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High End Luxury Cars

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  • merc1merc1 Posts: 6,081
    It simply amazes me how sales are one minute the proof that a car company is finished and the next they don't mean anything. Now, at this very moment Mercedes-Benz has lost it's way because they are not selling as many cars as Lexus, BMW and Cadillac is closing in. There always seemed to be one business minded person in here to understand that Mercedes' sticker prices alone shouldn't have ever allowed them to compete in the sales race. That remains the case I see. Gee, I wonder why Maybach can't outsell Bentley and Ferrari can't outsell Porsche, price shouldn't keep this from happening, it's the cars that aren't up to snuff. Lets not pay any attention to the fact that Lexus' sales dominance over BMW and everyone else is based solely on SUV sales, not their supposed to be oh-so great cars. Yet nobody can see that the IS, GS and even the LS have either fallen in the last year (LS), or never sold good period, GS and IS. Nevermind that Mercedes' competing models either sell at the same rate S vs LS, or better, E vs GS, C vs IS, while costing thousands more. It is written nowhere else than in the Lexus handbook about sales equal the best. Interestingly enough the same problem exists at work with management, crunching numbers until they are silly. No reguard or thought about anything else.

    Yep, a 6 percent drop in one month after years and years sales records surely spells the end.

    Now Mercedes will resort to selling taxis and turn to fleet sales to make up the difference.

    Even Mercedes' traditional market position between a BMW and whatever softer-riding cars that have always existed before Lexus is seen as being "stuck". Amazingly this has worked for years and years all over the world, with BMW now having stated their goal is to become more diverse and offer more product to reach their mainl goal of outselling Mercedes worldwide by 2008, yet Mercedes is stuck in the middle. Again this is only in the Lexus handbook of market rules which are dictated by whatever sales numbers are posted in a given month, lets ignore everything else.

    Quality control problems with specific components can't be changed in short order with changes at the supplier level, production line, or facelifts to current products, because these things are too expensive, but a styling direction can be changed in short order with what I guess is a cheaper task, a total redesign of cars that have just been introduced. Makes perfect sense to me.

    Let me set the scene early, this same crowd will surely cry foul next couple of years, when and if the 1-Series and X3 allow BMW to pass Lexus in sales. They'll say that the 1-Series and X3 aren't "luxury vehicles". This same group can't even acknowledge that the Lexus sales juggernaught is being fueled by 1 car (ES300) and two SUVs (RX, GX), yet none of them claim that Lexus is finished despite not being able to give away the IS, GS models.

    I've haven't read so much nonsense in quite a while, at least on this board.

    Here's in interesting concept that will surely be shot down in minutes after this posting. Since we're dealing in future predictions of gloom and doom. Here's a nice "what if" scenarios. What if Mercedes had 3 SUVs to equal Lexus'? Going by the two brands sales relationship in cars, Mercedes' SUVs would sell just as well or better than Lexus', but lets not even think about anything like that because it wouldn't fit in with the current hysteria.

    ljflx,

    Well honestly its a very sleek concept, but it doesn't do anything for me. It doesn't have any surface details or anything, it just a sleek blob to me. That said, I'll wait for the real car, which should have some more detail to it.

    M
  • b4zb4z Posts: 3,372
    I just want to go on record here and give MB it's due.

    The current problems seem to be related to the hyper advanced electrical systems that MB has decided they want to be a leader in.

    Not the powertrains and body.

    The areas where they are having problems seem to be afflicting the German auto industry as a whole.
  • footiefootie Posts: 636
    I assume that the 'Hyper Advanced' is tongue-in-cheek right? As in wink, wink!
  • ljflxljflx Posts: 4,672
    I will bet that the 1-series and X3 will be flops in the US and could drag down the nameplatess very badly. At those price points consumers are seeking value not a luxury brand. Nor will consumers buy a luxury brand that fails to deliver real luxury though there will be some that are fooled initially. But it will be the equivalent of buying a fake fur coat. There is an elasticity of pricing (particularly in the US) that a luxury brand should not go below. Those cars will break that threshhold. It's not a bad decision to build the cars but it will be a bad decision to market them here.
  • lenscaplenscap Posts: 854
    I finally received my Car & Driver over the weekend and it had a harsh review of the BMW X3. Their main complaint centers on the horrible ride (sounds as bad as the Infiniti FX45). And in order to rush this thing to market it is not even being made by BMW, but by a third party in a factory in Austria. C&D also had complaints about the new 5 Series, questioning not only its styling but some of the electronics since they ruin the pure driving experience.

