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High End Luxury Cars
24723 messages, Last post on Jan 28, 2013 at 6:55 PM
You are in the Sedans Forum.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.
#4748 of 24723 by sv7887
Apr 19, 2004 (12:53 pm)
Hi All,I'll just add my two cents to the discussion..I'd agree with Merc that MB and BMW are not in serious trouble. I'll qualify that with a "Yet" however. You can't ignore the bad press both automakers are having right now. Reliability is still a major part of the decision making process. IF left unaddressed, this is going to start to hurt their bottom line. Anyone have profit/loss data on Toyota, DCX, and BMW?
You could say what Reliability to is MB, Styling to Lexus. It's a problem no doubt. Merc is correct in his assessment of the Lexus product line. The GS, SC, IS, and LX are older designs. The latest generation of Lexus designs are encouraging however. I like the streamlined look of both the new LS and RX. The GS concept still does nothing for me..It's highly subjective isn't it?
I'd like to see Lexus develop an AMG style line, no more of this half hearted L-Tuned nonsense. The Company has been around since 1990, so they've had long enough to get their act together. Also, they ought to turn the SC back into a real sports car, not some retiree cruiser. Ditto for the IS and GS lines.
A sidebar..Which of these cars have the best exhaust system? As a big fan of V-8 engines, I always enjoy a satisfying roar with the turn of the key..The LS430 disappoints in this respect, the old 92 LS I have makes more of a roar when started..
SV
#4749 of 24723 by maxhonda99
Apr 19, 2004 (1:29 pm)
sv7887,Well, Toyota definately has the best bottom line. I don't think anyone can argue that. They have a huge cash pile they are sitting on.
"The GS, SC, IS, and LX are older designs."
The SC is not too old, just looks old! It's as old as the current LS. The LX is a older design that is still selling extremely well.
Every carmaker has it's successful product lines, the small percentage of product lines that make up a huge proportion of overall sales. Lexus has the ES, RX, and GX making up about 60% of it's sales. BMW has the 3-series making up 45-50% of it's total sales volume. Mercedes has the C-class and E-class making up about 50% of total Mercedes sales.
"A sidebar..Which of these cars have the best exhaust system?" Are you just talking Lexus?
I'll tell you what, the recent Infiniti's sound great, the G35 Coupe and FX35/45.
#4750 of 24723 by jrock65
Apr 19, 2004 (3:37 pm)
""Merc. Just curious...What are the Sales expectations for the GS this year??? How many do they expect to sell?"I would say 12K to 15K units."
The GS sold about 2000 units during the first quarter, and that pace is decreasing, which is understandable w/ the new one coming in March '05. I figure they sell about 7000 GS's this year.
Currently, the E sells about 4000 per month, and the 5 sells about 3500 per month.
By fall of 2005, I predict (sales per month):
E: 3,400
5: 2,800
M: 2,200
GS: 1,800
RL: 1,600
#4751 of 24723 merc 1 by anthonyp
Apr 19, 2004 (8:03 pm)
If you are thinking of a new car, regardless of make, and you are going to buy one-not lease- try to anticipate the new technology.. If you guess right, you will have a couple of extra years of use without a large depreciation. I luckily baught my wife a small suv that turned out to be a great hit, and when she then went to trade for the clk it really had held it`s value, more than any car I have ever seen.. I enjoy your posts Tony#4752 of 24723 merc1 by oac
Apr 19, 2004 (8:55 pm)
I do not wish to engage you in a long diatribe that you'd like (and probably enjoy). Won't MB want to be in Toyota/Lexus' shoes in either or ALL of the following:#1 in sales
#1 in market capitalization
#1 in cash on hand
#1 in reliability (5+ years in a row according to JDP)
Enviable positions to be by a relatively young brand, isn't it ?
And just so that we are clear, I did not suggest, nor imply, that MB and BMW are DEAD or dying, all I have suggested (unless I am misquoted) is that the SIGNS of a decline are stating to show, just like designman also surmised. I provided my justifications as follows: For MB, US sales position have changed from #1 to almost #4. And for BMW, two new designs and not much uplift in sales compared to expectations.
#4753 of 24723 michael_mattox by merc1
Apr 20, 2004 (1:25 am)
See how maxhonda99 and sv7887 got the point about models and sales trends, but no.... You and oac keep harping about sales of MB and BMW declining yet when I dare point out that Lexus has the same problem with one of their duds you all post the same thing over and over like in post #4752 because that's all you know, even though it doesn't pertain to the conversation.Sales decline is everything when it comes to MB and BMW and yet the sole reason has to be reliability, but when Lexus (with their industry leading reliability), can't move certain models their have to be other reasons; old product, specialty cars that don't sell much etc. etc., but these same reasons couldn't possibly apply to MBs and BMW's in their 3rd model year (7-Series). Unbelievable, but typical. Golly Gee production of the 2000 LS400 was slowed down intentionally, but the 2004 C-Class can't possibly be in a decline of the same sort due to a face lifted 2005 model coming. Makes sense to me.
