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.
Feb 14, 2005 (6:39 am)
Toyota prices the LS for less because it's more efficient to begin with. The TPS mantra they follow is the best in the industry. They fully utilize the benefits of platform sharing and not offering numerous engine types..Hence their strong financials. Their cars are built primarly by robots, hence avoiding the union worker mess the Germans have to deal with..Basic economics will tell you the most efficient producer is the most profitable one. We all know the most expensive item isn't the "Best" one..
My citing of financials is to show that the Toyota/Lexus philosophy has proven its superiority in the market. You can't argue with 12 Billion in revenues. And yes, I wouldn't buy anything that was from a troubled manufacturer..It's common knowledge that people tend to avoid troubled airlines such as US Airways in favor of healthier ones like Southwest..It's basic consumer psychology. Would I buy a Maytag Neptune Washing Machine if the company were in trouble..No? A car isn't a $100 purchase that you would ignore these things..
Lexus was originally developed for the US market solely..They might offer their cars in Europe, but these cars were designed with the US consumer in mind..That will change soon as Toyota seeks to give Lexus its own identity.
All Lexus cars run on a 6 year cycle. At year 3 they recieve a minor refresh..This has happened in 1993, 1998, and 2004 with the LS..Nothing new here. What about BMW? They've just done the same thing..Only Jaguar leaves their cars untouched for nearly ten years..Who can blame them? They make the best looking cars on the road.
I could care less about the prestige part. I would buy an older Rolls if I wanted that. Better yet, I'd pick an off lease Jaguar Vanden Plas, a car with an exterior and interior look that trumps anything out there. Actually that's what I'm planning on doing, as a off lease XJ8 is probably one of the best buys out there. With a Select Edition Warranty I'd have no problem taking one home.
What is the Lexus allure? It's the luxury car that almost makes sense to own from all objective views. I have better things to do with my money than to blow it on a car just because of looks! It had better make sense logically to buy that car..And the Lexus LS has done that for me for over 13 years! It's easy on my wallet (Can't argue with 18K every 3 yrs for a new one), drives great, has the best electronics in the industry, and is a general pleasure to own. For me, piece of mind is far more important than "Looks"
#7495 of 24723 Pointless........
Feb 14, 2005 (7:01 am)
"My citing of financials is to show that the Toyota/Lexus philosophy has proven its superiority in the market. You can't argue with 12 Billion in revenues. And yes, I wouldn't buy anything that was from a troubled manufacturer..It's common knowledge that people tend to avoid troubled airlines such as US Airways in favor of healthier ones like Southwest..It's basic consumer psychology. Would I buy a Maytag Neptune Washing Machine if the company were in trouble..No? A car isn't a $100 purchase that you would ignore these things.."
Yet people do just that. Who in the world thinks like that when buying a car unless the company is reportedly like 2 steps from being out of business or leaving the U.S. market? Mercedes isn't close to either. People don't walk into a car showroom and ask how the company is doing if they want the car. People still buy Jaguars, VWs, Saabs, Mercedes and Chryslers no matter how much trouble their repsective companies are in. The only companies that are in that type of trouble are Isuzu and Mitsubishi (maybe). This thinking that buyers are incorporating some type of corporate health check into their buying decision is a pure fantasy by Lexus owners/fans on this board. All made up with no basis in reality. If people really thought like that no company that has ever been in trouble would ever recover. Audi in 1992 sold 12K units and was written off. They turned it around by sheer product. All this corporate isn't going to make a Lexus any more appealing, in fact it only enhances the boring image that Lexus itself has seen fit to try and change. A tuner arm, the so-called L-Finesse styling initiative, and 400hp hybrids should be touted if one wants to make the brand appeal to those who find it boring, not corporate talk about balances sheets.
#7496 of 24723 denaliinpa and other S and A8 apologists
Feb 14, 2005 (7:02 am)
I'll ask again, why do S and A8 owners like their cars less than LS and 7 owners? Why do they seem to be less "enthusiastic"? And if they aren't happy with their cars, even apart from the quality issues, what is going to happen to the S's worldwide sales "dominance"?
Data from this site:
...call up the 2004 A8, 7, S, and LS. You'll find that, even ignoring the quality-related issues and focusing instead on performance, comfort, features, style, and overall appeal, actual owners of A8s and Ss DON'T like their cars all that much, on average, whereas owners of 7s and LSs DO.
