What's a name worth? $42K?

After my Audi A3 review, I got the following letter from a reader:

"I saw an A3 on the street the other day, and liked what I saw. Went to the Audi site to do a “build” and was flabbergasted at the cost. How on earth does a car like this fully equipped at $42,125 get any traction the in the marketplace?

"I do a lot of research before buying a new car every 3 years or so. Why does this car cost so much more than a new Subaru WRX for example? Pound for pound it appears the A3 has got to be the worst value around!"

I've had this same thought about a lot of cars that I've driven lately. Take the Hyundai Genesis for example (review to be published on Monday!). Here we have a car that's probably worth an easy $50K. It comes standard with leather seats, iPod integration, Bluetooth, heated seats, a 290-horsepower V-6, etc. It's very attractive and incredibly comfortable. Yet the price for all this is $33K. And if you want to completely deck it out with all the whistles and bells like navigation and premium sound system, you're still only looking at $40K. Want the extra horsepower that comes with a V-8? You're still only going to pay $42K.

Yet luxury brands like Audi, Mercedes, BMW and Lexus will double that price for exactly the same thing. And in some cases, like I reported in the A3 story, you won't be getting better quality. It's worse!

So, to answer the reader's question: How does the vehicle gain traction in the marketplace? It's all about the name.