High End Luxury Cars

24700 messages, Last post on Dec 01, 2009 at 12:24 PM

You are in the Sedans Forum. Your Hosts are pat & karens

What is this discussion about? Audi A8, BMW 7 Series, Jaguar XJ-Series, Lexus LS 460, Mercedes-Benz S-Class, Volkswagen Phaeton, Maserati Quattroporte, Mercedes-Benz CL-Class, Sedan

Let's try to define this forum as being limited to luxury performance vehicles where the mainstream version in a typical configuration has an MSRP of at least $60k.

A luxury vehicle with a base price of $59k qualifies because it would typically be bought with some additional equipment, bringing the MSRP over $60k.

Vehicles like the E, 5, A6, M, or GS, even if available in certain versions over $60k, don't qualify because they are cars from companies that have higher end cars in their lineups.

Outline

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#13591 of 24700 Re: Lexus vs Merc [tagman] by ljflx Jan 22, 2006 (9:58 am)
Replying to: tagman (Jan 22, 2006 9:33 am) The price advantage will continue but it will narrow just like it did in 2001. But in the p&L world Lexus unit profit is rising and MB's is falling. I'd say by the next redevelopment of the cars in 2014 or so there will be minimal or no price differences on the cars at all. It's a natural busines cycle and it gives both brands the chance to accomplish strategies to raise prices (Lexus) and cut costs (MB) and improve weaknesses on quality (MB) and car line development (Lexus). Have seen it many times in my career - this is just a different product line. On the business side there is another important thing to consider here. Many of the same people own these prestigious brands as dealerships. But the Lexus dealerships are far more profitable than the MB dealerships. There are a number of reasons for this including the much better price elasticity Lexus gives their dealers on MSRP to dealer cost. We all should know well the power of the retailer in the distribution chain of any business segment and cars are no exception. I would expect the MB dealer network to bring a lot of pressure on MB for changes in the years to come and they will use Lexus as a big wedge.
#13592 of 24700 Re: Lexus vs Merc [tagman] by ljflx Jan 22, 2006 (10:04 am)
Replying to: tagman (Jan 22, 2006 9:33 am) Tagman - The $71K LS ultra was a more expensive lease than a 75K S430 in 2001 and it was only $100-150 less a month than the S500. I priced all of these across the board in 2001 and looked close again in 2004. That battle on value was already fought and is over. As far as I am concerned the new battle is just escalating up now to an 80-85K car and a 100-110K car in this 2007 go round. I don't see the big if's that you do. Replies to this message: tagman (Jan 22, 2006 10:53 am) garyh1 (Jan 22, 2006 11:40 am) ljflx (Jan 22, 2006 11:46 am) tagman (Jan 22, 2006 1:34 pm)
#13593 of 24700 07 S by rjlaero Jan 22, 2006 (10:44 am)
I just saw the new 2007 S class in person and was quite disappointed. The body shape doesn't look any better up close than it does in person. And I'm not a big fan of these "ATM" dashboards that seem to be growing in popularity. Mercedes stays on the path of poorly stlyed cars that reek of Chrysler and Cadillac Give me the current Audi A8 all day long over any new body style S class. Replies to this message: tagman (Jan 22, 2006 10:55 am)
#13594 of 24700 Re: Lexus vs Merc [ljflx] by tagman Jan 22, 2006 (10:53 am)
Replying to: ljflx (Jan 22, 2006 10:04 am) I do agree, as it is my understanding, that the profit margins are indeed greater for the Lexus dealers themselves than for the Mercedes dealers. I was told a number of years ago that Mercedes had for some reason changed (narrowed) those margins. They had deliberately made the MSRP much closer to the dealer's invoice. My recall on this is a bit fuzzy at this moment, but it sticks in my head for some reason that there was a deliberate action by Mercedes on this. I understand your points that are well taken, but I still think that the price advantage needs to be perceived by the buyer. Even if it translates to leasing programs that favor the Lexus for high residual values and smaller depreciation payments. So, yes, as the gap might close, there would still be buyers. Heck, if the Lexus was MORE expensive there would still be buyers (enough of them? that would need to be determined IF IF IF the gap is truly closed) . . . but in my opinion, the wider the gap (less expensive the Lexus is) = more Lexus units sold. And I believe Lexus will continue to embrace that (price advantage) strategy. OMG, I need to be thinking about football! TagMan Replies to this message: garyh1 (Jan 22, 2006 11:40 am) ljflx (Jan 22, 2006 11:46 am) tagman (Jan 22, 2006 1:34 pm)
