Last post on Jan 28, 2013 at 5:55 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.
May 23, 2004 (8:52 pm)
"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 or base LSs."
You're right one dealer's inventory isn't a perfect gauge. You're only looking at the S430. The S500 has been the bestselling S-Class for more than a few years since 2000, it is more than 13K over the median LS430. You must not have looked the E-Class and GS' prices either lately. There is certainly a difference there, to even suggest that a price difference is "nonexistent" shows you haven't looked at the prices.
"But I will grant that some INDIVIDUALS may be priced out of the market by the S430."
My point exactly! The S500 even more so.
"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."
Also true, except you're forgetting that person who won't consider the Benz could still buy the LS, but the person who wants the S has to overcome something real....like having the money to buy up. You can always buy down, not up. One issue is easily overcome, the other isn't.
May 24, 2004 (7:17 am)
The fact that an S class Mercedes cost more, does not mean if you buy an LS 430 you are buying down...expecially since the quality of the LS exceeds that of the S class...
May 25, 2004 (5:10 pm)
"You're only looking at the S430. The S500 has been the bestselling S-Class for more than a few years since 2000, it is more than 13K over the median LS430."
We were discussing the role of price in potentially limiting S sales. You and I and I think the vast majority of potential buyers view the S430 as the closest (MB) competitor to the LS. Clearly the S500 is a higher-content car.
Frankly I feel your thinking is a bit confused if you have to point out that the S500 sells at a bigger premium to the LS than does the S430. Of course it does.
But the appropriate way to look at this is that if MB had ONLY the S430 to go up against LS430, total S-Class sales would be LOWER not higher. Having the S500 and S600 to sell in addition to the S430 only ADDS to total S-Class unit sales, which your reasoning doesn't seem to recognize.
May 25, 2004 (6:13 pm)
That's an interesting point. Lexus seriously thought about a more powerful LS in 2001 and was going the route of a 12 cyl but pulled it at the last minute because of its cost. They were still hesitant on high price acceptance by the American market. Then they introduce the ultra (which was supposed to be the car mated with the 12 cyl) with the same engine as the base car and demand far oustrips supply despite its un-Lexus like $71k price point. On top of that they push the LX into the $64-71K range from its earlier $57-61K price levels and still maintain the same annual sales despite a cheaper TLC and a GX. To me it showed Lexus would not have had a hard time selling a car over $70K years ago and probably not one in the $80K+ arena either in the near future. Their name is gold here now. They didn't give engine size any thought this go round because the hybrids are so near and they don't want to steal the thunder from the 2006 or 2007 new build - whichever it turns out to be. But when they bring on the more powerful engines and the $75K-$80K+ cars in the new build the S500 will be caught in the cross hairs and LS sales will rise higher by having models that serve a wider audience. The current engine output LS430 already pummels the S430 and they'll keep a lower LS model around to keep that going. If this really occurs - and I wouldn't bet $1 against it - it will lay to waste the price argument.
May 25, 2004 (8:40 pm)
"But the appropriate way to look at this is that if MB had ONLY the S430 to go up against LS430, total S-Class sales would be LOWER not higher. Having the S500 and S600 to sell in addition to the S430 only ADDS to total S-Class unit sales, which your reasoning doesn't seem to recognize."
No it isn't because there is a S500, S55 and S600 and those models all cost way more than any Lexus. Period. Your reasoning assumes that everyone can afford to step up to the upper 3 S-Class models with no problem thus their price not being a factor (hindering) in sales.
"Frankly I feel your thinking is a bit confused if you have to point out that the S500 sells at a bigger premium to the LS than does the S430. Of course it does."
I think you're confused because you clearly stated that prices need to be sales weighted and I'm telling you the S500 outsells the S430 some years. If anything they sell equally now so to count just the S430 makes no sense.
They call it the S-Class for a reason..it comprises more than just one car. Lexus does the same thing without an engine change. A LS starts at 56K and tops out at 71K quite a spread similar to the spread between the S430 and S500.
May 26, 2004 (3:23 am)
"No it isn't because there is a S500, S55 and S600 and those models all cost way more than any Lexus. Period. Your reasoning assumes that everyone can afford to step up to the upper 3 S-Class models with no problem thus their price not being a factor (hindering) in sales."
I disagree with your reasoning on a couple of levels.
