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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.- Your Hosts are Kirstie@Edmunds & Karen@Edmunds
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.
#5021 of 24723 by maxhonda99
May 17, 2004 (7:39 am)
"The average msrp for a Benz is higher than it is for Lexus. I don't see how it could be any simpler than that."Basically you're saying Lexus sells more cars because they are cheaper overall, correct?
Do you have factual data to backup your claims? for example do you have factual data that says the LS430 outsells the S-class due to price? If that is the reason, why didn't the LS430 outsell the more expensive S-class by a huge margin in 2002 & 2003? After all, as you say the LS430 sells because it's cheaper. How about the GS300/430? Shouldn't that be outselling the E-class? The SC430 outselling the SL?
And yet again, I gave you 2 examples in the Lexus and Mercedes line that go head to head where your claim of lower prices selling more Lexus' simply don't hold water.
"If you clearly don't see where the pricing structure of MB would inhibit overall sales then forget everything I've said because you'll never get it."
You can try and theorize how lower prices help increase sales volume at Lexus which I basically disproved with the C vs ES and ML vs. RX.
And people could theorize that with the much larger product range that Mercedes has(which BTW, would mean MB should be reaching more customers), Lexus is simply selling more cars that Mercedes because they are actually building cars that more people want. Otherwise, I can't quite understand why a similary priced RX330 outsells the similarly priced ML350 by over a 3 to 1 margin. Or how a lone ES330 outsells the entire C-class range(from the under $30K hatchback to the C320).
#5022 of 24723 by syswei
May 17, 2004 (8:11 am)
Consistent with the data showing Asian manufacturers gaining share of sales in Europe, Automotive News had this on worldwide sales: "As a group, automakers based in Asia sold 24.7 million cars and trucks last year, up 9.0 percent. Automakers based in Europe sold 19.5 million vehicles, down 1.0 percent. And manufacturers based in North America sold 15.3 million vehicles globally, down 1.5 percent."#5023 of 24723 Merc: by michael_mattox
May 17, 2004 (8:14 am)
People who buy S class and LS 430s can pretty much afford what they wantThe $20,000 difference between a LS 430 Ultra and a well equiped S class would have no importance if the LS was not equal or better in quality and/or dependability.
I would think it is impressive how long the Star has keep S Class sales up....
As to styling, I would say that if LS copied the MB styling and is now outselling them because MB discontinued that style...WELL...Maybe MB should go back to a style that was so good it was worth copying...ON THE OTHER HAND
... you could say that even with the S class new very beautiful styling and LS with the old not so beautiful styling ...WHY is S class declining in sales while LS is going up?
#5024 of 24723 Michael by ljflx
May 17, 2004 (10:08 am)
I think merc1's arguments are simple monetary demographics. The cheaper something is the more buyers it can attract. It's far too logical an assumption to argue with as far as I'm concerned. There are simply more people that can reach the price point of an LS430 than can reach that of an S-class - particularly the $85K S-500. Thus it should sell more based on those broad paramaters. There are many other variables of course that do enter into it.Unlike BMW I've not seen MB subsidize leases. I said before I could have had a 7 for the price of an LS430 lease even though the cars were more than $10k apart. I've never seen such a deal on an S-430 nor was I the least bit interested in the 7 despite the lease discount. Nevertheless I pay attention to the pricing in this segment because its predictive of the future. What it tells me is LS430 prices will rise or there will simply be added options that will increase price whereas 7-series prices are probably going nowhere. The S - not sure probably staying as is or increasing slightly. Personally I think it has held up well - far better than the much newer 7.
With all that said - there are definitely a substantial core of buyers for both cars (plus any other car in this segment) that can afford either (or again any other car here). That's why Lexus has easily moved the average price into the $62-66k area. It used to be $55-59K prior to 2001. On the other hand MB had to drop the price of the S-class in 2000 or they would have had their lunch eaten. They would never have done that if price was no object.
But there is no question that the LS430 has moved way upstream from 1990. I've never heard merc1 deny that or even hint that is not the case. Heck I know two LS430 ultra owners that can own a dozen Maybachs at the drop of a hat. I don't think that type of buyer was in the Lexus demographics in the early 90's though.