    Yet, despite these issues there will always be people who buy these cars simply because they say "BMW."
  • sysweisyswei Posts: 1,804
    You wrote "Lexus' sales dominance over BMW and everyone else is based solely on SUV sales....What if Mercedes had 3 SUVs to equal Lexus"

    Look at the numbers, 2003 YTD through September (per Autosite.com):

    RX 66,015
    GX 21,846
    LX 6,023
    total Lexus 93,884

    ML 21,942
    G 1,361
    total MB 23,303

    So what it MB had 3 SUVs instead of 2? Right now, Lexus outsells MB by 4x while offering 1.5x the number of models (and 1.0x the number of variants, since the ML comes in a 350 and 500, and not counting the ML55 and G55).

    It is the vehicles that "aren't up to snuff", to use your words.

    You ask "What if Mercedes had 3 SUVs to equal Lexus". And I ask: What if Lexus had as many CAR models as MB does? Lexus has 5 car lines, IS, ES, GS, LS, SC, while MB has 7 lines, C, E, S, CLK, CL, SLK, SL. Lexus has 7 variants of those 5 lines, while MB has 25 variants of its 7 lines (not counting AMG models).

    But in reality, we don't have to play "what if" games. Customers have voted with their wallets, and Lexus, despite the lack of heritage and lesser prestige, has come out ahead in the REAL market.
  • sysweisyswei Posts: 1,804
    Not predicting that it WILL happen, but I still think it could be done without hurting the brand. Didn't MB have 10-15% across-the-board price cuts in 93 or so? Didn't seem to hurt the brand.
  • When you get a chance to drive the LS430, drive the Ultra edition (the $71,000 model) I think you will be surprised how much road feel there is when you put the car into the stiffer mode, you will also be surprised how fantastic the ride is.
  • footiefootie Posts: 636
    Just some speculative thinking about how modern systems technology and software enables engineers to reproduce feel and experience:

    Re the Lexus sport ride, I think the general trend to provide multiple ride settings is the harbinger of what I think of as Dial-A-Ride, followed by Road and Location aware Suspension settings.

    GM's new rheological shock absorber system ( ferroelectric damping ) is adjustable in real-time by Digital Signal Processor technology to provide not only instantaneous response to the 'bumps' encountered, but also the style of the ride in jounce/rebound dynamics.

    Since the 'feel' is in software, you can imagine a Dial-A-Ride option in the future. Like BMW for this stretch, hey dial-in a 540i, E320 for this piece, Dial-it-in, Lex for super smooth cruise during the hour long conference call, Dial-it-in.

    I wouldn't think that BMW will program in MB nor MB BMW. It will be too hard for them to let go of their 'unique' feel.

    Since this is largely electronics based and a such differentiator, I think I know who might. They'll get it right. Imagine copying the 'feel' and driving response. I can hear the howls from Germany now "voo cannot do dat!" :)

    Then the GPS integration will occur and the RDS radio pickup info on road conditions. You can tell it what you want, ask for suggestions, or just let it do the right thing.
  • ljflxljflx Posts: 4,672
    The "what if" scenario on MB having 3 SUV's is a silly one. If they thought they could beat or compete well with the RX330 they would have done so by now. This is a weak spot in their armor and is partly a function of not having good platforms to build off of.

    I know a bunch of RX owners around here and they think of it as more of a car than a truck. Count it however you like but it's not truly in the LX, GX suv family. It's more of an elevated luxury sedan to me. If I bought one I'd still need an SUV. That's my personal judgment point and serves what the determining factor on what the RX330 is to me.