It seems to me that the LS and 7 are "on a higher level" than the S and A8.
Feb 14, 2005 (7:32 am)
It might be necessary to click on the "Auto" icon and then click on "Automobile Ratings" to get at the right screen, which asks you to "Pick your cars".
Feb 14, 2005 (7:33 am)
I wasn't saying that MB is on the verge on insolvency. But these sort of things contribute to the buyer's decision. I just picked up a Financial Times detailing MB's profit and reliability issues..Are you saying this has NO impact whatsoever on the public? Why would a reputed newspaper like the Times bother to report it then? Regardless of what you say, people to pay attention to the likes of the FT, Consumer Reports and JDP. Every time one of their surveys come out it's plastered all over the media. People don't just blindly buy cars just because it's "Pretty."
Actually people do think like that..It was a primary reason for the demise of Pan Am..Much of the flying public "worried" whether it was safe to book with them. Travel agents hesitated to book on them. Eastern was another example in the Lorenzo years..They were fined for various safety issues and paid dearly for it in terms of bookings..Like it or not, negative media reports do affect people's thinking..If Lexus were to have repeated recalls I'd think twice about it.
Actually that Fuel Pump and Transmission issue is a known one, they recalled a bunch of LS430's last year...If you want to go that route, you'll still see Lexus trumps every German nameplate in that respect. Oddly enough Lexus took each car back did the repair and returned it cleaned with a full tank of gas..If that wasn't enough a $200 gas card was sent to each customer..I just got an apology from Lexus about the '02 I traded b/c of some issue with the Lexus Link that I never even knew about..With that apology came a $50 gas card!! That's called committment to the customer. Lexus stands behind their product, pure and simple.
Feb 14, 2005 (7:50 am)
"But these sort of things contribute to the buyer's decision. I just picked up a Financial Times detailing MB's profit and reliability issues..Are you saying this has NO impact whatsoever on the public? Why would a reputed newspaper like the Times bother to report it then? Regardless of what you say, people to pay attention to the likes of the FT, Consumer Reports and JDP.
We've been over this before too, and saying that people pay attention to JDP and CR is a given, but that doesn't have anything to do with a company's corporate health. Yes a many people do use CR and JDP in the buying decisions. Yet even with all the JDP and CR stuff "plastered all over the media" BMW and Mercedes both had record years in this very country last year? Either some here take these surveys too seriously or thousands of buyers couldn't care less. What is the explanation behind this? Some people actually buy BMWs, Audis, and MBs because that is the car they want knowing full well what the surveys say. There is proof of that right here on Edmunds for all three brands.
I myself would have expected MB in particular to suffer a sales drop back in 2002-2003 when it seemed like every month there was a new damaging article about quality, but they didn't.
Nor is there is there any evidence to support that a bad press in the WSJ/FT about a car company's balance sheet or earnings has stopped buyers from buying a Mercedes, VW, Chrysler or any other troubled car company. Absoulutely none. Again except for maybe Isuzu and Mitusbishi. The former, Isuzu has been reported to be leaving by several sources, though they say they aren't. That type of press would deter me from buying one of their cars for sure, but to say that is happening with MB is pure fantasy.
People worry about flyng has nothing to do buying a car.
The Times reports and publishes a story because they can. They also do it for the same reason anyone else does, because this is a hot subject to them....still doesn't mean it matters or that everyone considers it the bible.
Now if there is some survey and/or evidence that buyers are monitoring the corporate health of a company and/or it plays a role in their buying decision I'd like to read about it. Not the reliability surveys, I'm talking about the balances sheet, CEO changes and corporate health stuff so often hyped here, making a difference in actual buyers decisions. Where is the proof of this mattering so much? It surely isn't in the 2004 sales totals for BMW or MB.
If this were so true then buyers would have ignored Audi, Nissan, and now Chrysler's newest products to the point where they wouldn't have been able to turn themselves around or at least start to do so.