#13595 of 24700 Re: 07 S [rjlaero] by tagman Jan 22, 2006 (10:55 am)
Replying to: rjlaero (Jan 22, 2006 10:44 am) The body shape doesn't look any better up close than it does in person. ?????????????????????????????????????????????
#13596 of 24700 Re: Lexus vs Merc [tagman] by lexusguy Jan 22, 2006 (11:38 am)
Replying to: tagman (Jan 21, 2006 3:45 pm) I'm not saying that all non Lexus vehicles are shop hogs. The cars that compete specifically with the LS though, particularly the 7 and A8, are not exactly known for setting the world on fire when it comes to reliability. A friend of mine's '04 Audi A8 needed a new engine. It was in the shop for weeks. Some people are willing to accept that, I'm not. My daily car has to work, 24\7, 365. Who but the LS can say with 100% certainty that they can do that? Replies to this message: designman (Jan 22, 2006 2:23 pm) lexusguy (Jan 22, 2006 8:21 pm) tagman (Jan 22, 2006 3:30 pm) ljflx (Jan 22, 2006 3:40 pm)
#13597 of 24700 Re: Lexus vs Merc [tagman] by garyh1 Jan 22, 2006 (11:40 am)
Replying to: tagman (Jan 22, 2006 10:53 am) I was told a number of years ago that Mercedes had for some reason changed (narrowed) those margins. They had deliberately made the MSRP much closer to the dealer's invoice. My recall on this is a bit fuzzy at this moment, but it sticks in my head for some reason that there was a deliberate action by Mercedes on this. I not sure of the exact year, but I think it was somewhere between model years 1996 (when the new W210 came out) and 1998 (when they switched from the I6 to the V6). They wanted to be able to advertise it to appeal to a larger audience, and decided to cut the MSRP. I know when I bought an E in '94 there was a ton of negotiating room, but when I got my next one in '98 they were selling very close to MSRP, although the net price did not go up very much.
#13598 of 24700 Re: Lexus vs Merc [tagman] by ljflx Jan 22, 2006 (11:46 am)
Replying to: tagman (Jan 22, 2006 10:53 am) Tagman - re MB price policies - From what I know and it's first hand, it's that MB wanted to control discounting through lease subsidies and it's own discount programs. It didn't want dealers running the show on that. It's also partly a false prop up of prices and allows one to say cars are still commanding full MSRP when they are not. It did not make the dealer network happy. From a consumer standpoint it tranlstes to lease and buy at the end of the lease rather than buy upfront if you are MB shopping. Some MB buyers who leased in 2001 must have surely got some great lease end negotiated deals given the big price differences between the lease buyout and the real market prices 3 years later. Brightness exaggerates the leasing aspects too much but he is right on many of his points to a degree. Time for Football - my predictions Steelers and Panthers. Let's see. Replies to this message: tagman (Jan 22, 2006 1:34 pm)
#13599 of 24700 Re: Lexus vs Merc [ljflx] by tagman Jan 22, 2006 (1:34 pm)
Replying to: ljflx (Jan 22, 2006 11:46 am) Steelers 24 Broncos 3 . . . at the half . . . I'm a Raiders fan (which can prove challenging at times), so I HATE Denver. This is good. BTW, thanks for confirming my fuzzy memory about the MB pricing constraints. Your explanation is appreciated. TagMan
#13600 of 24700 Re: Lexus vs Merc [lexusguy] by designman Jan 22, 2006 (2:23 pm)
Replying to: lexusguy (Jan 22, 2006 11:38 am) Lexusguy, just curious. It seems you have a taste for cars with panache. If reliability wasn’t a consideration, which daily ride would you go for? By the way, I ran into a Lexus family at a party recently. The ol’ man drove an LS and mom had a GX. She was on her second tranny and it needed to be taken in again for the same symptom the first one had. She said when idling at a stop it felt like a car was tapping her rear bumper. Replies to this message: lexusguy (Jan 22, 2006 8:21 pm)