#5025 of 24723 ljflx by oac
May 17, 2004 (11:02 am)
At the $70K price point, I do think *many* (not all) buyers can truly afford either an S or an LS. Prestige would favor the MB, reliability and build quality would favor the LS. So the age-old question: IS the LS selling more becos it is cheaper than the S despite the *styling* advantage of the S over the LS ??? Styling is, IMHO, the least bit of a reason to buy a $70K car, there is a lot more than mere aestethics at this price point. Prestige may actually rank way up on the list. Methinks that Lexus has actually risen almost to the same level of MB such that people buying LS believe that owning a Lexus gives them a lofty status about equal to owning an MB. Listen to your colleagues, friends and acquaintances compare your Lexus with an MB. They often have equal admiration for both cars. These people count way more than the beffudled eyes and opinions of a few individuals here who don't even own any of these name plates... In my neighborhood of solid upper-middle class folks, there are cars of all shades of luxury, but are mostly either Lexus (LS) or BMW (3- and 5-series), with a couple of MBs (mostly E and one CLK). Proves nothing, but that people that can afford MBs often choose other brands and may well account for the loss of sales in MBs, besides its higher prices....#5026 of 24723 merc1 by syswei
May 17, 2004 (11:12 am)
Some months back we got into an extended discussion about higher prices vs higher prestige and their effects on MB sales. Basically I gave up on discussing it after we couldn’t see eye to eye. Maybe I’m bored or something, but here I go again.It is an economic truism that, EVERYTHING ELSE BEING EQUAL, a higher priced product will sell fewer units. However, in the case of MB vs Lexus, everything else is manifestly NOT equal. In particular, we all agree that MB has higher prestige than Lexus, based in part on 114 years of heritage. This is something that Lexus just can’t do much about.
Two products, A and B, that are identical to each other in all aspects of desirability should sell in the same quantities if priced the same. Two products, X and Y, that are identical in all aspects of desirability EXCEPT for prestige, will NOT sell in identical quantities if priced the same. The higher prestige product, let’s say X, will sell more units, if X is priced the same as Y. It follows that X could be priced at some level HIGHER than Y and still sell the same number of units as Y, so long as the price differential is in line with the perceived extra value accorded the additional prestige.
Put another way, suppose there were a Ferrari and a Kia that were identically desirable in all respects except for the brand/prestige. If the Ferrari were priced only 1% higher than the Kia, do you still think the lower-priced car would sell more units? I don’t. I think the Ferrari badge is worth something between 10% and 50% more than the Kia badge.
Back to MB and Lexus. You keep pointing out that we shouldn’t compare MB units to Lexus units because MB has higher prices in some lines. What I’m saying is that there is an offset to this, namely the higher prestige that goes with the MB nameplate. MB really SHOULD be able to charge higher prices, because of its higher prestige. Prestige has a value that people are willing to pay for. Now, pricing would be a more legitimate handicap if they were trying to OVERcharge for it, but we don’t know that. We don’t really know exactly how much the prestige of an S is worth in comparison to an LS.
#5027 of 24723 just a thought by seminole_kev
May 17, 2004 (11:56 am)
any of you guys ever watch "Groundhog Day" with Bill Murray?
#5028 of 24723 oac/syswei by ljflx
May 17, 2004 (12:06 pm)
OAC - I think the prestige factor is less and less important and I think its narrower than ever anyway. When I cross- shopped I had to move to the S-500 because the S-430 was unimpressive and it cost more to begin with.syswei - I think Lexus pretty much hits their mark in every car except the GS and IS. I like the styling of the GS in general but it falls short of the E by a decent margin. This is a crucial line-up car and Lexus has not given it its proper investment. Unlike the LS this car needs to meet the targets of a wide audience from someone who wants to put a ton of sportclad metal and tuning gear on it to to someone who keeps it sterile. Cut into the marketshare of the E and 5 here and you really will hurt MB and BMW. But Lexus fails badly in that arena because of its singular approach (whereas MB and BMW excel) but I have no doubt that Lexus is about to change that reality and perception like night and day. Plus I think the hybrids will be a major differentiating factor in the future. Combine that existing lack of investment thought with the fact the GS hasn't even been refreshed in recent memory and you have a key line-up car that falls short. But as I said I think that's about to change.
#5029 of 24723 ljflx by syswei
May 17, 2004 (12:32 pm)
I think merc1 suggested that one of the GS's problems is that it is being marketed, to some extent, as 'sporty', and that this might have been a mistake on Lexus' part. I see his point. Even the original, in 1992, was marketed as a 'sport sedan'...even though I believe it was slower, 0-60, than the LS of the time. I think I remember a marketing tagline that went "something wicked this way comes" (or was that in 1998?) The E other hand I perceive as being marketed more as a mainstream luxury car, with the AMG variant taking on the sporting role.Anyway I agree with you that the new GS offers some hope, especially once it goes hybrid. Styling wise, however, I still...based on pictures only...don't see it as especially pretty.
#5030 of 24723 syswei by ljflx
May 17, 2004 (12:38 pm)
Merc1 is dead on here. They should have just gone after the E crowd rather than try to take on both brands with a car that was too narrow in approach.I will have to see the new GS in person. The pix didn't do much for me but my cousin said the car drew tremendous attention at the NY show and he loved it. Plus the auto rags are giving it a lot of high marks. Let's see.
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