    Syswei - We ended up with about 20" of snow down here in central NJ. I never saw it snow as heavily as it did on Saturday afternoon for about 3-4 hours. More than a foot fell in that timespan.
  • sysweisyswei Posts: 1,804
    We had maybe 10", I was disappointed. It was interesting how badly traffic got snarled Friday afternoon...my office is on a main road and it was crawling, with ambulances having a real tough time getting through. Our receptionist took 2.5 hours to get home...normally it would be 20-25 min. I left later, 6pm, and it was ok by then, plus I live closer.
  • sysadbsysadb Posts: 83
    You are correct. MB did reduce the price of some models. At one point an SL500 (early 90's) well-equipped would MSRP for about $105k. They reduced that car by almost $20k. And a few years back MB reduced prices slightly while attempting to hold to a fixed-price strategy in the showroom. The invoice costs to dealers did not decrease, so the net effect, even now, is that MBs do not have the markup margins they used to. In general, all the luxury marques have attempted to hold the line on increasing MSRPs for the obvious competitive/marketing advantages.

    But... a reduced or stagnant MSRP price doesn't mean too much if the cost to the dealers (factory invoice) increases. The price reductions 10 years ago were accompanied by cost reductions as well.

    DB
  • Great idea, but all the electronics in the world will not alter certain fundamental physical factors, such as the roll center, the center of gravity, and the polar moment of inertia. Just as one cannot make a silk purse out of a sows ear, one cannot make a top heavy, front-heavy SUV handle like a BMW 530 with 50/50 weight distribution.

    And how would the electronics compensate for something like a lack of rigidity in the chassis, brought about by something like a missing B pillar?

    At best, the electronics will allow one to alter parameters WITHIN THE DESIGN ENVELOPE AND LIMITATIONS OF THE PARTICULAR CAR.

    Another factor will be cost. Cadillac probably spent big $$ and massive amounts of time taking the CTS to the Nurbergring and tuning it like BMW does. Do you really think some engineer in a lab in Japan can simulate this data? I don't. A manufacturer will not really want to go to all the trouble of studying and accurately modeling the characteristics of each car the "dial a ride" is supposed to emulate, even if the vehicles fundamental dynamics made that possible.

    Anyway, it was a great thought . . .
  • merc1merc1 Posts: 6,081
    I knew I was right about 2 things, the SUV "what if" and the BMW X3 and 1-Series. BMW's new models will fail because they can't be allowed to add to BMWs sales totals, thus giving them a chance to pass Lexus. That said, you know how I feel about SUVs, so the X3 is of no mention, but you're forgetting that SUVs are as hot as nickel beer and the X3 I'm betting will sell like such. How can you say the 1-Series will fail when nobody even knows anything official about the car yet, other than speculation.

    Here is what seperates the thinking in here. Lexus is about luxury first, combined with great stereos and nav systems, all wrapped in leather and wood. Thats the way most Lexus fans will look at every automobile, but that isn't the only formula that works, obviously. BMW is about driving first and foremost. If the 1-Series is constructed of quality materials like all other BMWs and provides that driving feel and performs like a BMW should, the car will be a hit because it will open the doors of BMW ownership to a whole new group of less-monied drivers.

    Lexus supporters always say that Lexus has no intentions of offering a car for less than 30K, but the reality of it is that they can't because of already fairly luxurious Toyota models like the Avalon and Camry XLE V6, both of which already crowd around the ES330's base price. Saying they don't intend to isn't as true as saying they really can't.

    Now for the SUV "what if" component. I knew it would be deemed "silly" amoung other things. I, after freely admitting that the ML is no competiton for Lexus' clear-cut dominance of the luxury suv market, merely suggested that if Mercedes had 3 SUVs that were of worth competition that they might sell much better than the (no contest) ML does.

