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.
#5051 of 24723 maxhonda99
May 18, 2004 (11:53 pm)
"All I have to say is your theory is obviously flawed of looking at the entire line-ups and averaging the prices. Each lineup is made up of numerous components(models) and saying the sales are higher because price is lower is B.S."
I think you're getting off track here. All I'm saying is that when you get past the C and ML Mercedes-Benz is at a price disadvantage compared to Lexus. Yes you are correct in the two examples you gave about the ML and C-Class vs the RX and IS/ES, but this isn't the whole lineup which has to factor into overall sales when they're counted up at the end of the year. You continue to ignore the other 7 models that Mercedes has, that cost more than Lexus'.
"1) The original RX300 and ML320 came out at basically the same time with similar MSRPs. And the RX300 even outsold the ML 2 to 1 to 3 to 1 margin."
Max I didn't say that price was the only reason why certain Lexi might outsell certain Mercedes'. Clearly the RX outselling the ML isn't price related. I think you know this already. You're trying to apply everything I said about pricing to each and every sales relationship between Lexus and Mercedes at every model level and I never said it applied in every case.
"Funny thing is, even when the GS300/400 was new in 1998 it was outsold by the 2 year old E-class by about a 2 to 1 margin. I don't see the cheaper price of the GS helping it outsell the GS from 1998 to current."
Same thing as in the case of the ML vs the RX, the GS wasn't what the market was looking for at the time thus the E outselling it. The GS was a tough sell anyway for other reasons, but those don't pertain to what we're talking about here. I think you know that my price theory is based on the MB's that are clearly way more more expensive than the competing Lexi, or the Benzes for which there are no Lexuses competing. My whole point is that how is MB supposed to climb to the top of the sales chart when they're charging more than anyone else in the luxury car market. This is what some believe on this board, not you necessarily.
May 18, 2004 (11:56 pm)
I don't disagree here, you've seem to get my point that MB's sell for more and cost more out the gate, at least once you pass the ML and C-Class. I never claimed that those numbers were sales weighted, only that the average MSRP is higher in most cases and much higher in a few instances.
As much as I love the E500 I don't think it is as much car as the LS430 for that price and I think most people would agree the appropiate Benz to be compared is the (again) much more expensive S-Class.
May 19, 2004 (12:06 am)
"I can't buy those numbers and this is purely from experience. There is no way the S-class sells at a $98K average. That would bean the weighted volume is toward AMG's and S600's when in fact it is way more weighted to $75-77K S430's and $83-85K S500's."
I didn't mean to imply that the average S-Class sells for 98K, but only the S-Class as a group costs way more than the LS430. Even still using your numbers for the S430 and S500, which I agree are the bulk of S-Class sales, 75-77K and 83-85K is still way above the average selling price for the LS430, which is about 60-65K. My point still stands here.
"There is also no way the E-class average is $57-58K. I fully loaded the E430 (4-matic) in 2001 and got to nearly $60K. Above that you had to custom order the car. There was a heavy weighting of inbound E-class cars in the $50-52K range which were E-320's. Most 430's were in the $56K range but represented only a fraction of the total E's. The only way your numbers work is with Enron-like accounting."
You've got to stay current. That was in 2001. The average E320 on the lot now ranges anywhere from 52-55K. The base 49K model is sometimes hard to find. The E500 starts at 57K now. Most E500s are easily 60-62K now. Things have changed since 2001 my friend. These prices are way more than the average GS300 or GS430.
#5054 of 24723 Another way of looking at Line Ups - Edmunds Comparator
May 19, 2004 (4:03 am)
Edmund's car comparator is a good tool for comparing car's features, specs and pricing.
A comversation with a local realtor made me go take a look at the market another way.
I think there is another way to look at the luxury lineup. Instead of arguing about pricing differences in traditional market segments, compare cars on the basis of similar sizes, performance, efficiency, warranty, etc. Then look to see what ones in that class cost.
This is the way the majority of non-luxury cars are done - where entry means small and midsize means midsize.
I did this an found that Lexus doesn't do well with the IS300 as a small luxury car offering, while Infiniti does. The ES is too large to be a 'small' car.
Here's my small luxury car comparo:
MB C Class YTD sales 21.3K units
BMW 3 series YTD sales 34.4K units
Infiniti G35 YTD sales 23.5K units
IS 300 YTD sales 3.5K units <--- only one in class that doen't offer AWD
Here's my midsize luxury car comparo:
MB E Class YTD 17.3K units
BMW 5 series YTD sales 14.7K units
Lexus ES 330 YTD sales 24.1K units
GS fits here too 2.5K units
Here's my large size luxury car comparo:
MB S Class YTD Sales 5.5K units
BMW 7 series YTD Sales 5.3K units
Lexus LS YTD Sales 10.5K units
This pretty much lines up cars with similar features, specs, performance and size.
