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High End Luxury Cars

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  • merc1merc1 Posts: 6,081
    My point is that most of Mercedes' lineup is above 50K, not under it. They only compete side by side with 2-3 Lexus models in price, the rest are priced above the bulk of where Lexus gets the bulk their sales from.

    The RX and ES are only 2(!) models from Lexus and they just happen to be their most popular and they costs less than the bulk of Mercedes' models msrp. Look at the price configurator at Lexus and then Mercedes. If you don't see where there are more Mercedes over 50k compared to Lexus then I don't know what else to tell you. You're saying that this has no bearing whatsoever on who sells more cars overall? Come on now.

    The LS vs the S is a simple case. The average LS sells for 55-65K, this is less than the base price for the S-Class. You can't tell me that this fact has no affect on sales. There is no way every LS buyer can just say oh 75-83K for base S430 or S500 is no big deal. Price limits this decision for some LS buyers, not all. Not ever S-Class buyer can afford a Bentley either.

    The sales race will probably always be won by Lexus or BMW, they have much cheaper cars if you average their MSRP's.

    syswei,

    Wait a minute. Didn't someone just say that styling has nothing to do with sales? You Lex guys gotta get on the same page. I seriously doubt styling is the issue because the E has always outsold the GS.

    M
  • sysweisyswei Posts: 1,804
    I don't recall anyone here saying styling doesn't affect sales.

    As far as the E/GS, of course as with all MB models, prestige is a factor too. But if the sales difference can't be explained by the combination of styling and prestige, what else would account for the difference, in your view?

    Annecdotally, I actually considered both the E and GS in 1998. My wife was really taken by the oval headlamps and felt at the time that the E offered very unique styling; she kept referring to it as the 'frog-eyed car'. Neither of us cared for the GS's styling. BTW, I didn't like the E's transmission, I felt it shifted inappropriately. Anyway, we ultimately got an RX, basically for the 'utility'.
  • maxhonda99maxhonda99 Posts: 1,289
    merc1,

    You obviously don't get what you yourself are saying.
  • merc1merc1 Posts: 6,081
    I think it is pretty clear, others got exactly what I'm saying. I see your point about the RX and ES, but they are only 2 models. If you clearly don't see where the pricing structure of MB would inhibit overall sales then forget everything I've said because you'll never get it. You're pointing to 2 Lexus models out of what 7(?) compared to 2 out of 9 for MB, most of which are price higher. You honestly don't see this? Only the ML and C are even competitive with Lexus pricewise. What about the SL, CL, S, G, the AMG models, the CLK Cabrios? They do try to move these too, while costing way more $$$$.

    The average msrp for a Benz is higher than it is for Lexus. I don't see how it could be any simpler than that.

    syswei,

    Styling and sales....read back a few posts, this whole round got kicked off on just that point. Anyway that pales in comparision to you having considered the E-Class in the past! You did it again, I'm baffled by that.

    The E and GS in sales.........hmmm. Prestige, styling, depth of models, more recognition in the segment (the E has been the top seller since the mid-90s in the med-luxury market) I'm sure all have something to with the E outselling the GS. But I think the biggest mistake was that Lexus decided to go after BMW's 5-Series in the "sport" game. I don't see Lexus buyers lining up to buy a sports sedan in the middle segment, or any segment. The GS and IS have proven this year after year. It certainly isn't because they cost too much, the LS outsells the GS and the ES the IS, clearly Lexus buyers prefer luxury over sport even though the LS and ES cost more than the GS and IS. The GS400 was only about 7/10ths BMW 540i and nobody shopping for a Lexus seemed to care. The milder GS300 was bought like 3 to 1 over the GS400, and the LS400 and now LS430 isn't all that much more money, but is a lot more car than the GS430..so the GS430 and (base) LS430 models might be to close together. Just some of the reasons I see. I think overall the Lexus image is too stuffy to sell a sports sedan in any great numbers. The Lexus owners on this board have proven not to care one bit about "sport" when it comes to their sedans. This theory will be tested with the next IS. They're going all out this time around. No more re-badged Toyotas.

