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High End Luxury Cars

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  • merc1merc1 Posts: 6,081
    Not much of an excuse, because both companies had SUVs by 1999. The LX450 was introduced in Jan 1996 (and btw surpassed Range Rover in the space of 2 months), while the RX300 went on sale in the spring of 1998.

    Totally irrelevant. The LX450 was and still is (LX470) a low volume seller with a much higher price than the M-Class which was priced like a mainstream SUV back in 1998, and the LX450 was not. The M-Class was the first mainstream priced SUV from a luxury car maker, hence it putting MB on top until others joined in. Plus the MB M-Class while seemingly sound in concept wasn't what the market wanted. It wanted a more car-like ride like the RX. Plus in 1999 the ML was hitting its stride like the RX did in later model years.

    There is no way around the fact that Lexus' SUV sales are what put them on top.

    So both companies competed in SUVs in 1999, as they do now. Yet the relative sales (cars+SUVs) have swung by 43% in Lexus' favor in the past 6 years.

    Have you ignored everything from the previous post? It is SUVS that have done this. The RX and the GX. Mercedes had basically nothing to compete against this. Lexus' car sales aren't what has turned the tide. Well those SUVs and the ES330, which I can't see any European luxury car brand seeing as competition.

    We can re-visit this once the M, R, and new GL are all in place.

    M
  • merc1merc1 Posts: 6,081
    Do you see a trend here?

    Yeah I do. Lexus having introduced a new key sedan this year is what I see. They went from about 8500 unit sales of the GS last year to double that already this year because of new car. Mercedes didn't introduce a new version of one of their volume cars like the E, C or S this year. The CLS is too impractical to sell past the 2K per month mark, if you were going to bring that up. This is not some type of long-term crisis or downturn at MB like you're trying to imply. Lets go over this again the next time MB introduces a new E, or C-Class or even after they introduce the new S-Class. Now if they don't increase car sales on top of the introduction of one of those new key cars then you might have a point, until then you don't and just reaching for something that isn't there.

    M
  • sysweisyswei Posts: 1,804
    Lexus having introduced a new key sedan this year is what I see.

    Oh, so now we should exclude the contribution of new models from sales performance? I think you're the one "reaching for something that isn't there" (to use your words). Here are the facts:

    For Lexus, the GS has contributed an incremental 13,801 units to 2005ytd sales.

    For MB, the CLS and SLK have contributed an incremental 14,092 units to 2005ytd sales.

    So it is MB, not Lexus, that has been helped (slightly) more by new models.

    The fact remains, whether you adjust for new models or not, and whether you include SUVs or not, Lexus has gained significant share vs MB in the last 6 years. There is a long-term trend there, whether you wish to see it or not. IMHO, MB needs to turn around its reliability if it wants to turn around that trend.
  • merc1merc1 Posts: 6,081
    Oh, so now we should exclude the contribution of new models from sales performance? I think you're the one "reaching for something that isn't there" (to use your words). Here are the facts:

    For Lexus, the GS has contributed an incremental 13,801 units to 2005ytd sales.

    For MB, the CLS and SLK have contributed an incremental 14,092 units to 2005ytd sales.

    So it is MB, not Lexus, that has been helped (slightly) more by new models.


    Wow a whole 291 units. Some trend. The GS has far more potential than the CLS and SLK by virtue of it being a 3-box sedan unlike the CLS and especially the SLK. What was the point here again, I honestly have forgotten because this is silly imo.

    The fact remains, whether you adjust for new models or not, and whether you include SUVs or not, Lexus has gained significant share vs MB in the last 6 years. There is a long-term trend there, whether you wish to see it or not. IMHO, MB needs to turn around its reliability if it wants to turn around that trend.

    And the fact also remains that Lexus sells at cheaper price points overall model for model (in almost every case) compared to MB. MB has also grown in the last 6 years also, just not at the pace of Lexus has. Price and not having 3 SUVs to pad their bottom line with have much more to do with that than some surveys that not everyone worships. The Germans missed the SUV craze, plain and simple.

    To stop the trend you're talking about they would need to lower prices, not gonna happen.

    M
  • ljflxljflx Posts: 4,687
    "The thing is it hasn't happened yet nearly on the scale of which we have to read about every few months."