    ljflx, as far as Mercedes competiting with the RX300, the ML was actually first to the market, but they misjudged what the next trend would be, which as you state correctly is a car-based, tall car like vehicle now dubbed the "crossover". The ML is built like a tradition SUV where the RX is built more like a car, and the RX concept is what is preferred, no arguement from me there. Where you are wrong is the assumption that Mercedes doesn't have a decent car platform to build a RX like vehicle from. The C or E-Class chassis would be perfect for this, but what do you expect them to do, dump the ML, close down a new factory and redesign a new vehicle while throwing all the billions used for developing the ML down the drain? I know you understand that it takes time and money to react to a changing market. The upcoming R-Class (GST) is Mercedes entry into the crossover segment, though at a higher position than the RX. The ML is also switching to a car-based platform for 2005, while I doubt it will be as soft as the RX330. Yes Mercedes, like everyone else didn't see the RX success coming, score one for Lexus.

    syswei,

    Like all the other sales theories cast so far in here, you're ignoring price. There is no way a 90K G55 is going to every sell in any significant numbers. Lets stay current also, there is no ML55. Yes Mercedes has more car lines than Lexus, but when are you going to look at the sticker prices for all those Mercedes models you're citing as being a selling advantage over Mercedes. Doesn't the IS/ES compete with the C-Class, the GS with the E, the LS with the S, the SC with the CLK and to a lesser extent the SL? If so then that leaves the SLK and the CL as the models that Lexus truly has no answer for. At least a half-dozen "variants" of some of the MB models you listed sell for over 100K, yet you're citing them advantages when it comes to sales, come on now, do you really think a CL55, SL600 or even the E55 is the reason why Mercedes sells more cars. One minute AMG sales are the most insignificant sales numbers on the market, now they are implied to be a big reason as to why Mercedes actually sells more cars.

    Ultimately, Mercedes having more cars is easily balanced out by Lexus' cars costing thousands and thousands less.

    I don't have to look at all the cars Mercedes has to prove my point. When you look at the E320 and the E500 vs the GS300 and GS430, the E wins in sales, quite easliy. Forget the E55 and the E320 wagon, the former a small volume car, and the latter just having gone on sale. The E does over 5K cars a month, take away 1500 of those (even if they wagon and E55 sold that many, and they surely don't) the E still outsells the GS easily, and does so a much higher price.

    The S-Class is the same way, it sells just as well or better than the LS does (its really a up/down thing here), and the S55 and S600 models only account for maybe 150 cars a month in a good month.

    Using the prevailing logic in here, the amount of cars Lexus sales says they're cars are just as below-snuff Mercedes SUVs are considering how Lexus' cars sells compared to always more expensive Mercedes cars. To look at, and use sales numbers as the sole basis for coming to such a conclusion is plum-ridiculous, but that is what was implied about Mercedes yesterday on this very board, while not even looking any other facts.

    You totally missed the SUV "what if". It went like this, what if Mercedes had 3 SUVs priced like and just as capable as Lexus'. I already know that the ML and G don't compare, you're only proving my point about Lexus' sales lead being based on SUVs.

    My point for bringing all this up is that you and others are not looking at the total picture when drawing all these uninformed conclusions about the demise of Mercedes-Benz, based on sales data. You're right we don't have to deal in what if type reasoning, and I almost never do, only did so because of the rampant speculation going on, but you're not dealing in ALL the facts about the REAL market either.

    Aren't you the one that said over and over that the SC430 doesn't compete with the SL500, XK8, 911 and the like because of it's price? Yet you're ignoring this very same thing when it comes to sales, pretending it has nothing to do it.

    M
  • If Mercedes had 3 suvs in the same price range as Lexus they would have 3 vehicles with electrical problems and a stiff ride that the moms who drive suvs would not like. Moms want dependable, comfortable, logical and safe SUVs

    You did nail my perception of the Lexus and BMW in your opening remarks. Well said.
  • oac3oac3 Posts: 373
    Lexus_vs_MB. The last time I checked, this forum is about "High End Luxury Marques", but somehow we like to turn it into a Lexus_vs_MB or BMW. Not that it is a bad idea or anything.... just pointing out the obvious.

    I am currently in Tokyo on a business trip and will be looking for as much info as I can glean on Lexus, BMW and MB plans in the home turf of Toyota. If I learn anything different than what has been printed here, I will surely post. This time, for the first time in many trips, I finally brought my camera and should be on the lookout for any nice snazzy car out here. If edmund's permits, I'll gladly post them as well. That's if I find anything interesting enough to post.

