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High End Luxury Cars

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  • oacoac Posts: 1,594
    My earlier comment on MB as a car mass-marketer rather than a pure luxury car maker may be, shall I say, too graphic, eh ! So I'll back off and re-phrase as follows:

    MB is a world mass-marketer in fine automobiles, but positions itself as a luxury car marker in the all-important NA market, a "fact" that is clearly in dispute since they (MB) have only led luxury car sales once in known recorded surveys. I use "sales" here to demarcate pure luxury car makers - Bentleys, RR, AM, etc... where sales # are not the bench-mark of prestige, versus MB that uses prestige to hoodwink the buying NA public into what it is not.

    Just had my very first drive in my friend's 330ci. What a car ??? I am a convert, pure and simple. That inline-6 motor is just unbelievable !!!! Maybe it was the additional 1" lowering on the car, but I swear taking curves at 80mph had absolutely no roll, and I took these corners real hard.... Rode around in the sport mode, handling was crisp, not Lexus-like, but darn great, I must say. What a difference ??? I am a believer in the BMW hype !!!! OTOH, the 5-series did nothing to move me when I had extensive drives in it, but this 330 is just absolute dynamite. I told my wife, that WILL be my next car, hopefully before the 2006/07 new LS comes out. I'm gonna get a slightly used 330ci (no Bangle-ised version for me) next year and get rid of my little Trix. And then by late 2006, I'll be waiting in line for the new LS.

    Toyota/Lexus' is going to make a killing with their hybrid technologies. With oil prices nudging close to the $60 mark, who is to say we won't see a $100/barrell of oil within a year or two ? Hello China (slow down your growth a tad, will ya?) ???? Just about timeframe when Toyota/Lexus's stable of hybrid cars/trucks are entrenched in the market. The hybrid Toyota Sequoia is scheduled for 2006, the hybrid Highlander for 2005, and the hybrid RX due anytime from now. The new LS-H will probably come to the US by 2007, and maybe the GS-H or IS-H will be here earlier than these time lines.... Of course, Nissan, Ford and to a lesser extent GM will follow Toyota/Lexus, but at a very distant position.

    An investment tip (unsolicited, so pls ignore): may be a safe bet buying TM right about now... check it out for yourself at http://finance.yahoo.com/q/bc?s=TM&t=2y
  • sysweisyswei Posts: 1,804
    Interesting tidbit from Automotive News: "Porsche may build a hybrid version of its Cayenne SUV using a Toyota powertrain, a Porsche source says. Toyota and the German carmaker would adapt the gasoline-electric powertrain to be used in the Lexus RX 400h."
  • maxhonda99maxhonda99 Posts: 1,289
    I don't think the Porsche Cayenne using a full Toyota engine/hybrid system will end up making it.
    One would think Porsche fanatics will end up crucify Porsche if they did that! More likely would probably be adapting the Toyota hybrid technology for their existing engines.

    But, hey, you never know.
  • ljflxljflx Posts: 4,665
    They seem to be working together more and more.
    What is going on?
  • maxhonda99maxhonda99 Posts: 1,289
    ljflx,

    What else have they worked on or are working on together?
  • pablo_lpablo_l Posts: 491
    2 things: I think about Mercedes positioning *itself* as a pure luxury car maker... that is your personal perception. MB doesn't do much about it, for some reason they do have that image of exclusivity in NA despite the fact that, indeed, their reality isn't different from others. I am not saying it's justified, all I was saying is that product strategy wise they're no different from the other brands you mentioned. And their brand equity is undeniable according to brand experts. We have repeatedly talked about the fact that MB will in the end dilute the brand image over time with their current strategy.

    Second of all, I fully agree with you on the 330. I have said before that in my opinion the 330 might very well be the best car on the planet in rational terms: it's built in such quantities that every kink in its armor gets ironed out over time, and BMW's 3 liter inline 6 to me is the best engine other than some 12 cylinder exotics in the car world. It's turbine smooth (more so that any V8, really) and torquey, and a perfect match for the 3 series weight. The only problem I had with picking a 330, which I was 5 minutes away from doing, was the fact that they're *everywhere* in the Bay Area. Phenomenal car, but as I have said before, it's a bit like an amazingly gorgeous girl that's slept with everybody you know - she's still gorgeous, but the desirability suffers some. :-)
  • ljflxljflx Posts: 4,665
    Toyota people helped then deploy Toyota TPS and Porsche quality improved as a result and Porsche worked with Lexus on the new GS' handling.
  • ljflxljflx Posts: 4,665
    Can't agree with you on that one Pablo. They market status and exclusivity in the US at every turn. Did you see anybody that wasn't a celebrity on those commercials touting star (sports, TV, movies, whatever) ownership of MB's?
  • pablo_lpablo_l Posts: 491
    Most of the ads I have seen focus on everyday people loving their Benz through the ages. I just went to their website, and the "Love Mercedes" theme seems the over-reaching one. And then some safety element, with the usual peacefully asleep infant sitting in the back of a nice car (which made me fondly remember my Dad screaming at me to stay awake and look out of the window, because I'd barf like a dog if I fell asleep on the curvy road home). I do recall the ad campaign you mention, but I seem to recall it was rather short lived. My impression is other brands rely ont he celebrity endorsement far more than MB does. Perhaps a shift in marketing strategy? Luxury, but not snobbishly superficial and unapproachable?
  • ljflxljflx Posts: 4,665
    The end must be near for the Phaeton. Saw an ad in Wednesdays NY Times special auto section in rather large print. The $67K Phaeton "special lease" at $499 per month for 3 years but only 10K miles per year. I'm sure you'll have no problem upping that mileage to 12K or 15K in negotiation. Heck I'd feel guilty negotiating a price lower than that $499 per month. No driveaway costs other than registration fees. No bank application fee, nothing down, no security etc. Residual is $35K but who in their right mind will buyout this car after 3 years unless it has value of a different nature. But do the math - the car amortizes $32K officially (more than likely the $35K residual is $10K+ overstated) and your cost is only 60% of the depreciation. If I needed a third car right now even I would lease that car at that price. There's no risk unless the car is a lemon and the laws protect you on that. What a bath VW is taking on that car. But if you are speculative and you lease, who knows - the car may have its greatest value as a collectors item if it turns out to be a one year model. Than the $35K residual may be a bargain. They certainly are rare. I've seen one so far and mistook it for a Passat until I got close enough to see it was too large.