#7500 of 24723 financial performance
Feb 14, 2005 (8:48 am)
imho both side here have some valid points. I mostly agree with merc1 that financial performance has little impact on most people's current buying decisions, except in those cases where one might question whether the company will be around in 5-10 years to service your car, which isn't the case with MB. However, there might be a very few potential buyers who might wonder, "if I buy an MB now, will corporate profit pressures somehow affect me down the road? Might MB find some way to cut costs/increase revenue in a way that hurts me after I buy the car?" For instance, what if MB raised parts prices significantly in order to shore up the bottom line, and I needed some replacement parts?
It is also true, as others have pointed out, that near-term profitability issues may impact what happens, product-wise, down the road. For instance we could see cost cutting in R&D, or fewer product variations, or more parts sharing with Chrysler, that might not be welcomed by MB buyers.
#7501 of 24723 Merc1
Feb 14, 2005 (10:08 am)
you stated: This thinking that buyers are incorporating some type of corporate health check into their buying decision is a pure fantasy by Lexus owners/fans on this board. All made up with no basis in reality.
To the ultra-high end buyer, maybe the financials don't matter as much bcos what they are buying is the name and the cache recognition. Afterall, how practical is a Bentley Arnage or a Ferrari Enzo for everyday driving ?
But the 99% of the market that all MBs play in has a lot of savvy buyers who spends time checking out the facts about the car they are buying and who is behind the car. MB is losing market share because the savvy buyer has wised up to the over-priced and loss of shine of the MB badge, hence the poor financials. When the buying public rejects MBs for Lexus, Audis, BMWs, or whatever else meets their needs, then MBs financials reflect that. And if you cannot see the direct correlation in that simple fact, then I guess this debate is truly pointless.
Companies that produce goods to the market live and die by their products' acceptance in the market. When the market sours on a product, that's its death knell. Mitsu and Isuzu are in trouble bcos their products suck (except for a few), no one wants them, and they've got bad management. If MBs follow the trails blazed by these aforementioned companies, it will go the same route. That simple.
How difficult is that to understand ???
Feb 14, 2005 (10:53 am)
Let's just be basic about this ok. First - The type of buyers we are talking about indeed monitor businesses and how they are doing because many are business people in the first place. It's in the news and in your face and unavoidable as often it's on the front page. When you read those things you give a lot of thought to a business' financial health before you pluck down $70-100K on a vehicle. Second - The reliability that you have such a hard time dealing with has hurt your brand enormously. Third - As another poster pointed out so well, many of MB's 1mln car sales are much lower end cars with thin profit margins that they wouldn't even bring here. So the loss of momemtum in the US market is a killer for them. Last - financial problems severely restrict future movement. At a time when competition is about to go worldwide from an incredibly strong company that surpassed their US unit sales and profits in less than 10 years with half the bandwidth that is a serious issue to have to deal with. It's worse when you have the costliest production in the world and are putting out a product that gets poor reliability ratings that are sinking lower and lower each year. It's worse still when that company has targeted you, is very wealthy and is about to get quite aggressive scaling up what had been a narrow bandwidth attack.
You look to the past and a handful of performance cars and think MB will hold its status icon forever because of who they are. I look at the future and view it from a business angle and see a totally different picture. And as I said earlier business is littered with former number 1's that have dropped many notches. It was well over a year ago that their sales started to drop and both of us said let's see if it continues. It's worsened in unit sales and in the fact that they have had to drop prices to keep the sales from slipping even more. They haven't dropped MSRP's but that's like looking at the Prime rate as a true business interest rate. It's easy to prop up dollar sales - you do it with subsidies that show up as expenses and a P&L that then overstates revs and expenses. The proof of the pudding of the real problems here show up in the type of leadership now sought and a barely profitable business.
I am hardly saying MB is going bankrupt. They will recover at some point but it will take longer than anyone thinks. It always does. But when they recover it will be at a lower point than their height and they will lose that number 1 mantra - in my opinion. Unlike the long path to recoverability, losing a number one spot almost always happens quicker than expected and as a surprise to many. Don't count me in that last group when it happens.
#7503 of 24723 I think...
by kyfdx HOST
Feb 14, 2005 (11:24 am)
that you are wrong about the typical high-end buyer... Maybe your view is tinted by being here on Edmunds..
I think most buyers of any make, do little or no research on the car they buy, and have no idea how the corporate parent is doing...
Other than Mitsubishi, I can't think of a single car company doing business in the U.S., that I would be worried about...