    Guys, pls cool it down. None of these companies is going out of business anytime soon. MB has some issues and if they are not sidetracked by problems of the Chrysler Corp., they may sort these out soon, otherwise it may take awhile and be more painful. BMW's Chris Bangle is surely turning out very polarizing designs. And with the 7 slated for a redesing in a couple of years, the 5- might not be that far behind. Let's wait and see how the market accepts the new design of the 5-. The 3 is gonna be very interesting. If BMW is smart, they won't let Bangle touch that beautiful model. I see so many Bimmers in San Diego, I have grown to love them. Would I buy one ? Of course, but only brand new and must be on BMW warranty. Hehehehe..... Nice car, but can be a pain to fix....
  • sysweisyswei Posts: 1,804
    You're wrong when you assume that I ignore price. Far from it. My opinion is that MB tries to get away with high prices because of the heritage, 117-year history of innovation, and attendant prestige that its younger competitors can't match...and can't be expected to match. And I'm saying that the buying public, on balance, doesn't feel the high prices are worth it...which is why MB isn't number 1 in unit sales.

    I've said before that for me, the SL500 would be "better" than the SC430, if price were not a factor. But in the real world, price IS a factor. Which is why, imho, price should ALWAYS be considered when comparing cars. I'm sure you personally feel that the S500 is "better" than the LS430. But is it, I ask, "better" when you consider the price difference?
  • sysweisyswei Posts: 1,804
    Your reasoning on the SUVs still baffles me. You ask, what if MB had 3 SUVs comparable to Lexus' SUVs? That would be like me asking, what if Lexus had a car comparable to the E, rather than the poor selling GS? Both are kind of silly "what ifs" if you ask me.
  • lenscaplenscap Posts: 854
    According to the latest ADAC (Germany's largest auto club) semiannual survey, German drivers rank Mercedes #32 out of 33 in terms of customer satisfaction. Further, if satisfaction with service is eliminated from overall vehicle satisfaction, Mercedes then ranks last.

    It should be noted that customer satisfaction makes up only 10% of the final grades on the survey, which were not released in the article I read.

    Japanese brands captured the top seven spots. Notable rankings:

    #1 Toyota
    #11 BMW
    #14 Jaguar
    #26 Audi
    #31 Volkswagen
    #33 Land Rover
  • Just wondering what are the loaner car policies at your dealerships. Do you get a comparable car as a loaner (5 series for 5 series) or just something that is available at the time?
    Also, $75 oil change is way too much considering I can get it done for $25 or so elsewhere.
  • sysweisyswei Posts: 1,804
    Lexus service is a rip imho, though I think that's true of any car company. My understanding is that, at least with Lexus, if you use JiffyLube or someone like that, it will not void your warranty as long as you have receipts that the work was done.
  • If Santa can be kind and let me win the Powerball Lottery ($76 million currently), I would buy these cars:
    1) Lamborghini Gallardo
    2) Aston Martin DB9
    3) Audi S4
    4) BMW M3
    5) Range Rover HSE
    6) Mercedes SL500
    7) Audi A8L (until the S8 comes out)
    Those are my lucky seven--a different car to drive everyday. What's yours?
  • merc1merc1 Posts: 6,081
    "And I'm saying that the buying public, on balance, doesn't feel the high prices are worth it...which is why MB isn't number 1 in unit sales."

    And that is wrong because there is no way a car that starts pricewise in most cases where another car tops out, like in the case of the LS430 vs the S-Class, could you ever expect to outsell the cheaper one, at least by any significant margin. (Yet Mercedes does in some cases!) In order to make such a broad sweeping rationalzation that the market doesn't think Mercedes' are worth the extra $$, you'd have to know that each and every LS430, GS, SC etc buyer can afford the equivalent S, E or SL model, yet chose to buy the cheaper Lexus. You simply can't make such an assumption.

    If you can't see that Mercedes' sales are also limited by price then you're not dealing in the reality of the market. Do you expect Ferrari to sell as many cars as Porsche, they compete with each other also, but at different prices. If the Mercedes CL or SL were 30K cheaper do you think it would have an effect on sales? Of course it would, its common market sense.

