Last post on Jan 28, 2013 at 6:55 PM
You are in the Sedans
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.
Mar 26, 2002 (4:54 pm)
Of course Lexus got BMW's attention. That's why for 1993 they brought out the 740 for 735 money (which by the way was 400E money). The 7-series was considerably more car than the 400E, yet the pricing was similar. This proves that MB's pricing was out of control. Pricing for the 5-series has grown little to it's present version, along with the present E-Class.
There is no doubt that MB in the late 80s and early 90s had HUGE profit margins on their cars. For 1994, MB reduced the pricing for their E-Class by 10K, and the cars were essentially the same.
You're right, the X5 is not an off-road vehicle, but essentially an any-road vehicle. I still don't understand the point of the X5 other than to generate profits. The Cayenne is going to totally tarnish Porsche's image, plus will be a huge failure once the hype dies down. Serves them right if you ask me.
Mar 26, 2002 (6:21 pm)
Yep the X5 was to just generate profits. But it is fun to drive and works in the snow. It's still a debate if the Cayenne is going to tarnish the Porsche image but I have a feeling it will sell if they price it right.
I'm looking forward to a new Audi S8. I will probably not buy another S class. I didn't have any problems with my previous ones but the news do not seem to offer that vault like substance. If Audi produces a technology leading S8 with a new budy style and maintain the AWD, I'll put it my garage instead of that 745il.
I don't know if Lexus got BMW's attention when it comes to pricing. BMW is selling perfomance which they have no problems telling the world that Lexus can't match them. The 740 is BMW's answer to the S, and they maintained about the same distance in price below the S with the 740 as they did with the 735. Not to mention they stayed about the same $$ above Lexus. In fact in 1993 the LS was still considered "near luxury" and were not an honest threat to MB or BMW. The LS was bearly 3 yrs old.
In the service area, Lexus made them both take notice. Both MB and BMW have improved and offers full maintenance warranties where Lexus doesn't anymore.
Lexus has done a great job I just wish they would work on a fresh idea for the exterior of the LS.
While our Lexus is very luxurious it just doesn't excite me like our European cars.
Mar 26, 2002 (7:58 pm)
If I remember right the LS400 was originally viewed as competition to the E-420/430. In fact on the 95 questionaire as a follow-up to a purchase or lease they asked you what other cars you considered. You didn't have to put E-430 as they already had put it in for you. All you had to do was put an x and list any other cars you also may have looked at. It was the 98 model that started the push to compete with the S and the 2001 that really accelerated it further.
In the bull market of the 90's many people would have been able to afford $100k S-500's. MB had to do something with price, not so much because it was getting too high but because of the big economic difference it had to cars that were winning such high reliability scores and renewing virtually every customer on a new car purchase. If Lexus isn't there MB does not cut prices. The price/value today vs. 1990 is all due to competition. Does anyone really think otherwise?
Mar 26, 2002 (9:38 pm)
The 400E was a pipe dream in 1990. When the LS400/Q45 was introduced, the 300E had a 177hp/3 liter compared to a 250hp/4 liter V8 of the LS400 for about 10K less. The LS400 offered the horsepower and luxury of a 560SEL for much less than an E-CLass. Kind of makes you wonder what the MB executives were thinking in 1990!
bernard: BMW's didn't have the same pricing problem as MB did when the Japanese duo came out. A BMW 525i was still reasonably priced compared to it's eqivalent MB. The 5-series was priced similar to the smaller and less powerful 190E 2.6. Lexus and Infiniti did have an impact on the product, V8s became the norm for the 5 and 7 series not long after lexus entered the picture. Don't know if that was directly because of Lexus or not, but it does seem like a interesting coincidence.
#1481 of 24723 bernard1
Mar 26, 2002 (11:03 pm)
You're missing the point about profits. What you've just stated about the Carrera GT is common sense, orders = car. My point is that Japanese companies wouldn't even bother with a car like the Carrera GT. The Japanese wouldn't see the point of a car like a M5 or Carrera GT, though they have the ability to produce such cars. I would doubt that about the profit margin on the M5, because a loaded 540i is only 10K less, the M5's engine is way more expensive to build than the 540i's. I would think they make more money on a loaded 530i or 525i.