    You go from making $2.5bln a year to losing money in 3 years and you don't think that is a serious downturn. Your cars are placed at the lowest end of reliability studies and customer satisfaction studies when they historically occupied the exact opposite space and you don't think that is a serious downturn. Now resale values have fallen through the floor when they were at the exact opposite end of the spectrum and you don't think that is a serious downturn. MB is being crimped on all sides. Higher production costs, big warranty repair costs, retention writeoff because leased cars were worth a lot less than the lease retenion values, too big a line-up to maintain successfully etc etc. i could go on but I'll leave it there. The one thing every CFO or knowledgable Wall Street analyst looks at is a little term called "Incremental Margin". Most non-financial people don't know what it is until it hits them in the wallet. But it's real simple. In laymans terms it means the last car you sold was more profitable than the car before it and far more profitable then the 10,000th car before it. You don't need to see sales cut in half, or a third, or even a quarter to bring on a serious downturn. 10% will do it, because that 10% is contributing tremendous incremental margin/prtofits to the business. Combine that with the high cost structure of a brand like MB, the increasing warranty and rcall costs plus the out of control costs to maintain so many model variants and it happens fast.. It's happened right before our eyes already and you are reading about it every three months because every three months the fundamentals and the numbers are worsening.
  • sysweisyswei Posts: 1,804
    Of course if MB lowered its prices, it would help unit sales. And if Lexus magically attained MB's prestige, it would help unit sales.

    But I'll say again, MB's prices have nothing to do with the trend of relative sales declines vs Lexus, because MB's prices were high both at the end and at the beginning of the period. If MB had raised its prices more than Lexus during the period, then you would be able to point to price as an excuse for the relative sales performance.
  • sysweisyswei Posts: 1,804
    Wow a whole 291 units. Some trend. The GS has far more potential than the CLS and SLK by virtue of it being a 3-box sedan unlike the CLS and especially the SLK. What was the point here again, I honestly have forgotten because this is silly imo.

    I wasn't pointing to the GS as a trend, silly. I pointed out that even excluding SUVs, Lexus' sales are up 45% in 6 years, vs 20% for MB, and you brought up the GS in an attempt to explain away Lexus' performance. I just pointed out that MB has been helped slightly more by the CLS and SLK than Lexus has been helped by the GS. You can forget about the GS/CLS/SLK line of discussion, and just focus on 45% vs 20%.
  • merc1merc1 Posts: 6,081
    But I'll say again, MB's prices have nothing to do with the trend of relative sales declines vs Lexus, because MB's prices were high both at the end and at the beginning of the period. If MB had raised its prices more than Lexus during the period, then you would be able to point to price as an excuse for the relative sales performance.

    Mercedes' sales haven't declined. They have grown every year for the last 10+ years. They haven't grown at the rate of Lexus' because of price and because they didn't have 3 SUVs to produce the growth. The trend has been for a while now, towards SUVs, which Mercedes only had one of, and that one was flawed.

    The Prestige theory doesn't pass muster because you're simply trying to say prestige can account for those who can't afford to buy one of the 70K+ models Mercedes has on offer, which sell above the price of any Lexus.

    Price is far more real than prestige. One can either can afford to buy up or can't, doesn't matter what one thinks of the car.

    M
  • merc1merc1 Posts: 6,081
    Again, lots of business stuff that average consumer couldn't care any less about.

    When I said that you have been predicting this major downturn I was talking about your prediction when it came to sales, not corporate matters. You act like buyers care about any of that stuff you just posted, they don't.

    Did I say that everything was ok at MB at the corporate level? No. I said that buyers don't care about any of that irrelevent stuff that you just posted. It doesn't have anything to do with most people buying the car of their choice. People don't care about any of that and this great fall you always speak of in sales, prestige or the ability to sell cars at higher prices than the competition, hasn't happened, at least not yet.

    M
  • ljflxljflx Posts: 4,687
    As good a post as I've read on Edmunds and so accurate..

    Brightness - great posts also.
  • merc1merc1 Posts: 6,081
    I wasn't pointing to the GS as a trend, silly. I pointed out that even excluding SUVs, Lexus' sales are up 45% in 6 years, vs 20% for MB, and you brought up the GS in an attempt to explain away Lexus' performance. I just pointed out that MB has been helped slightly more by the CLS and SLK than Lexus has been helped by the GS. You can forget about the GS/CLS/SLK line of discussion, and just focus on 45% vs 20%.

    Well your post read like and gave numbers for the current year, so that is what I thought you were talking about. You'll have to produce the numbers for the last 6 years with SUV sales in order for me to believe that one. That would mean they're selling a lot of ES and LS models because both the IS and GS have never been that popular. Even if they are up that much on the car side, you'll turn around and say price has nothing to do with it, though nearly every Lexus car model is cheaper than every MB car model. So whats the point? Price won't factor into your analysis.