    M
  • ljflxljflx Posts: 4,661
    Understand your point on pricing and agree with it for the most part. But when you consider your points and all the MB niche car points we've discussed it shows pretty clearly what is wrong with MB's strategy. They are trying to be a volume producer and a boutique high-end car maker at the same time and the two strategies work against each other. Too much volume kills the status icon (over time) and has yielded all these reliability problems. Lower volume with high quality (the MB mantra all the MB enthusiasts wish they would go back to) supports the high pricing and the status icon. So which way do they go? At the 50.000 foot level it's pretty clear to me they can't go both ways. But at the same time can they watch Lexus increase scope and creep deeper into their lineup and niche car territory while at the same time making a "true" thrust at Europe? Remember also they have to match and/or stay ahead of their true European nemesis - BMW. It's a soap opera.

    Lexus' biggest mistake is trying to take on BMW at the same time as MB? Never made sense. Moving off the initial strategic plan is always a problem no matter who you are. The IS is out of the mainstream and lacks the internal support (marketing dollars, budget support, etc) to make it a success. The GS needs to be addressed as it is the only real weakness in the "strategic mainstream" car line-up. The LS and ES hit their marks very well and the RX is a runaway success. The SC has varied too much over time for it to establish itself firmly but it sells about the volume they were expecting anyway. Long-terrm though - it's a key branding car for them just like the SL is for MB. Sellling 45k larger suv's annually at $50-70k is also quite an achievement. Time will tell if the next GS will cut it. You know my initial reaction and I've yet to see the car. But I'd also expect a lot of surprises with the next GS. I do think the next LS will be an absolute smash. I could be wrong but it's also why I think they really have moved the LS production date up to 2006. They want it to support the GS and at the same time it does not allow the S-class to have a one year lead time like the last go-round.
  • maxhonda99maxhonda99 Posts: 1,289
    "The average msrp for a Benz is higher than it is for Lexus. I don't see how it could be any simpler than that."

    Basically you're saying Lexus sells more cars because they are cheaper overall, correct?

    Do you have factual data to backup your claims? for example do you have factual data that says the LS430 outsells the S-class due to price? If that is the reason, why didn't the LS430 outsell the more expensive S-class by a huge margin in 2002 & 2003? After all, as you say the LS430 sells because it's cheaper. How about the GS300/430? Shouldn't that be outselling the E-class? The SC430 outselling the SL?

    And yet again, I gave you 2 examples in the Lexus and Mercedes line that go head to head where your claim of lower prices selling more Lexus' simply don't hold water.

    "If you clearly don't see where the pricing structure of MB would inhibit overall sales then forget everything I've said because you'll never get it."

    You can try and theorize how lower prices help increase sales volume at Lexus which I basically disproved with the C vs ES and ML vs. RX.

    And people could theorize that with the much larger product range that Mercedes has(which BTW, would mean MB should be reaching more customers), Lexus is simply selling more cars that Mercedes because they are actually building cars that more people want. Otherwise, I can't quite understand why a similary priced RX330 outsells the similarly priced ML350 by over a 3 to 1 margin. Or how a lone ES330 outsells the entire C-class range(from the under $30K hatchback to the C320).
  • sysweisyswei Posts: 1,804
    Consistent with the data showing Asian manufacturers gaining share of sales in Europe, Automotive News had this on worldwide sales: "As a group, automakers based in Asia sold 24.7 million cars and trucks last year, up 9.0 percent. Automakers based in Europe sold 19.5 million vehicles, down 1.0 percent. And manufacturers based in North America sold 15.3 million vehicles globally, down 1.5 percent."
  • People who buy S class and LS 430s can pretty much afford what they want

     The $20,000 difference between a LS 430 Ultra and a well equiped S class would have no importance if the LS was not equal or better in quality and/or dependability.

    I would think it is impressive how long the Star has keep S Class sales up....

    As to styling, I would say that if LS copied the MB styling and is now outselling them because MB discontinued that style...WELL...Maybe MB should go back to a style that was so good it was worth copying...ON THE OTHER HAND

    ... you could say that even with the S class new very beautiful styling and LS with the old not so beautiful styling ...WHY is S class declining in sales while LS is going up?
  • ljflxljflx Posts: 4,661
    I think merc1's arguments are simple monetary demographics. The cheaper something is the more buyers it can attract. It's far too logical an assumption to argue with as far as I'm concerned. There are simply more people that can reach the price point of an LS430 than can reach that of an S-class - particularly the $85K S-500. Thus it should sell more based on those broad paramaters. There are many other variables of course that do enter into it.

