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High End Luxury Cars

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  • ljflxljflx Posts: 4,661
    Actually when I leased the car and told them my salary they stopped right there. The fact was that my bonus, other business income and personal income (interest, dividends etc.) were never included. In fact what I told them represented only a fraction of my annual income and that is what is on file. If I had bought with cash or separate bank loan instead of leased I wouldn't have needed to disclose anything to them. Age was asked in brackets - but i don't remember if it was 5 or 10 year brackets. i was approved within minutes as it seems all they really do is run a credit check.

    Prices - more absurdity. If Lexus existed for 100+ years and MB existed for 12 years MB would be the lower price point. That is business pure and simple. It takes a while to build brand equity and what Lexus has achieved in 12 years is stupendous. Plus Lexus builds the cars more efficiently and hence has a lower cost of goods than MB. So any smart business staregy would use that for competitive pricing advantage. Business 101. They've nearly doubled the prices in 12 years while MB has been forced to lower prices. What does that tell you? It tells me that if I was an MB loyalist I would hope Lexus hangs around forever.
  • sysweisyswei Posts: 1,804
    I agree with ljflx, you are missing the prestige factor. Pure prestige accumulated over 100 years allows MB to get away with its price premiums. As I said once in the Lexus vs Mercedes forum, Lexus is so young as a company that very few people who can afford one grew up aspiring to own one. And none grew up as a kid in a family where the parents aspired to own Lexus. That’s a handicap that constrains pricing.

    What other company besides MB could get away with charging $10,700 for a designo edition (S500) that basically gives you some unusual color choices (unusual for the US, they are apparently standard in some other countries) for exterior and interior, plus a wood/leather steering wheel and shift knob (which are standard on even on the base LS)?

    If you slapped a Lexus badge on a G500 it would sell very few, perhaps close to zero, units. Even the car rags suggested such in their reviews...that for the price the G had little to offer except the three-pointed star.

    If you put a Lexus badge on the S and tried to sell it at its currently high prices, it would sell fewer units.

    Conversely if you slapped a MB badge on a LS without raising the price, it would sell lots more units.
  • sysweisyswei Posts: 1,804
    Thank you for your viewpoint, and welcome to the board!
  • pablo_lpablo_l Posts: 491
    > If Lexus existed for 100+ years and MB existed
    > for 12 years MB would be the lower price point

    As we business folk know, stretching 10 year trends to a century is questionable. Many things can happen. It'll be interesting to see which brands are still around in a century. That is speculation.

    > what Lexus has achieved in 12 years is stupendous

    That, of course, is absolutely true. Lexus is a no-doubt bone-fide luxury player. Globally, though, the MB brand name still carries far more value, and car marketing folk claim it's Merc and Porsche which have the highest global brand equity. And given the mismanagement of Merc in the last 12 years, that is a testament to a powerful brand name and mass psychology...

    > Plus Lexus builds the cars more efficiently
    > and hence has a lower cost of goods than MB.

    I am not sure if it's still the case, but I thought histrocially Merc's margins are way higher than Toyota's. They've both managed to run up huge losses as of late, so for now it's a bit of a moot point.

    > MB has been forced to lower prices. What does
    > that tell you?

    Not a lot, since lowering prices can be done for a variety of stratgic business goals, and MB still has more than enough models that sell at $90k plus - more so than any other vendor. The fact they've managed to hang in competitively despite compromised "design for excellence" benchmarks also says a lot about the other players. It is obvious Merc made a decision to build their core models to a cost point, and no longer to an uncompromised standard, which allowed them to lower prices and benefit from the trend towards "luxury for the masses" which they for a large degree initiated. If there's a brand that knows how to exploit their brand equity, it's MB, no question about it.

    End customer perception always lags market reality for a while, and I wonder how long it'll take consumers to realize MB and BMW and others are increasingly creeping downmarket, and when it'll dillute the true luxury perception...
  • sysweisyswei Posts: 1,804
    Actually both companies have been reporting down comparisons but both were profitable in 2Q, with Toyota doing comparatively better.

    "Toyota reported a net profit of 222.5 billion yen ($1.85 billion) in the April-June quarter, down from a profit of 246.3 billion yen in the year-ago period."

    "In the quarter ended June 30" DaimlerChrysler "earned $125 million, or 13 cents a share, compared with $1.27 billion, or $1.27 a share, a year ago.
  • merc1merc1 Posts: 6,081
    My point in bringing up the trans issues that are talked about on here is that they would seem to be much widerspread than those surveys would lead you to believe. Surveys don't give the whole picture. They way you and others count the posts about problems on this board as being all-encompasing, the 7-Series and/or the BMW name, the Acura TL-S and/or the Acura name should be much lower on the surveys, and they aren't. I wasn't saying the 7-Series placed fifth, I was saying that BMW as a brand placed fifth. I just think it's kinda silly to just blindly think that these surveys really give you the whole picture, especially when you don't even get the details as to what these "problems" are.

    You consider CR to be the end-all too right? They are probably the most automotive ignorant group of people calling themselves auto testers. They don't even know how to do basic performance testing on cars. All they can do it collect data, which is somewhat better detailed than JDP, but their actual "testing" is a joke.