    M
  • sysweisyswei Posts: 1,804
    Mercedes' sales haven't declined. They have grown every year for the last 10+ years.

    I did say relative sales declines. Meaning if MB (ex-SUVs) is up 20% and Lexus (ex-SUVs) is up 45%, MB has posted a decline relative to how Lexus has done. They have lost share vs Lexus. Whether you look at "vehicles" (cars+SUVs) or just at "cars".

    They haven't grown at the rate of Lexus' because of price and because they didn't have 3 SUVs to produce the growth.

    I think I've addressed both of these points, more than once.
  • sysweisyswei Posts: 1,804
    Price won't factor into your analysis.

    Price doesn't need to factor into the analysis because it is a constant. MB was more expensive during the entire period, 1999-2005. MB was more expensive in 1990,1991,1992,1993,1994,1995,1996,1997,1998,1999, yet managed to outsell Lexus. MB was more expensive in 1999 than Lexus, and still is in 2005, so the price differential is a constant....yet the 6-year sales trend favors Lexus, even excluding SUVs.

    Honestly, I think your MB blinders keep you from grasping perfectly logical arguments. I've made my points, and if you can't accept them then I give up on getting you to accept them. End of discussion for me, unless you say something particularly outrageous.
  • merc1merc1 Posts: 6,081
    I don't accept your points about prestige making up for price because there is no way to prove that. Prestige only matters to those who can buy whatever they want, then it may have something to do with their purchases because price isn't as much of an issue. Until this is factored in and is also able to be measured then the prestige arguement isn't valid imo.

    How in the world anyone can expect Mercedes to keep up with Lexus' sales pace with a much pricier lineup because of prestige is not dealing in the reality of what most buyers can afford. If the E and S were priced like the GS and S, their sales would increase a lot. At some point price does become a factor to most buyers. Saying that prestige totally makes up for this isn't valid.

    M
  • ctsangctsang Posts: 237
    I am sure I will see you and all those MB owners by the side of the road or on the way to get the MB fixed. Good luck. When someone gets stuck by the side of the road, you think they care about how it drives? By the way, where I came from, MB are driven by chaffeurs.
  • sysweisyswei Posts: 1,804
    where I came from, MB are driven by chaffeurs

    Hong Kong?
  • ctsangctsang Posts: 237
    European auto industry IS in a lot worse shape than they are in. Read the news, my friend. It appears that you are from the past, not the present. Where have you been the last decade?
  • ctsangctsang Posts: 237
    You are right.
  • JTBENZ:

    Fact is a Lexus LS430 will blow the doors off of any S in it's Price range at 0-60 in 5.9 sec.....Even though it has 40 less horses....

    I have an Ultra and in the Sport and Power Modes it will corner and handle with any S class any-where near it's price range. ($71,000 MFSR) But not as well as a BMW 7

    I frankly have grown tired of the current Mercedes LOOK...The Lexus design is not flashy but it is timeless.

    Even Mercedes People concede the quality and realibility edge that LEXUS LS has over the equilivently Priced S..

    Finally I will admit that I am talking only about the LS vrs. The S...I am not crazy about the ES ...The GS is too small for my tastes...and I am one of those odd balls that just doesn't like SUVs........E and C and A and B and whatever May be better then the Equilivent LEXUS line...I don't know and Don't care...and this is the High end Luxuary board anyway.
  • oacoac Posts: 1,594
    Did I say that everything was ok at MB at the corporate level? No. I said that buyers don't care about any of that irrelevent stuff that you just posted. It doesn't have anything to do with most people buying the car of their choice...

    And you now speak for all car buyers, or only MB buyers in knowing what they care about when they buy their high-end cars ?? I can imagine many high-end lux car buyers quite savvy about *some* of the news surrounding MB. And if they think such news is bad enough, they may buy something else. Hence the lower growth rate of the MB brand over the past 5 years compared to, say, Lexus.....And if MB believes SUV will help pad their sales at this day and age, ain't they a tad late, don't ya think ? especially with gas closing on $3 / gallon ??? Maybe diesel or hybrid option will be a *fuel* (no pun intended) for future growth, eh ?