    Unlike BMW I've not seen MB subsidize leases. I said before I could have had a 7 for the price of an LS430 lease even though the cars were more than $10k apart. I've never seen such a deal on an S-430 nor was I the least bit interested in the 7 despite the lease discount. Nevertheless I pay attention to the pricing in this segment because its predictive of the future. What it tells me is LS430 prices will rise or there will simply be added options that will increase price whereas 7-series prices are probably going nowhere. The S - not sure probably staying as is or increasing slightly. Personally I think it has held up well - far better than the much newer 7.

    With all that said - there are definitely a substantial core of buyers for both cars (plus any other car in this segment) that can afford either (or again any other car here). That's why Lexus has easily moved the average price into the $62-66k area. It used to be $55-59K prior to 2001. On the other hand MB had to drop the price of the S-class in 2000 or they would have had their lunch eaten. They would never have done that if price was no object.

    But there is no question that the LS430 has moved way upstream from 1990. I've never heard merc1 deny that or even hint that is not the case. Heck I know two LS430 ultra owners that can own a dozen Maybachs at the drop of a hat. I don't think that type of buyer was in the Lexus demographics in the early 90's though.
  • oacoac Posts: 1,594
    At the $70K price point, I do think *many* (not all) buyers can truly afford either an S or an LS. Prestige would favor the MB, reliability and build quality would favor the LS. So the age-old question: IS the LS selling more becos it is cheaper than the S despite the *styling* advantage of the S over the LS ??? Styling is, IMHO, the least bit of a reason to buy a $70K car, there is a lot more than mere aestethics at this price point. Prestige may actually rank way up on the list. Methinks that Lexus has actually risen almost to the same level of MB such that people buying LS believe that owning a Lexus gives them a lofty status about equal to owning an MB. Listen to your colleagues, friends and acquaintances compare your Lexus with an MB. They often have equal admiration for both cars. These people count way more than the beffudled eyes and opinions of a few individuals here who don't even own any of these name plates... In my neighborhood of solid upper-middle class folks, there are cars of all shades of luxury, but are mostly either Lexus (LS) or BMW (3- and 5-series), with a couple of MBs (mostly E and one CLK). Proves nothing, but that people that can afford MBs often choose other brands and may well account for the loss of sales in MBs, besides its higher prices....
  • sysweisyswei Posts: 1,804
    Some months back we got into an extended discussion about higher prices vs higher prestige and their effects on MB sales. Basically I gave up on discussing it after we couldn’t see eye to eye. Maybe I’m bored or something, but here I go again.

    It is an economic truism that, EVERYTHING ELSE BEING EQUAL, a higher priced product will sell fewer units. However, in the case of MB vs Lexus, everything else is manifestly NOT equal. In particular, we all agree that MB has higher prestige than Lexus, based in part on 114 years of heritage. This is something that Lexus just can’t do much about.

    Two products, A and B, that are identical to each other in all aspects of desirability should sell in the same quantities if priced the same. Two products, X and Y, that are identical in all aspects of desirability EXCEPT for prestige, will NOT sell in identical quantities if priced the same. The higher prestige product, let’s say X, will sell more units, if X is priced the same as Y. It follows that X could be priced at some level HIGHER than Y and still sell the same number of units as Y, so long as the price differential is in line with the perceived extra value accorded the additional prestige.

    Put another way, suppose there were a Ferrari and a Kia that were identically desirable in all respects except for the brand/prestige. If the Ferrari were priced only 1% higher than the Kia, do you still think the lower-priced car would sell more units? I don’t. I think the Ferrari badge is worth something between 10% and 50% more than the Kia badge.

    Back to MB and Lexus. You keep pointing out that we shouldn’t compare MB units to Lexus units because MB has higher prices in some lines. What I’m saying is that there is an offset to this, namely the higher prestige that goes with the MB nameplate. MB really SHOULD be able to charge higher prices, because of its higher prestige. Prestige has a value that people are willing to pay for. Now, pricing would be a more legitimate handicap if they were trying to OVERcharge for it, but we don’t know that. We don’t really know exactly how much the prestige of an S is worth in comparison to an LS.
  • seminole_kevseminole_kev Posts: 1,722
    any of you guys ever watch "Groundhog Day" with Bill Murray?