    The last time I checked a wood/leather steering wheel for an S-Class was $840.00 option, not 10K. Please read up on what you get with the Designo package before giving such incorrect information. Designo editions are very much overpriced, absolutely no argument from mere there. They aren't "standard" in other countries either.

    There is something to be said about making a wood and leather steering wheel standard and call it an advantage. It says something about whats important to those respective brands.

    ljflx,

    "Lastly I never thought the S-class had much road feel or driver feedback which is the biggest mis-representation I've ever read on this board.In fact it and the Lexus were very close in every way. That is the biggest joke of all because if you bash the LS you are also bashing the S-class because they are so close in the essence of what they do and do so well."

    Couldn't be more wrong, if that were the case the much cheaper LS would have ran the S-Class off the market long time ago. They don't drive the same, nor do look and feel the same. The vast differences of opinion (from owners too) on this board should illustrate that to you. I don't expect anyone from the Lexus crowd to understand anything about chasis dynamics as it's not as important as stereos and nav systems. Yes these two cars are similiar in mission but how they get there is different. And as far as bashing goes, style wise the S doesn't get anywhere near (if any) the bashing the LS does....probably their biggest difference of all, styling.

    M
  • habitat1habitat1 Posts: 4,282
    I have to respond to your quote:

    "...Lexus appears to appeal to the same conservative geriatric crowd (thus explaining its uninspired styling) that Cadillac aspires to. Lexus has substantial brand loyalty and that's why most of the trade-ins are from previous Lexus owners. It seems to me that the people who are attracted to Cadillac would also be attracted to the Lexus."

    As I said, I'm more in the E-class / 5-series / GS buyer category. But for you to make that claim is particularly funny to me. You make it sound like Mercedes is some "hip" company and Lexus should diversify into the funeral parlor business.

    May I point out, Mercedes offers no E-class or above, or AMG cars with a manual transmission to compete with BMW. A E55 6-speed would have great appeal to me, but alas, only the M5 will allow me that option. The $50k+ SLK32 is a cure for insomnia compared to the driving dynamics of my $32k S2000. In my car shopping experiences, I have consistently been told by Mercedes dealers that "we tend to appeal to an older, more conservative demographic, especially here in America". I'm in my late 40's and a Republican. Who the hell are they talking about?

    If you think driving an S-class instead of an LS makes you feel younger, by all means go for it. But your position about the age/appeal issue is pretty funny from my perspective.
  • ljflxljflx Posts: 4,661
    When was the last time you drove an LS430 that you are an expert on it? The new model has more road feel and a tighter suspension than the 2000 and earlier LS400. The 2004 has increased that even further from what I've read. I drove these cars extensively in 2001 and they both isolate you from the road. Don't agree with you at all and I will use my own personal experience here.
  • boo20boo20 Posts: 85
    Hey don't be so sensitive. I'm not the one who initially claimed that MB appeals to an older crowd (now he denies that was his meaning, OK). That was someone else. I was just responding with facts as opposed to speculation that it's actually Lexus that has the older demographic.

    As I've said before there is nothing wrong, whatsoever, in appealing to the geriatric crowd. Nothing to be ashamed of. If anything it puts Lexus' styling strategy into perspective.

    MB also appeals to the more mature person. For one thing they are so expensive that few young folks can afford them. That doesn't mean that younger people don't aspire to them however. Look at mbworld.org for example. Lots of young people on that board hoping one day to own an MB.

    Hey no offence intended. I'm middle aged too.

    Hold the Grey Poupon and pass the Dentu-cream and Ben-Gay.
  • From the same consumer Reports article you quoted (Nov. 2003 pg. 57)

    "1 Lexus LS 430

    The LS430 is hard to fault, other than for an unexciting character It's refined, comfortable,relaxing,and reliable, and provides effortless performance. Its base price is $55,125. To equip it similarly to the other cars here, we added the optional $12, 485 Ultra Luxury package, which raised the price to $70,447-still the least expensive of this months group."

    Also in the same article on page 56.

    "The Lexus LS430 was not only the least expensive of the group but also scored the highest and is the only car we can recommend."

    ALSO NOTE:..I believe it was the 2003 that was tested and not the 2004....

    Finally the reliability rating for the LS was their best rating and the rating for the 745I and the S430 were their lowest.
  • lenscaplenscap Posts: 854
    JD Power today announced the results of their 2003 APEAL Awards and Lexus finished on top in a few categories. For those that don't know, the study measures "owners' delight with the design, content, layout and performance" of their new vehicles.

    Lexus won several awards including the #1 nameplate (Porsche was #2 and BMW #3) and the LS 430 was the highest ranked premium luxury car (Mercedes SL was #2 and BMW 7 Series #3).
  • I came across this article, and thought that it might be of interest to you.

    http://www.chiefexecutive.net/depts/executivelife/192.htm
  • sysweisyswei Posts: 1,804
    The study lenscap mentionned "is based on responses from 102,975 new-vehicle owners. The study, now in its eighth year, is based on eight specific categories of vehicle performance and design that identify what consumers like and dislike about their new vehicles during the first 90 days of ownership. The areas are: engine/transmission; ride, handling and braking; comfort/convenience; seats; cockpit/instrument panel; heating, ventilation and cooling; sound system; and styling/exterior."