    What I find most interesting, thus far in your posts Merc1 is a failure to simply connect the dots... that there is this connection between MB issues and MB's overall market performance. Its real simple, u know. If u remain in doubt, re-read the post on the cause and effect eloquently written by our resident attorney, garyh.
  • ctsangctsang Posts: 237
    We all give credits to MB back in the good old days, but not this decade. MB is getting beaten day after day in what they used to be good at, ie. quality, luxury, reliability, resale value, etc. by other automakers especially Lexus. That's all.
  • ctsangctsang Posts: 237
    Looks like MB pisses off so many people that it creates opportunity for other automakers to overtake MB. But MB still has merc1 and other like him as customers. That customer base is less than Lexus customers though. In other words, MB creates its enemies.
  • merc1merc1 Posts: 6,081
    In all honestly you stop making a logical argument a while ago with comments about me having a Benz and being stuck on the side of the road so I'm done, take care.

    M
  • merc1merc1 Posts: 6,081
    And you now speak for all car buyers, or only MB buyers in knowing what they care about when they buy their high-end cars ?? I can imagine many high-end lux car buyers quite savvy about *some* of the news surrounding MB. And if they think such news is bad enough, they may buy something else. Hence the lower growth rate of the MB brand over the past 5 years compared to, say, Lexus.....And if MB believes SUV will help pad their sales at this day and age, ain't they a tad late, don't ya think ? especially with gas closing on $3 / gallon ??? Maybe diesel or hybrid option will be a *fuel* (no pun intended) for future growth, eh ?

    We've been over this all before. Now its gone from buyers to "some" buyers. Oac there is no evidence of this great buyer awareness of MB's management problems, only their reliability problems and even that hasn't produced this big downturn that you constantly predict. Now you say "some" buyers are savy to MB's corporate woes, then prove it. Where does it state this? Proof please, not guesses. We all know MB's reliablity standing with people who worship surveys is a factor, but this corporate stuff I need to see proof of it, not what he or she said, but stats that show this great awareness is causing such a downturn at MB in the showroom. If you're going to point to older models in the MB lineup and point to their sales, don't bother. Cars go through a natural up and down cycle with sales as they age and this happens at every car company on earth. If this great cloud over Mercedes was as big as you say it is, wouldn't the newly introduced models fail to outsell the model they replaced? Where is the proof that buyers care one bit about MB's CEO leaving? Not what an industry person says, I'm talking about Joe Buyer.

    What I find most interesting, thus far in your posts Merc1 is a failure to simply connect the dots... that there is this connection between MB issues and MB's overall market performance. Its real simple, u know. If u remain in doubt, re-read the post on the cause and effect eloquently written by our resident attorney, garyh.

    Because you haven't supplied any "dots" only hype. If you think that I think MB has no problems then you haven't been paying attention to my posts for months now. Just because I don't join in on the ridiculous hype followed by the gloom and doom forecast with MB's every move doesn't mean I think MB has no problems.

    The new S-Class' styling is a mistake. Have more models is a mistake. The CEO saying anything about their problems is a mistake. Any and everything MB does is a "serious mistake" or a critical error that will end the life of the world's oldest car brand by next year, which is probably not what you mean everytime out the gate, but it does read that way.

    In yours and Lenn's eyes Mercedes can do nothng right and that is where the objection from me comes in. You guys can't even admit the smallest little thing if it not in favor Lexus. Lexus is perfect and its all at the expense of MB.

    M
  • oacoac Posts: 1,594
    I said: What I find most interesting, thus far in your posts Merc1 is a failure to simply connect the dots... that there is this connection between MB issues and MB's overall market performance...

    To which Merc1 replied: "Because you haven't supplied any "dots" only hype"

    To which I now give you Len's and syswei's posts detailing *some* of the dots.....

    1) You go from making $2.5bln a year to losing money in 3 years

    2) Your cars are placed at the lowest end of reliability studies and customer satisfaction studies when they historically occupied the exact opposite space

    3) Resale values have fallen through the floor when they were at the exact opposite end of the spectrum

    4) MB is being crimped on all sides - higher production costs, big warranty repair costs, retention writeoff because leased cars were worth a lot less than the lease retenion values, too big a line-up to maintain successfully, etc etc.

    5) in 1999, MB beat Lexus unit sales in the U.S., 189,000 units to 185,890, but in 2005, Lexus is on track to beat MB by 41% (per post 10088)

    6) MB and Lexus competed in SUVs in 1999, as they do now, yet the relative sales (cars+SUVs) have swung by 43% in Lexus' favor in the past 6 years

    Are these dots or are these hype, Merc1 ???
  • ctsangctsang Posts: 237
    If you think MB prices are the same as Lexus, it will sell more than Lexus, then you really ARE not from this planet. People like me WILL still buy Lexus becuase of quality, reliability, etc. I didn't go from MB to Lexus because of price, I am actually richer now than before.
  • oacoac Posts: 1,594
    That post was of substance, not nonesense and hype, you'll notice I didn't disagree with it either. Only the poorly concieved notions I take issue with...