    ;-)
  • ljflxljflx Posts: 4,661
    OAC - I think the prestige factor is less and less important and I think its narrower than ever anyway. When I cross- shopped I had to move to the S-500 because the S-430 was unimpressive and it cost more to begin with.

    syswei - I think Lexus pretty much hits their mark in every car except the GS and IS. I like the styling of the GS in general but it falls short of the E by a decent margin. This is a crucial line-up car and Lexus has not given it its proper investment. Unlike the LS this car needs to meet the targets of a wide audience from someone who wants to put a ton of sportclad metal and tuning gear on it to to someone who keeps it sterile. Cut into the marketshare of the E and 5 here and you really will hurt MB and BMW. But Lexus fails badly in that arena because of its singular approach (whereas MB and BMW excel) but I have no doubt that Lexus is about to change that reality and perception like night and day. Plus I think the hybrids will be a major differentiating factor in the future. Combine that existing lack of investment thought with the fact the GS hasn't even been refreshed in recent memory and you have a key line-up car that falls short. But as I said I think that's about to change.
  • sysweisyswei Posts: 1,804
    I think merc1 suggested that one of the GS's problems is that it is being marketed, to some extent, as 'sporty', and that this might have been a mistake on Lexus' part. I see his point. Even the original, in 1992, was marketed as a 'sport sedan'...even though I believe it was slower, 0-60, than the LS of the time. I think I remember a marketing tagline that went "something wicked this way comes" (or was that in 1998?) The E other hand I perceive as being marketed more as a mainstream luxury car, with the AMG variant taking on the sporting role.

    Anyway I agree with you that the new GS offers some hope, especially once it goes hybrid. Styling wise, however, I still...based on pictures only...don't see it as especially pretty.
  • ljflxljflx Posts: 4,661
    Merc1 is dead on here. They should have just gone after the E crowd rather than try to take on both brands with a car that was too narrow in approach.

    I will have to see the new GS in person. The pix didn't do much for me but my cousin said the car drew tremendous attention at the NY show and he loved it. Plus the auto rags are giving it a lot of high marks. Let's see.
  • Kirstie@EdmundsKirstie@Edmunds Posts: 10,676
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  • merc1merc1 Posts: 6,081
    There is no data to show what is common market sense. You still haven't taken a look at the overall lineup of Lexus or Mercedes. If you did that you'd see what I'm talking about. Your theory about sales ignores price completely. No where did I say that the LS430 outsells the S-Class because of price alone....I said price is one of the main reasons the LS outsells the S. You're acting like everyone who buys a LS can just say ok to another 20-30K for an S-Class. Not true.

    Cars outsell other cars for varying reasons and you know this. I think you know full well that the E-Class is new and the GS is old and that is main reasons for their sales postions, right now at least. I've also stated a many times that when a car like the S-Class or LS get a facelift their sales shoot through the roof during that year. This is backed up by fact, just look at the LS this year and S-Class last year.

    My point about sales is one dealing with the entire lineup from MB and Lexus and I'm sorry if you can't see the huge price differences that exists between these two brands...once you get past the 30-55K models. You pretend as if the SL, CL, AMG models and the S500 and up don't exist when it is time to count up the sales and that these cars aren't at a disadvantage when it comes to price. Lexus doesn't even compete in the space above 70K. How can this be a level

    "And yet again, I gave you 2 examples in the Lexus and Mercedes line that go head to head where your claim of lower prices selling more Lexus' simply don't hold water."

    And they are just that 2 examples, not the entire lineup.

    The RX330 is brand new and the ML is old, this is exact same reversed when it comes to the GS and E-Class old/slow sales, new/high sales.

    Mike this also applies to your question also, simple market trends...the S is no the oldest car in the group and the LS just got a facelift. See ljflx's post right after yours....it's really very simple.

    syswei,

    None of that matters one bit if the person buying can't make the jump from a 55-64K LS430 (the bulk of LS sales) to a 74K S430 or 83K S500. Prestige means nothing unless they buyer can actually come up with the extra money. Your theory has always assumed that this is not an issue, and that isn't realistic at all. And please don't take this like I'm saying LS buyers are broke or don't have money, quite the contrary, but not all of them can make the jump...especially those who barely got into a base LS, and S-Class isn't an option for them no matter what the S-Class' prestige level is.

