Why a Badge is More Than a Logo: The Hidden Forces Driving Luxury Car Buying

Chinese EV maker BYD (Build Your Dreams) has shot into automotive history with its Yangwang U9 Xtreme, shattering the record for a lap around Nürburgring, Germany, by an electric vehicle. The sub-seven-minute lap-time indicates that newcomers are ready to upset the performance game. The Nio ET9, also a Chinese product, can hold its own with features and technology. So, should the old guard be wary?

Global and national trends indicate that despite disruptors, a majority of consumers continue to bank on brands with well-established reputations. In 2024, BMW sat at the top of the global leaderboard, having sold more than 2.2 million cars. In India, Mercedes-Benz rules the roost in the luxury automobile space. But what is it that spells the difference, if it isn’t performance, luxury, or technology?

“Brands are built on purpose and intention. In the case of cars, the company behind the badge doesn’t just hope people will connect; it orchestrates the experience—from the look and feel of each glossy advertisement to the test drive,” explains Dheeraj Renganath, co-founder of Magic Circle, a boutique agency that customises communication to create brand experiences for consumers on behalf of clients, including automobile. “Crafting a perception of luxury isn’t just about designing a beautiful product. It’s also about creating an entire world that feels special, rare, and a cut above the rest.”

According to Paris-based automotive historian, author, and journalist Gautam Sen, the critical element in favour of the legacy luxury automobile brands is status. “For most Indian buyers, the sense of prestige associated with owning a luxury vehicle outweighs other considerations. Comfort, space, and opulence are important, but they usually come after the desire for social recognition. The key differentiator lies in the brand’s image and legacy,” he explains.

Avik Chattopadhyay, an automotive design expert, chairperson of the XLRI Centre for Automobile Design & Management, and founder of INDEA (Indian School for Design of Automobiles), takes a different view. He feels that brands that have clarity about what their differentiator will be, has less to do with legacy. “Take Lotus, for instance," says Chattopadhyay, referring to the British multinational automotive manufacturer of luxury sports cars and electric vehicles. "Terrific legacy, brilliant pedigree, and amazing history, but does anyone miss Lotus today?” he asks, driving his point home as the automotive brand doesn’t ring a bell anymore.

On the contrary, a brand like Mercedes-Benz has held on to its brand ethos; its three-pointed star is seen as a symbol of the pinnacle of German engineering and luxury. Similarly, BMW has always offered dynamic performance—driving pleasure over everything else. That is not to say that Mercedez-Benz doesn't offer dynamic brilliance or that BMWs don’t offer marvellous engineering and luxury! At the heart of Audi’s brand experience lies an offer of progress through technology, symbolised by the quattro all-wheel-drive system.

Although Chattopadhyay stresses sticking to a specific brand ethos and Sen explains the importance of legacy as the key reasons why consumers tend to favour established brands, the truth perhaps is a mix of the two. After all, the brand ethos is also built through repetition of specific attributes—in this case, engineering excellence, dynamic performance, or just opulence and flamboyance over time. This, in turn, becomes the legacy of the brand itself. 

Renganath says, “When it comes to luxury purchases, many consumers gravitate towards legacy brands, even if a new brand offers the latest features or jaw-dropping designs. It’s the magnetic force of history and heritage at work that makes the brand what it is.”

He further explains that while the rational part of the brain will want to tick off certain functional boxes, the brand connect is usually deeper: “There’s a deeper connection at play. Legacy brands carry stories, legends, and rituals built over generations. Owning such a brand feels like joining an exclusive club, and trusting in a tradition that’s stood the test of time. It’s the intangible allure, aura, legacy and the emotional resonance that tips the scale.”

That's why, then, some brands which try to punch above their weight mostly fail, both in India and globally. So much so that Japanese manufacturers like Toyota, Honda, or Nissan created alternative brands—like Lexus, Acura, and Infiniti—which wouldn’t be associated with the main brands. Korean auto giant Hyundai, too, has tried the same with Genesis. It works, but in some markets. 

Eventually, the consumer wants a specific badge in their garage because it represents certain values and ideals. The badge tells a story, and nine out of ten times, the customer buys into that story. Until newcomers start building their own stories which represent specific values and ideals, the old order has little to worry about. 

Don’t believe us? Just dig a little into the history of Lamborghini. People don’t buy into the Lamborghini brand simply because they sell fast cars that look flamboyant. No. Lamborghini’s pull is that of the upstart challenger who has upset the establishment. And that is the story of why badges matter.