    Just so we are clear on what you agreed with garyh about, here is excerpt of his first paragraph:

    Let me see if I can reconcile the arguments made here. I don't think ljflx or oac (highlights mine) are saying that people aren't buying MBs because the CEO got dumped. But they are saying that some people aren't buying MB cars because they are suffering from a reputation for unreliability, compared to their historical reputation for being "bullet-proof". That fact of people interested in reliability shying away from MB showrooms who otherwise would be buyers, the recalls, the increased cost of warranty repairs, etc., is what has affected Daimler Chrysler's profitability as a company, and ultimately led to the turnover in upper management...

    Is this the part you agree with, or is it nonsense and hype ???
  • merc1merc1 Posts: 6,081
    1) You go from making $2.5bln a year to losing money in 3 years

    Big trouble for sure, now explain to me what would the average customer care if MB isnt in danger of going out business any time soon?

    2) Your cars are placed at the lowest end of reliability studies and customer satisfaction studies when they historically occupied the exact opposite space


    Another point that has been addressed over and over. This is problem too, trouble is it isn't having this great big effect on sales like you predict each and every spring when these surveys come out. Don't you realize that for a company to keep selling cars that not everyone cares about these surveys like you guys do? I really don't see what is so hard to understand about that. Everyone doesn't kneel at the alter of the survey, other MB and a whole host of others wouldn't be able to sell another car.

    3) Resale values have fallen through the floor when they were at the exact opposite end of the spectrum.

    A good example of hype. Reading that you'd think that MB has lowest resale going, yet when a poster here traded in their MB they were expecting to get nothing and were pleasantly surprised. Lenn gave some very biased numbers for his area, yet this is seen as gospel. These numbers were given for the E and S-Classes, yet models like the CLK retain more of their value than most other cars on the road, including Lexus. Is MB not in the top 5 of resale of any survey around for the brand? If they are then this is not "through the floor" which implies below everyone else. MB's resales have dropped, but they aren't "though the floor".

    4) MB is being crimped on all sides - higher production costs, big warranty repair costs, retention writeoff because leased cars were worth a lot less than the lease retenion values, too big a line-up to maintain successfully, etc etc.

    Old news and this true of most German car companies, regarding high production costs. They all share that problem. Now the comment about MB having a lineup they can't maintain is an interesting one. Please explain. I'd love to know which Benz it is that they can't "maintain" successfully.

    5) in 1999, MB beat Lexus unit sales in the U.S., 189,000 units to 185,890, but in 2005, Lexus is on track to beat MB by 41% (per post 10088)

    So what? There are many factors in this. Price being but one of them. Lexus is the SUV champ and thus outsells everyone because of it. This broad statement about Lexus' sales implies that everything they sell is some sort of sales hit when we all know that isn't true.

    6) MB and Lexus competed in SUVs in 1999, as they do now, yet the relative sales (cars+SUVs) have swung by 43% in Lexus' favor in the past 6 years.

    Really? I still haven't seen the numbers to support this. Surely you've researched and verified this claim right? Until the effect of price is factored in and able to be measured here this is more of the same to me.

    M
  • merc1merc1 Posts: 6,081
    . But they are saying that some people aren't buying MB cars because they are suffering from a reputation for unreliability, compared to their historical reputation for being "bullet-proof".

    This is the part I agree with, for people who are heavily into surveys. What you don't get is that not everyone is. If they were then MB wouldn't be able to get a new product launch off the ground with any success. When are you going to realize that not everyone worships surveys and uses them as the last word in their car buying decisions?

    Until you can tell me what percentage of buyers actually said that these surveys turned them off from MB or any other troubled brand all this guessing about who didn't buy what is just that, guessing.

    You seem to think I have this perfect image of MB, and as others have stated, I don't. I just don't share the ridicuouls exegerrations put out here, something that post doesn't do.

    Generally I agree with ljflx's take on the business side, again its the notion that buyers care about such things (past reliablity surveys) is where I will never be convinced.

    M
  • ctsangctsang Posts: 237
    What's not logical? I got stuck on the side of the road before with my MB. That's why I won't buy MB again. You mean it's not logical when someone doesn't buy MB again after he or she got burned? Then give me some logic that why I should buy MB again?
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