How BMW markets the 1 series in America is really what is important. Like Osnabrueck said, there is certainly an image that is associated with BMW, although I doubt everyone shares the exact same image. Obviously the high regard of German engineering plays heavily in their favor. Brand image is hugely important, just look at this forum! Are german cars good? Of course, but it's not like they're so far ahead of the competition that no one can catch up. They just play to a certain market, and do that rather well. It's hard for a new brand to establish itself amongst such powerful players. VW is trying hard to cash in on its german engineering/heritage with its lastest Golf GTI adds. Of course, the high price of entry is one of BMW's selling point, but the same goes for Audi and MB. If everyone can afford a BMW then that certainly hurts the appeal. Do you want to buy a 90K Oldsmobile even if it as good as an S class or 7 series? VW doesn't even sell the Phaeton in the US anymore because sales were so sluggish and that car was very well done. I'm not saying that exclusivity is the only factor in purchasing a car, but I think it plays heavily into the decision. People in America want to drive a car that not only drives good but also screams how successful they are. If BMW is really serious about expanding its lineup downmarket, especially in America, I think it would be wise to copy Japanese manufacturers and develop a whole new brand. Look how Toyota has Lexus for its luxury cars. BMW should do just the opposite and develope a low end brand or maybe expand the Mini one as it is already quite well established.