"And for BMW, two new designs and not much uplift in sales compared to expectations."
Oh, but before the car sold less than before, but now they had a small uplift. What a difference a sales chart makes when you actually look at it. Tell me what BMW's sales expectations for the 5 and 7-Series? You do have this information this right to make that statement right?
What are the sales expectations for the GS this year? As many as they can sell, seeing as though the car is a dead duck. Like a company really will release or boast about a sales goal for the last year of production. That is so ridiculous, but BMW passed their stated sales goals for the 7-Series back in 2002 the car is now a failure now because it hasn't sold at the same level 3 model years down the road. That is so silly.
If you're asking this question about the GS' sales goals this year to imply that they are selling up to expectations or even decently you're only fooling yourself. Nobody wants to sell 69 units of any model in this class. Since the SC430 is dropping and is a specialty car it doesn't matter. Let MB show a sales drop with the SL and see how this board reacts. Crisis for days.
"Sales SC and 7 series...To use your own arguments since the SC doesn't sell much anyway...does it really matter if their sales drop a little...Not much lost there. If a High profile car like the 7 series loses sales..Well...That is an important development..Don't you think?"
Total confusion. Where did I ever say a sales drop wasn't anything significant because a particular car is a "specialty car" or because the particular car doesn't sell much anyway? That is your excuse not mine. Every mainstream luxury car maker has an ideal sales figure for every car they produce. The SC430 only costs 60K, not a whole lot of money for that class of car, seeing as though all of its European competitors cost more, yet it is a "specialty" car and shouldn't sell much. BMW, Mercedes, Jaguar don't see their "specialty" 2-seaters/2-door models the same way. Don't you realize that with such a small market niche that the SC430 competes in visibility is very important and every sale counts just like it does with a high-end sedan. Do you think Lexus won't address the SC430's situation with a facelift and possibly a SC300 V6 model only to not worry about loosing a few sales. I know you don't believe that. Of course they want to sell more!!!
The 7-Series has lost 707 sales YTD and it is a development, but the GS has lost way more and that is no news. See a double standard here? You could argue that the GS is much older and on its way out and people are waiting for the new model etc, but you can't see this as the case for say the SLK, which is also dropping like a rock this year in anticipation of the new model. Is the SLK excused for being a specialty car?
Before the host says it I'm done with this round. When other Lexi fans see the point I know I'm not exactly crazy, but keep preaching about how reliable the slow selling GS and IS are.
I would have like to have seen the posts if this board were around in 1993 when Mercedes only sold about 60K cars for the whole year in the U.S., yet the E-Class now moves about that many units per year all by itself. Edmunds' Town Hall server would have been choked with posts about MB's demise.
anthonyp,
Good points and advice...thanks. I could never lease, I drive way too many miles per year for that.
M
#4754 of 24723 oac by merc1
Apr 20, 2004 (2:09 am)
"For MB, US sales position have changed from #1 to almost #4."They managed to get to number 1 for one year, what in 1999 or 1998??? They did this on the back of the ML SUV which back then was a big deal for Mercedes-Benz because they never sold one here before. One year at #1 because of SUV and they are supposed to maintain that momemtum and compete with a company that makes fifty percent of their sales on SUVs and the other 50 percent with much cheaper cars, mainly a 35K fwd model. Right.
Dont' get me wrong here. I congratulate Lexus for their market success in the SUV area, the Germans are still clearly behind here. Notice how I don't even dare suggest that this is Lexus' fault.
But how come if MB has increased sales each year since 1993 (from 60K to over 200K) in this country, with higher prices than everyone else, a 4.7 percent drop in 2004 is seen as the beginning of the end? If anything with such a high priced lineup MB's market share grew in proportion to what could be reasonably expected of a brand with much higher priced cars, in other words they're going to always get a smaller share of the sales pie. I wonder how many over 50K cars (still the bulk of their models) Mercedes has to sell compared to Lexus tearing up the under 50K segment with the ES and RX for sales to be a wash. What am I thinking money is no object and sales are sales everyone can afford to buy-upwards.
I wonder why Ferrari doesn't outsell Porsche or why Maybach doesn't outsell Bentley? Price certainly couldn't have anything to do with this.
M
#4755 of 24723 MB Prices High because by footie
Apr 20, 2004 (4:10 am)
Merc1If MB built better cars and built cars better, they could sell them for less money and be more profitable. It's the way smart companies in competitive marketplaces win.
MB prices are higher than Lexus (and Infiniti and others) because their cars cost more to produce, sell and service. Their production processes aren't as efficient as Toyota's nor their ability to manage their supply chain as good.