1. You are pretending that a wider model/price range hurts sales rather than helps sales. If we used your reasoning, then if Lexus were to introduce a 100k or even 200k super-LS, it would hurt overall LS unit sales. So I guess they'll never introduce higher-end models than the LS430, because it would hurt overall unit sales? Come on, merc1, you should know better than that! Put another way, if the wider price/model range is hindering S-Class sales, why doesn't MB just discontinue the higher-end models, and market just the S430? By your reasoning, S-Class sales would increase.
2. You are talking about the price-sensitive buyer, but seem to fail to recognize that such a buyer need not buy a S500, S55/65, or S600. If he wants an S he can buy the S430. S-Class sales are NOT limited by the existence of the higher-trim lines, as long as the S430 is still marketed.
#5081 of 24726 Affordability Discussions
May 26, 2004 (4:04 am)
I think the discussions about pricing and whether folks factor it in about 50K would be more interesting if one were able to demonstrate that specific price points actually were barriers for certain customers.
What are the median incomes of the LS and S430 'buyers'. How many buy vs. lease. How many find that $1250 a month lease is a hardship, while $1000 isn't? What is their trade-off - $200 or $300 a month a very small amount.
What % of these cars are paid for by these drivers' businesses? For example, how many VP's are there in the Fortune 2500 on car plans - maybe 25,000 to 50,000? How many people in similar sized private businesses. Another 50,000?
I find it unlikely that the CEO of $100 million/yr up companies tells his Veeps that they can't spend more than $1200 on a car unless it comes right off the top of their $200K comp package. And they all go 'ouch'.
Many of the people driving these cars aren't buying them or paying for them. They don't bail to a Lexus because the can't afford an S55. They drive it because of the way it looks, drives and how reliable it is. These days it looks like a very, very good decision amongst their peers. Maybe they look at an S55 and wonder how silly that would look in the lot - worrying about a "Feeling your oats, Charlie?" comment as if they were 23 again and dumping their paychecks into NOx upgrades for your Civic.
So the real issue here is to put some facts and figures out there that talk about the 'buyers' financial profiles and where the money comes from that actually pays for them. Last time I checked with my MB/BMW friends, more than 75% here in New England were leasing.
Small money from $65K to $80K in a lease.
May 26, 2004 (4:44 am)
If having multiple models in one product range doesn't help sales then what is the point?
I mean if Mercedes sells only a S430 and sells, for example, 20K units annually, or sells a S430, S500, S600, S55, and still sells only 20K units annually, why would they spend the millions of additional dollars in development, manufacturing, engineering, marketing, legalizing(engines & names) if they end up selling no additional units of the product? Mercedes would essentially end up making less money per car(a lot less) by having multiple engines in the same body style car for no reason.
It's quite obvious Mercedes having a S430, S500, S55, S600 helps it reach a larger potential buying audience. Such as the S55 helps the S-class reach a buyer who wants a the room of a S-class but wants a much sportier car, without the S55, Mercedes would probably lose that sale to BMW, or now Maserati.
May 26, 2004 (6:08 am)
Good points except the ownership factor. Most people buying or leasing these cars are doing it with their own money. Direct payments by companies for cars are almost unheard of now and car allowances as part of salary are usually in the $500-$700 a month range (pre-tax). They are also less and less common than in the late 90's. Unlike salaries, once they are set they are not adjusted for inflation. I would bet that the Lease-buy ratio is 50-50 up front and some buy the cars at lease end as well. My experience is that it is better to lease and buy at lease end with these cars rather than buy up front - in most cases.
Maxhonda99 - The S55 and S600 are halo cars as far as I'm concerned. The S600 only sells about 1,000 units a year in the US. Only 15,000 AMG cars are sold annually worldwide and the S55 probably is a small percentage of those cars. But sometimes when you read these boards those AMG's are represented as if they are mainstream MB's rather than cars that represent 1.5% of their worldwide sales. Though the S55 and S600 represent miniscule sales numbers by themselves their halo effect helps sell mainstream S-class cars. But again that is a gap Lexus - even more so than BMW - intends to close in the next few years. Right now there is no halo effect for the LS430.
#5084 of 24726 ljflx I don't agree ... got a reference?
May 26, 2004 (6:27 am)
And it's still small money...