It would only be going backwards IF it was replacing a exsisting model.
If its a new budget model, its exactly that, a new BUDGET model.

But I agree, I wouldnt confuse the market with a lesser product.
Mercedes Benz have done somethin identical. They used to have the C Class, as the base model, Then they bought out a smaller cheaper model, the A class, now they have apx 3 or 4 models UNDER thje C class. They have devalued what was a expensive car, exclusive car brand. Now everyone can get into a Mecedes (albeit a cheap small crappy looking very small car) but the exclusiveness has gone). That also , was a mistake and sends a confusing message.
I agree, you want to be known for quality, upmarket, but affordable, within reach products, not inexpensive, cheaper looking products that resemble toys. I think its a mistake. I think Stern will get alot of unwanted flak/questions/worry from consumers over this direction.