    M
  • merc1merc1 Posts: 6,081
    I understand your point about exclusive models vs. volume models, but it can work if the quality and reliability is there across the board. What a lot of Americans forget is that Mercedes was always a volume maker, just not in this country. The volume doesn't kill the status, the below 30K models does. They've always been volume just not at some of the price points they're trying to hit with the C230 Coupe and what not. They should stick to 33K V6 models upwards.

    I don't see anything like night and day happening with the GS. The new car is more or less the same as the old car, sporting and they're already talking about how sporty it is going to be, a mistake. BMW drivers aren't going to embrace the car for that purpose.

    As usual very good points in your posts.

    M
  • merc1merc1 Posts: 6,081
    For all those who think price has no effect on sales. Here is just a quick look at MB and Lexus model pricing.

    Mercedes-Benz:

    There are 37 Mercedes-Benz models on their site right now..the avg price = $67,646.

    Or by each class:

    C-Class - $26,570 to 52,170 with 8 models. Avg C-Class price = $35,076.
    E-Class - 48,795 to 79,270 with 6 models. Avg E-Class price = $57,807.
    S-Class - 74,970 to 123,620 with 4 models. Avg S-Class price = $98,245.
    CLK - 45,720 to 80,670 with 6 models. Avg CLK price = $60,861.
    CL - 94,120 to 127,470 with 3 models. Avg CL price = $113,386.
    SLK - 40,320 to 56,170 with 3 models Avg SLK price = $47,420
    SL - 89,520 to 126,970 with 3 models. Avg SL price = $112,420.
    ML - 36,670 to 47,120 with 2 models. Avg ML price = $42,895.
    G-Class - 77,620 to 94,170 with 2 models. Avg G price = $85,895.

    There is no ML55 and one model in the C-Class is the 2004 C32, the 2005 C55 hasn't been released yet.

    Lexus has 10 models from $29,980 - 65,100. Average price = $44,968.

    These models include the GX470, GS300, GS430, LS430, SC430, ES330, RX330, IS300 Sedan, IS300 Sportback, and LX470.

    The average Mercedes-Benz is $67,646 compared to the average Lexus at $44,968 and this doesn't make a difference because of prestige? I can't believe anyone here believes that.

    I didn't even go into 4Matic MB models and which tranny the IS has or whether or not you select the FWD or AWD RX330. When you include every trim the average Benz price only rises even higher while Lexus' stays about the same.

    The bottom line is that once you get past the C/E/ML and CLK from Mercedes and the ES/IS/RX/GS from Lexus these two are NOT playing the same pricing game. How on earth could sales ever favor Mercedes is beyond me. Prestige doesn't mean anything if you don't have the loot to step up to an S, CL, SL, or G which Lexus has nothing in the same range, price wise.

    Lexus only has the LX and LS that play above 55K, while MB has the S, CL, SL, G, and certain E/CLK models. How could this pricing not affect MB sales?

    Just a quick glance at Audi, Jaguar, BMW, Acura, Infiniti, Cadillac and Lincoln's websites reveals that nobody else is even close in pricing. BMW comes the closer than anyone else, but they don't have the depth of models. Despite selling the largest number of expensive cars MB is either 3rd or 4th in sales and that is seen as a crisis or some type of failure. That is ridiculous. Just looking at their pricing alone they shouldn't even be a contender in the sales race.

    To suggest that MB having more models means they should be reaching more customers is not valid either. These models that they have "more" of are mainly skewed towards the top end not the bottom. The buyers get thinner as you go up and MB's lineup is weighted towards the top end. Everyone can afford a C or ML or most E-Class models, but this isn't the case for a S500, or any CL, SL or most AMG models.

    M
  • maxhonda99maxhonda99 Posts: 1,289
    merc1,

    All I have to say is your theory is obviously flawed of looking at the entire line-ups and averaging the prices. Each lineup is made up of numerous components(models) and saying the sales are higher because price is lower is B.S.

    "The RX330 is brand new and the ML is old, this is exact same reversed when it comes to the GS and E-Class old/slow sales, new/high sales."

    And this isn't flawed thinking?
    1) The original RX300 and ML320 came out at basically the same time with similar MSRPs. And the RX300 even outsold the ML 2 to 1 to 3 to 1 margin.

    2) Funny thing is, even when the GS300/400 was new in 1998 it was outsold by the 2 year old E-class by about a 2 to 1 margin. I don't see the cheaper price of the GS helping it outsell the GS from 1998 to current.
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