    Notice that quality/reliability is NOT included, but Lexus still places first both as an overall nameplate and in the luxury sedan category.

    To see the details, go to http://www.jdpower.com/cc/auto/releases/index.asp?catid=1, click "Lexus" and then click one of the blue icons under "awardees" or "press release".
  • sysweisyswei Posts: 1,804
    ...including some mainstream models. Today's Wall Street Journal published data on dealers' days supply (i.e., days worth of cars on the lot):

    "Honda Pilot 9
    Mini Cooper 10
    Toyota Sienna 11
    Mercedes-Benz SL-Class 12
    Lexus RX 330 12
    Honda CR-V 13
    Acura TSX 14
    Acura MDX 15
    Honda Odyssey 15
    Nissan Quest 16
    Audi A8/S8* 16

    For the month of September. Rankings are based on the number of days vehicles stayed in stock at about 3,000 dealerships around the country, starting with the vehicle that moved the fastest. Models on sale four months or less, or no longer in production, are excluded.

    Source: Power Information Network LLC, an affiliate of J.D. Power & Associates"
  • sysweisyswei Posts: 1,804
    About JDP's long-term reliability studies, I think you're the one that is "blindly" assuming that the study doesn't cover items that you mentionned, such as transmissions. JDP's release on the VDS says "The 2003 Vehicle Dependability Study is based on responses from more than 55,000 original owners of 2000 model-year cars and light trucks. The study covers 147 specific problem symptoms grouped into nine major vehicle systems."

    147 potential problem areas...what makes you "blindly assume" that transmissions are not included? What makes you think that a company that (1) was founded in 1968 and (2) has done the VDS since 1990 and (3) that gets feedback from the auto companies that pay big bucks for its research, feedback that presumably includes ideas for what questions might be included in the standard surveys...

    ...somehow would be stupid enough not to ask about transmission problems?
  • boo20boo20 Posts: 85
    Visit your local MB dealer. Just try to get a NEW SL500. Not a 2003 model that's used. See if you can pick one off the lot in the same way I could get an SC today. You might be able to do it for an SL55 as these cars are priced in the stratosphere and the market for them is not as large.

    The market has indeed spoken. MB, at a higher price point and with worse reliability, has waiting lists for some of their cars.

    Lexus does not.

    That, in itself, should tell you something about the public's perception of prestige and desirability.
  • sysweisyswei Posts: 1,804
    As I've said before, MB does indeed offer higher prestige, but this isn't exactly Lexus' fault, as it is rather hard to build prestige and brand equity in a 14-year span.

    As for the SL, I fully believe that some dealers have 0 stock...but some must have more than 12 days worth, so that the mean works out to 12. And it does say SL Class, so the S55 would be included. I highly doubt that used vehicles are included, but you can check the the PR department at JDP if you want.

    If you still doubt the numbers, I guess it is your choice to ignore hard data gathered from a large sample of dealers by an independent and (presumably) unbiased source. It is your choice to ignore facts that aren't in agreement with your preconcieved view of the world.
  • habitat1habitat1 Posts: 4,282
    I think you missed my point. I'm not personally sensitive to your comments about Lexus being aimed at the geriatric crowd. I don't own one and probably never will. It's just my impression that you, as a Mercedes advocate, are the kettle calling the pot black in this case. I see no difference whatsover in the S class vs. LS buyer demographic - at least age wise. And Mercedes dealers make no apologies to a "middle age" guy like me when they indicate they are going after a more conservative (i.e. older)buyer than BMW.
  • ljflxljflx Posts: 4,661
    That's bad business in my book. It means you didn't properly anticipate demand or you have a production problem and couldn't manufacture the intended supply. Either one is a mistake. Since only a small percentage of customers put themselves on waiting list with an intent to wait for long (virtually all go elsewhere either initially or a month or so later) it means you most likely lost a customer. That is not something to be proud of.

    If the SL has a 12 day supply - how does it have a waiting list? Shouldn't a waiting list mean a negative figure of some sort??
  • sysweisyswei Posts: 1,804
    The designo editions and what you really get for the money...

    This analysis turned out the be easier with the S600, since the S600 is already outfitted to a very high degree. On the S600, for $8900 spent on the designo package, as far as I can tell the only things you get are:

    - different color exterior
    - different color interior (leather color and different wood...elm or poplar, neither of which is an expensive wood)
    - steering wheel and shift knob have nappa leather rather than regular leather (nappa leather seats and interior trim are already standard on the S600)
    - leather trim on floor mats

    A total ripoff.

    My source for the above was http://autos.msn.com/advice/pricereport.aspx?modelid=3384

    As far as the designo colors being available standard in other countries, I swear I saw something on the MB site that implies this, but I can't find it now. But if you go to MB's UK site, you will see that ALL the colors offered there are available standard (i.e., no extra-cost colors). Unfortunately, the color names are different and the color samples are too small to really compare to the US designo colors.
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