    I have to wonder if this VW stupidity on the Phaeton will drag down the A8 with it since, for all intent and purposes, they are the same car.

    RX and Cayenne working together - an interesting link is posted over on "German carmakers - starting to make critical mistakes" on news and views. It would be hard for a lot of people to swallow but it makes great strategic business sense for large and powerful Toyota to acquire small and highly successful Porsche. A win-win situation all around but it would be impossible for Porsche lovers to digest in their lifetime. I wouldn't be the least bit surprised if it happens in the next 5 years. Porsche almost died 10 years ago and really should be a product line of a giant. In that way you can preserve Porsche as a pure sportscar and use the expertise on the main line of cars and suv's the giant offers. Porsche as nothing but a sportscar is what Porsche lovers want. But Porsche as nothing but a sportscar is a bad and risky business strategy in this technology age, which is why you have the Cayenne; and it's why you will eventually have other Porsche models the brotherhood won't be happy about. The more I think about it the more I realize a takeout by Toyota is a no-brainer.
  • pablo_lpablo_l Posts: 491
    Wow, nice (for a prospective buyer, a nightmare if you're the product manager). I have not been able to locate that deal in California, but I am certainly interested.
  • ljflxljflx Posts: 4,665
    It's definitely a VW deal but maybe its regionalized instead of national. They can't seem to sell these here at all. Last month there were $599 leases advertised and before that $649 ones. At some pricepoint they have to get some interest and move. The car is certainly a greater value than that price. I don't get the Edmunds TMV on this car at all. It says it's selling for list in my zipcode when they are advertised at $12-15K off list before you even start to negotiate.

    VW should take the price out of its mag ads. I saw an ad recently that showed the car with a noted starting price at $66,400. The ad didn't even show a decent close-up of the car. That price is keeping people away rendering the ad useless anyway. It really is throwing ad money away since the cars are selling way below the price advertised. Just take the price out and replace it with something like "special price packages for a limited time - see your VW dealer". Someone at VW is really asleep at the wheel or maybe they just don't give a damm anymore about this car.
  • Kirstie_HKirstie_H Posts: 10,824
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  • designmandesignman Posts: 2,129
    I like how we just went from crucifying six cylinder engines based on torque to showing interest in a mediocre V8 that propels 5200 pounds. The V8 Phaeton weighs nearly 1000 pounds more than the LS430 yet the LS has 3 lb-ft more torque. Reviews have the LS at around .8 seconds faster to 60 but I have to believe it is more—that’s a serious weight difference. But I guess the other aspects of luxury at a bargain price are enought to raise an eyebrow.

    Anyway, I stopped by VW yesterday to check out the situation. They quoted a lease price of $599/10k. I told the salesperson that I heard prices were lower without specifically inquiring about the above mentioned $499 deal. Then he volunteered that there was a price of $499 advertised in New Jersey but that it was a mistake… said they received several calls inquiring about it. They only had one W12 and one V8 (sold) in stock. When questioning why there were so few he said that people were starting to discover it and that the 05s were due soon. In any event, they weren’t at all anxious for a sale. Lastly, I’ve read about prices going as low as $16,700 below MSRP, also that VW was inviting owners of MB, Jag and BMW to drive it for 48 hours.

    http://www.autoweek.com/news.cms?newsId=101091

    BTW, if this car bites the dust early I believe it has no chance of maintaining any significant collector value. As far as I know it just doesn’t happen with sedans. And if it does, you will not know it for many years to come. Will be interesting to see where the bottom is if it keels over.

    Too bad about VW and their mess because I think they have some of the best all-around styling—they aren’t knockouts but are simple, streamlined, and nonsense-free, both inside and out. However, I find the Phaeton interior to be banal…the dash is too flat and square... milled, not sculpted.