I think that consumers have figured out that the traditional definitions of entry, mid and premium for the luxury market is way off the mark in terms of the value proposition.
I asked a realtor friend yesterday why she had a new Lexus 330 and not a Mercedes E. She said, "same or better features, rock solid reputation, 1/2 the lease price." So why not get a C Class. "Too small".
IMHO, the MB.s aren't class leaders in anything but high price.
May 19, 2004 (5:33 am)
Do you have a trust fund or just a very tolerant employer?
May 19, 2004 (5:35 am)
I do understand your point that a higher priced product is less affordable, limiting its audience and therefore sales. I hope you understand my point that if additional value (prestige in this case) is present to offset the higher price, then unit sales need not be lower than a lower-price, lower-prestige product.
After thinking more on this, I want to try to synthesize these 2 viewpoints. Let me draw on an analogy I made months ago. Suppose a housing developer offers two models of home, model h4, 4000 sq ft on 1 acre, and model h5, 5000 sq ft on 1.25 acres. Your point is that if h5 is priced 25% higher than h4, it will sell fewer units. I can agree with this, because the price is 1.25x, and the content is 1.25x; therefore, affordability will limit sales of h5 relative to h4. HOWEVER, if h5 is priced at only 1.05x h4, do you see that h5 will sell more units that h4, even though h5 is still priced higher and is therefore “less affordable”? If buyers see sufficient content (i.e., they smell a bargain), they will buy more of the higher priced unit. I am saying that there is some price, maybe between 1.10x and 1.20x, where unit sales of h5 will equal h4. In other words, there is a balance point, say at 1.15x, where the “value proposition” (meaning content) offsets the “affordability factor”.
In looking at MB versus Lexus or anyone else, we don’t know the dollar value that buyers place on prestige, and we don’t know whether the price/prestige ratio is beyond the balance point or not. So imho we actually can’t say whether the price of MB vs Lexus, taking MB's extra prestige into account, is limiting unit sales of MB vs Lexus or not.
#5057 of 24723 Mercedes Recall
May 19, 2004 (11:13 am)
With all the talk on sales and prices, nobody mentioned (unless I missed it) that Mercedes last week announced a recall of 680,000 cars worldwide. This includes E-Class sedans built after March 2002, E-Class wagons made after March 2003 and SL models built after October 2001 because the electronic braking system has failed on some E-Class and SL-Class cars.
The recall affects more than 143,000 cars in the U.S., according to Automotive News.
#5058 of 24723 Re: Mercedes Recall [lenscap #5057]
May 19, 2004 (2:12 pm)
Of course we all saw that. But you weren't supposed to mention it! Didn't you get the secret message?
May 20, 2004 (1:30 am)
"I hope you understand my point that if additional value (prestige in this case) is present to offset the higher price, then unit sales need not be lower than a lower-price, lower-prestige product."
I never denied that prestige favors Mercedes-Benz and it does make up for some sales of course, but this is only the case if the person can afford ($$$) to buy into this prestige. Simply put if you don't have the money prestige means nothing. You seem to imply that everyone can just buy up if they see the prestige, and that simpy isn't the case. Prestige or not, 20K is still 20K and if you don't have the option of stepping up all the prestige in the world doesn't mean anything.
May 20, 2004 (6:01 am)
First of all, 20k doesn't reflect the real world, even at the S430/LS430 level. It's more like 13k there, and less (or nonexistent) at the E/GS, C/ES, ML/RX levels. Just go to the autonation.com website, search for the S or LS among the whole network, and click on 'msrp' to sort by price...the median in-stock S430 is $75,380, the median in-stock LS is $62,189. I know that looking at inventory isn't a perfect guage, but annecdotally, I don't see many people on edmunds or cl talking about shopping for base LSs.
If someone is getting a loan, what does that 13k difference mean, a 36 month rather than 30 month loan, with equal payments each month? If someone is leasing, how much does it mean...a 4 year rather than 3 year lease or something? Personally I've always paid cash, maybe ljflx or someone can help out with the lease discussions.
But I will grant that some INDIVIDUALS may be priced out of the market by the S430. Even if they don't want to buy an E500 instead, the mistake you make in your thinking is not considering the other side of the coin. To wit, there are some INDIVIDUALS who just won't consider Lexus because for them, they must have THE highest-prestige mainstream luxury sedan, period. Lexus just can't be considered, for such individuals. So just as price may exclude some individuals from the S430, lack of prestige may exclude some individuals from the LS.