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 (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...
Feb 14, 2005 (2:47 pm)
i find it odd the vitriolic responses directed at MB and the other German automakers. MB makes great cars. for anyone to claim that MB is on its last gasp and that Lexus...a brand that basically only existed in the USA until this past year is going to surpass MB in desirability is just crazy. Lexus has made some great strides in the USA. they are the perfect Buick. when it comes to luxury, technical innovations, progresses in safety and design MB has nothing to fear. oh wait i almost forgot...Lexus does have water repellent glass!!!
like i said earlier....it seems to me that the people who purchase a Lexus need MB to fail so they feel validated in their purchase.
#7505 of 24723 Re: [denaliinpa]
Feb 14, 2005 (3:07 pm)
Quite to the contrary - it seems you need to put down Lexus to feel a brand supremacy. Just go back and read your last post. Where did you see any of us put down the cars that MB is building other than to say they have done badly in reliability studies. What is being said here are factual results, unless of course you think the Financial Times, The NY Times, CR, JDP etc are lying to all of us. Many of your points in your posts are purely your subjective opinion.("Lexus is a perfect Buick" - give that nonsense a rest Puhleeze).
By the way were you one of those who said IBM had nothing to fear? Big difference between saying someone is on their last gasp and saying someone's days as number 1 are numbered.
#7507 of 24723 Re: [denaliinpa] by ljflx
Feb 14, 2005 (3:30 pm)
I agree with ljflx. People who put down Lexus are those who are jealous of its better built cars. They spent more but get less (including prestige). I know because I used to be one of them.
Feb 14, 2005 (3:31 pm)
If Lexus owners wanted this sign of so called status they would buy a Mercades or BMW...
I think Most lexus owners would care less if you notice their car or not...I actually like a less noticable car...
The LS is not stunning but it is not ugly...It is just right for those of us who buy them...and that is just one of their advantages...the fact that are the cleanest running of the Gas V8s, their incredable durability and dependability, their superior crash test ratings, the great (but pricy) service...the smooth, quiet ride, the great sound system....THE PRICE...It is just an awesome machine.