They have a broad product line with low volumes in many of the lines. The engineering costs are higher, the production volumes lower, the learning curves slow to deliver improvements. This results in the higher defect levels that impact production and the resulting poorer dependability, reliability, serviceability and availability impact their costs and customers.
* Higher defects during production raise direct costs
* Higher defects during warranty raise costs
* Higher defects requires more marketing money to prop up the decade old superiority image, now no longer true
Mercedes doesn't sell their cars at today's prices because they want to, they do it because they have to. Their entire marketing campaign is designed to make you think you are getting something you aren't. "Like no other" is right, better said as "No two are the same".
Their profitability is lower ( and the Chrysler-Jeep drain no help ). Their R&D is tighter and narrower and this makes them more dependent on suppliers for new technology, which is widely available to others. The technical edge is gone and often bleeding edge, not leading edge.
I don't think that MB is 'dying' but they are in serious trouble for the first time here in the U.S.
They haven't adapted to the competition yet and it shows.
#4756 of 24723 merc1 by ljflx
Apr 20, 2004 (7:15 am)
I'll just give you my view of what OAC and others, including myself are saying.I think any hint of a decline of the German marquees is exaggerated into the companies are going out of business. I haven't read where anyone has said that or even hinted at it. But in the financial community you are always looking for the tip of the iceberg as an indicator of things to come. I think all that people see here are a lot of tips of the icebergs. The business model built in the past may not be so sustainable going forward - at least not at the success level of the past. Look at all the clues out there. The bulletproof cars built are gone as is the mystique that both brands build bullet proof cars. The improvement in quality is slowest among all car brands. The resale values are falling faster (in percentage terms) than any lux brand out there. That means the upfront prices as new cars can't hold much longer and there are plenty of indications of that. Heck - I just saw a $77k S430 lease deal advertised at only $100 a month more than my $65k LS430 and it wasn't specific to any individual car. I saw $77k BMW deals advertised at the same rate as my $65k LS430. Lux brand dealers don't have come-ons - at least not in my experience. Now throw in a fierce competitor like Toyota who is well capitalized, very profitable (record earnings just made) with a rare and very strong Balance Sheet for a manufacturer. They build cars very efficiently and may have a big market lead in the next gen car engines (for the US market at least). Add in a rapidly recovering Nissan (in the hands of a European which is ironic)and a Honda that has always been strong and you see alot of competitive warning signs out there. On top of that throw in a Chrysler that has to be rebuilt and will utilize a lot of resources and may uiltimately drag down the famous lux brand name. I just read stories on the Hemi (a car I like by the way except the rear from the side has an old Eldorado look to me) and couldn't miss the cross jabs and some comparisons to the E-class let alone the instances of part sharing. Remember Lexus was built on top of Toyota whereas Chrysler is being rebuilt under MB. Big difference in perception to the market. Finally you have the strength of the Euro to contend with, the first signs of falling sales (we'll see if it's real or a false alarm in the coming months) and the media coverage of CR's car quality - whether you accept that or not - it's there.
Anyway my point of all this is that there is not one tip of the iceberg out there but many. This has nothing to do with enthusiastic cars bult today and everything to do with the business of selling them and continuing their domination. Will the business stay healthy enough and capitalized strongly enough to maintain that edge or not. We're not talking about the next 2-3 years here but the 5-10 years after that period. Personally I don't think so and I think BMW is stretching themselves too far these days. But that's just my business opinion. Sometimes tip of the icebergs are overstated and sometimes they are not. As I said before it will be interesting to see this play out. But the long and short of all this is that even when you hit the iceberg you don't have to sink. Look at IBM.
By the weay - I never made it to the auto show. Buiness issues on Friday (the day I really wanted to go), a more complex tax return than I expected and family functions took away all opportunitities. I wanted to see that futuristic Audi sports car and also drive the Jeep Grand Cherokee on the indoor hill but I'm afraid you can't always get what you want.
#4757 of 24723 Merc: by michael_mattox
Apr 20, 2004 (8:31 am)
I am sorry I just couldn't get through your very long messages, But I did see my name mentioned so rather then respond directly to whatever you said I would like to make what I believe is a constructive observation.Back in the days when Mercedes was the unchallenged king and body styles remained the same for years and frankly Mercedes cared less about pretty and more about functional.
Back in those days Mercedes advertising centered on safety and safety innovations....They were the leader and probably still are..But now the marketing objective has changed to the beauty of the sheet metal and the cars prestege (which once was understood and didn't need to be spoken by the company)
Back in those days when I couldn't afford a Mercedes I always wanted one...
P.S. Merc. did I read somewhere, that you are a tech for mercedes is that correct?(Just curious)
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