Yep the 400E was hugely expensive, the 500E (probably my favorite 4-door Benz of all time) was $80K at the time. The 400E was just a stopgap effort to compete with the LS400 of the time. The W124 chassis was an expensive one, and you could tell....even GM admitted that is was the most solid car built during it's day. These cars are still reguarded by many Benz fans as the best "E" Mercedes ever made. I can't take a definite stance on that opinion, though I think the current W210 E is not as well made structurally or in some of the cabin materials.
Yes Lexus did force the value issue, MB lowered prices in 1994 for the first time in over 100+ years of carmaking. Monumental change indeed. BMW has had performance as their isolation from Lexus, many still don't cross shop the two for this very reason. Mercedes' cars philosphy wise sit in the middle of the two, the most difficult place to be.
Mar 27, 2002 (6:32 am)
The 500E was an incredible car, wasn't it engineered by Porsche? That car was the ultimate sleeper.
It wasn't so much that BMW chose their isolation from lexus in that Lexus chose MB as their benchmark.
I might have to agree with you on the margins of the M5 compared to a loaded 540i, that 5 liter is full of expensive technology but I'm sure that engine doesn't cost BMW 10K more to produce.
Mar 27, 2002 (9:16 am)
Yes it was an incredible car! Yep it was built/tested/tweaked by Porsche. Automobile called it the best car in the world "by which we will judge all automobiles". If I didn't need a "new" car this would be the used Benz of choice, a 1994 model (E500) that is.
True about Lexus and their benchmark target, that's another way of putting it. But you have to admit that BMW's performance angle has spared them direct comparisions with Lexus until the GS400 came along.
Not really sure about the M5 compared to the other 5-series cars. I suspect that type of info isn't available on the web anywhere.
Mar 27, 2002 (1:28 pm)
Maybe I'm missing the point but from what I remember the Japanesse makes a little low sales volume sports car by Acura, Yes? So, they also make cars that are performace based while full well knowing the volume of sales for that car will be low. In 1970 the first Z car hit the US shores, and that was also a fun performance oriented car and it came at a time when no one would have thought Japan would have produced a sports car. They took the risk. Europeans make certain cars for perfomance sake, what II'm saying is hat today it's all about profit. Since I have perfomance based cars I'm glad they do. I use Porsche as my gauge as they make more $$ per auto then any other manufacturer and they are not always ahead of their competition.
I think you may have missed my point about the GT. Sure orders= cars, but rarely has a car company stated that they would not build a car unless they had confirmed orders to insure a profit. The Cayenne, Porsche's new love was designed, engineered and ready to be built before the first order was taken. Most manufactures do the same. I'm just pointing out that while the Europeans believe in perfomance based auto's, profit are now the prime motavator, having the fastest car, etc. etc, is icing on the cake.
Actually a fully loaded 540i 6 sp is 12K and change less than a fully loaded M5 and when you actually purchase it, the difference is even more as you can get reasonable discounts on the 540i. Additionally there is not 12K difference in price on the engine. Something else to consider, very few people buy a fully loaded 540 simply because they don't want some of the extras. Those extras bring profit, the M5 comes with most everything standard, so there is a little extra built in.
You are correct about BMW not having to deal head to head with Lexus until the GS400 came along . Can't speak of the pricing of the 525 vs 190 as I've never owned or even price one of those. Lexus may have had some influence on the V8's at BMW, I don't know, but I know that the 7 series came out as their MB fighter but was deemed under powered.
Mar 27, 2002 (1:55 pm)
I think you guys are both right. Sure, every manufacturer is out to make profits, but BMW, Porsche, Audi, Acura, etc. also cater to the consumer by bringing out low volume performance cars. They could aways sell something else to make more profit like bringing the Audi A3 over instead of the RS6(which they are bringing over only 850 units). On the flipside, if manufacturers didn't care about profits then they would be giving cars away. Its not all about profits, its also about giving the consumer what they want.
Mar 27, 2002 (5:16 pm)
Your're right. I sure wish Porsche would listen and give a little more hp for the $$.
For now, I will attempt to patiently wait for Audi's new S8 and hopefully will not be disappointed when it's released.
What do you guys think of BMW's leap in technology and how Lexus, Audi, MB will follow up?