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.
#7234 of 24726 Re: Mercedes [ljflx]
Jan 10, 2005 (4:34 pm)
It was eons ago now (in the time when Merc1 was a staple debater on Edmunds) when I posited that MBs problems run deep and they were not positioning themselves to turn things around. In fact, I recall using the example of the (then) 116-yr-old Barron's Bank (UK) which collapsed due in large part to the unscruppullous workings of a broker in their Asian opperation (derivatives trading). When the dust finally settled on the sordid affair, the bank was no more, despite such a lofty and glorious 100+-year heritage.... Of course, I was chewed up by the MB fans (mostly Merc1) of living in *sales fantasy* and other blah blah blah... I don't want to say *I told you so*, but Len is right.
Just this past weekend, my friend who owns a 1998 S500 (the tank) told me he will never buy an MB again. This guy was a huge German-car nut (owned a 911 (sold) and a 735i (sold)). Now, he just purchased a 2005 Escallade with the 6L motor; just couldn't justify the additional $15K for the 2005 LX470. He's never owned a Japanese car in his life, but claimed his next sedan will definitely be the LS. His S500 now goes to his 17-yr-old son as his daily driver. Why, I asked ? He told me they just don't build them as they used to. Too many issues with his MB. For example, his rear-view mirror was toast. Cost $1100. Geez !!!
I guess we'll see how MB makes these adjustments going forward. Hopefully, they come to their senses rather than living off their heritage and brand cache and do something quick.
#7235 of 24726 Re: Mercedes [ljflx]
Jan 10, 2005 (5:10 pm)
I am amazed that DC shareholders still keep Schrempp in the CEO spot, despite the utter inability he has shown to successfully tackle *one* single issue that the company has had since he took over. His expansion course had no clear strategy other than growth at any cost for growth's sake, and now has left the company without clear focus and direction. The strategy is not discernible, things within DC keep going on with unresolved ambiguities. No true synergies, let alone clear brand identities, have been developed between MB and Chrysler. The darker it gets, the faster Schrempp tries to drive. He was just quoted with his master plan in the German press today: more new models and variants. No word on consolidation, no word on commitment to their traditional core values (such as quality). It will be a case study in how to manage a company down, and the sad thing is that it is blatantly apparent, and yet in the worst of Gewrman management tradition no one does anything about it. It's amusing to see that, while Volkswagen do their damndest to become more upscale, Mercedes management is doing everything they can to manage their image down-market. The brand's "stickiness" in people's minds will only carry them so far.
#7236 of 24726 Re: Mercedes [oac]
Jan 10, 2005 (5:19 pm)
General rule of advanced business is that when you bring in a turn around exec, who's a cost cutter, then you have run all the other scenarios and none of them worked. The strong euro is also forcing their hand. I never thought that this was a Barron's because that type of thing happens (and is much more probable) in service businesses and is rare in manufacturing ops. When it does happen in manufacturing its more apt to be the Food Explorer/Firestone type of problem that can bring the house down. But there is no question that the MB problems are deep, worse than what is being stated and a lot more serious than any MB fan can handle or wants to hear about.
Cost-cutting is easy on paper but not easy on your psyche since you are affecting people's live's. You always go with a guy who's done it or worked under someone who's done it. From what I read about this guy - he can withstand the pressures within the company but with a marquee German name like MB there will be tremendous union and political pressure to withstand as well. He hasn't been there (political) - very few have. To stave all that off and save the prestige of the brand name - knowing that they will have to cut back on models and options that exist today (otherwise you can't cut the costs in the first place) is an impossible task. That's why the status king days are numbered. And as I said earlier - the words faded and MB should never be in the same sentence if you want "status" clout.
The other thing brought out by that story is MB's excessive white collar management and inefficient production. I said a long time ago that Lexus is cheaper because its a streamlined very efficient company with far advancced robotics than MB has. Hence the cars are built cheaper and with greater precision and quality. End result - the phenomenal reliability we see. When you overpay for MB it's not just status you're paying for - it's also all that excess management and inefficient production as well. Merc1 used to think MB charged top dollar because they could do whatecer they pleased. He never understood they charged a lot because they had to and that if the volume fell or the price was forced to come down than they were in trouble. Unmentioned in that story is that MB had to take back many 2001 and 2002 cars for prices that were lower than the residuals on the original leases (52% vS 65-67%). That is the Enron part of the story.
#7237 of 24726 Re: Mercedes [pablo_l]
Jan 10, 2005 (6:06 pm)
You know sometimes you brainwash yourself and become a believer in the BS you are saying. The guy brought in is the exact opposite of Schremp's plan. The plan he has - re multitude of choice and models - is what they've done the past 10 years. I think both Schremp and his master plan are in their 9th life. If somehow Schremp prevails you will see the new MB head walk and that will only mean that the company's problems are worsening. If this guy prevails Schremp will walk or be forced out.
US boards are increasingly being held accountable for a CEO and his staff's bad decisions - Worldcom, Disney, Enron - and need to pay with damages from their pockets that insurance doesn't cover . It may become a global thing in the future. maybe the BOD's will finally represent shareholders the way they are supposed to.
#7238 of 24726 Re: Mercedes [ljflx]
Jan 10, 2005 (6:32 pm)
Not sure what guy you're talking about - Schrempp *is* the CEO of DC as of now, has been since '95, and has been a board member since I have business memory. And the guy's a disaster, arrogance combined with inertia is not a good combination. Typical German industrial aristocracy - they do nothing until a real trainwreck happens. Not sure where you read anything positive about MB's current direction from me. So if my points are BS, by inference yours are too, given we're saying the same thing.
Jan 10, 2005 (7:11 pm)
I think Ljflx was using "you" in the general sense and referring to either Eckhard Cordes, head of Mercedes or Schrempp himself.
#7241 of 24726 Re: Ljflx [ljflx]
Jan 10, 2005 (7:11 pm)
Guess what, the new 5 design is beginning to grow on me. Really. There was this 545i riding my tail in traffic earlier today. I took a long look at it as it whizzed by me. Lovely car. With three other 2004/05 5-series at my work place, I see them everyday and I am starting to like the it. Weird, but true !!
Bangle may not be that bad a designer afterall. Maybe he is ahead of his time, and it is just we paeons that cannot understand such evolutionary designs.
Jan 10, 2005 (7:22 pm)
Oh Jeez, what next. Saints preserve us.
#7243 of 24726 Re: [designman]
Jan 10, 2005 (7:30 pm)
No - The Jets win the super bowl. OAC's from San Diego country so he's not himself today.