for at least $150 a barrel by the middle of this decade, if not sooner.
When fuel prices start jumping, buyers have shown they will quickly move to smaller, more fuel-efficient ones - provided they offer the right amenities. That assumption is at the heart of Ford's product planning.
"Expectations have increased" for small cars, said Derrick Kuzak, head of Ford's global product development, in a recent interview in Detroit.
Clearly the econobox is not dead; Ford has a sub-$16,000 Focus. However, Ford and other auto makers - led by BMW's Mini brand - are banking on buyers showing a willingness to pay for engineering, performance, innovation, design and content.
That development has implications for auto makers all around the world - big, mainstream ones like Ford and premium ones like Lexus and Audi.