    If you feel that the market doesn't think Mercedes' are worth the premium then I'd like to know your reasoning as to why the S-Class sells as good or better than the LS430, the E way better than the GS ever did, the SL at about the same rate as the SC, despite the huge price differences.

    It seems to me that the market does think *certain* Mercedes' are worth the premuim because despite thousands of $$$ more, as they buy these Mercedes models in the same or better numbers as the cheaper Lexuses. The reverse could be said here with these models, if these Lexus models are so good then why can't they outsell the competing, and more expensive Mercedes models. I would never say that because there are obviously other factors to consider, which you're ignoring when speaking favorably about Lexus.

    The only area where Lexus kills Mercedes sales/product wise is SUVs, of which there is no argument from me, but to make such a broad statement like you made above about all of Mercedes' cars is simply not based on the facts.

    The SL500 vs SC430 relationship isn't the same as the LS vs S relationship. The SC430 doesn't offer anywhere near the technology, styling, engineering or the sheer experience of the SL, to name a few things, without going into much detail. The LS430 is a whole lot more competitive with the S-Class than the SC is with the SL. The SC430 is a fine car for what it is, bascially a 2-door convertable LS430, but its no GT car.

    M
  • merc1merc1 Posts: 6,081
    Lucky Seven:

    Mercedes SL55 AMG
    Mercedes CL600 Sport
    Mercedes E55 AMG
    Audi RS6
    Ferrari 360 Modena
    Porsche Carrera GT
    BMW M3 Cabrio

    P.S. I need a "lucky 10" to get come close to listing all my favorite lottery cars.

    M
  • merc1merc1 Posts: 6,081
    "That's a pretty strong statement re MB. If they improve quality or lower their prices, they could well be number 1 someday."

    This was your reply as to why Mercedes' could sell more cars, clearly in this response you mention price as a hindrance to greater sales. Of course better reliablity surely wouldn't hurt either, but even a super reliable SL500 will still cost 90K.....in short it will still be out of financial reach for more people than the SC430 is. Ditto for the S500, CL or any other high-end Benz, how you can you ignore this price gap for sales purposes, but place so much emphasis on it when the cars are compared or cross shopped is astounding. Thats a clear and true double-standard.

    M
  • sysweisyswei Posts: 1,804
    MODEL DAYS ON LOT
    Toyota Prius 6
    Toyota Sienna 9
    Lexus ES 330 11
    Mini Cooper 11
    Honda Pilot 13
    Lexus RX 330 13
    Honda CR-V 13
    Lexus LS 430 13
    Mercedes-Benz SL-Class 13
    Lexus GX 470 14
    Scion Xb 14
    Acura TSX 14
    Acura MDX 14

    Source: Wall Street Journal and Power Information Network LLC, an affiliate of J.D. Power & Associates
  • ljflxljflx Posts: 4,672
    Since I'm shopping the GX and LS - I wish both of them were off that list. Best deal I can get on the GX is $2k off. Most of the time they are selling them at or near sticker around here and that weekend blizzard further increased demand. At my dealer the only ones available are the ones coming in during the next few weeks. I'll deal with the LS next month only because I want the sport suspension, otherwise I'd wait to March.

    By the way the big Infiniti SUV looks nice. But my wife finds the LX to be too big so that thing is out of the question.
  • Good reasoning...But wrong..Mercedes build a deserved reputation for quality and innovation it takes time for them to lose what took so long to build. But they are losing it.

    Bottom line: they still have reasonable unit sales, but those sales are slipping relative to their competition.
  • I read on the web that there is a car called the Toyota Century that is available in Japan only. It comes with a 5.0L V12 engine. Why aren't they selling a version of that car in North America under the Lexus nameplate. A V12 powered car would really enhance Lexus' status symbol.
  • ljflxljflx Posts: 4,672
    In 2001 Lexus nearly brought that V-12 to market in the LS but decided against it at the last minute. It's inevitable that you'll see a V-12 probably on the next LS design. There is also a V-10 sport car supposedly in the works.
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