    “Someone at VW is really asleep at the wheel or maybe they just don't give a damm anymore about this car.”

    Agree. Or maybe they are just not adept at marketing. Or maybe Pischetsrieder can’t bond with Phaeton because it is his stepson. Or maybe he knows it is inherently doomed so he's just helping to euthanize it. Actually, I don’t think it is doomed just by way of being a Volkswagen. I think perhaps they just never had good marketing plan and that Piech, Pischetsrieder or both could have been a bit reckless with the vision and less than thorough in implementing it.
  • oacoac Posts: 1,594
    Designman: First you express the sentiment that "Actually, I don’t think it is doomed just by way of being a Volkswagen"

    And then conclude by saying this: "..... a bit reckless with the vision and less than thorough in implementing it."

    Methinks you are too optimistic for VW and their Phaeton mis-adventure. Here is a contrarian view (surprise, surprise): Anyway you look at it, a $70K-90K VW (V8 and W12 trims) is both a "Reckless vision" as well as a "blurred vision". How can anyone imagine this can be anything but a disaster ??? What should we think of Audi and its Phaeton cousin/brother/stepbrother/ or what ??? And why should there be an Audi division if VW can sell cars in this price range ? I mean, how do you go from a VW Bug to a Phaeton ???

    What-were-they-thinking?????

    But I have to agree with you on one point. The Phaeton won't be a collector's item. That will be too good for it. Rather it should go the way of other ill-conceived and poorly executed automobiles (and there are a lot that fits this category), a simple blip which will be no more than a footnote when the history of VW is written.... As a long-term resident of this car and status-conscious San Diego, a city of 3 million-ish residents, I have never seen a Phaeton on any roads out here... Do they exist here ? Maybe. Rather, I have seen quite a few Touaregs in town here (mostly the slower V6 trims) :)
  • designmandesignman Posts: 2,129
    Oac, I find it ironic how Toureg, a luxury truck, can succeed as a people’s car. I guess Cayenne is a people’s car too. It’s funny, when money falls from the skies you lose that branding act real fast. You just forget about who you are, drop what you’re doing, get on your knees and scrape it up as fast as you can.

    There’s not the same demand in the high-end luxury segment and plenty of competition to begin with, so you had better have a good plan. When you forecast sales of 5000 units and come up with 1000, that’s reckless. You see dreamers in small business doing this. If they wanted to reverse that “peoples car” image they could but for heavens’s sake, how about a plan? In my opinion this case has little to do with the brand and everything to do with demand and marketing skills. Piech has been described as a megalomaniac—reckless. And Pischetsrieder was TOTALLY irresponsible by criticizing the Phaeton concept not long after it was launched when the shelves were fully stocked—reckless.

    In the 50’s “Made in Japan” meant it was as cheap as it could get. Shortly thereafter we had people’s cars in Toyotas, Hondas and Datsuns. Today we have Lexus, Acura, Infiniti. Volkswagen does not HAVE to be a minimum-wage brand. But this depends on making it happen. IMO the Phaeton gambit appears to be more like an irresponsible one-night binge on a crap table.
  • maxhonda99maxhonda99 Posts: 1,289
    VW already has Audi to sell upscale cars. Sure, Pischetsrieder was stupid by criticizing the Phaeton concept right after it was launched but that hasn't caused it's failure. I don't think the marketing is hurting it either. I just think people aren't prepared to pay $70K to $100K for a VW! And if they do want to take VW upmarket they should have done it gradually. First take the Passat slightly upmarket, then bring in a car around $50K, then bring in the Phaeton. But that may have not worked either since the Passat W8 flopped big time also. Just goes to prove VW should stick with $15K to $30K cars and let Audi deal with $30K+ products.

    "In the 50’s “Made in Japan” meant it was as cheap as it could get. Shortly thereafter we had people’s cars in Toyotas, Hondas and Datsuns. Today we have Lexus, Acura, Infiniti. Volkswagen does not HAVE to be a minimum-wage brand."

    You point out the difference right in your own statement. Toyota went upmarket by creating a new name brand, so did Nissan and Honda. And Toyota did it smart. They knew nobody would pay $50K for a upstart brand in 1990 so they priced it cheap@$35-$40K and then as people got hooked they moved to the price up. VW played it dumb by bringing a car straight from $30K to $70K. Very dumb move, IMO.
  • ljflxljflx Posts: 4,665
    designman - I'm pretty much with you on this VW recklessness. But I will add that another VW problem is they introduced this car at a point when VW reliability hit its lowest point ever. A better business plan would have made sure VW reliability was on an upward incline first and would have also had one or two other lux cars in the stable with it - either now or planned for the future that it could talk about. You don't bring or get the attention of the lux crowd with just one car and you sure as hell don't bring it in above the price of a Lexus top end car. Had they brought this in at the prices they are charging now, and with a good or improving reliability record, they may have had a chance. But on top of these business screw-ups they had a change of leadership on the top, the CEO criticisms of each other and worst of all they never created any buzz in the market. When Lexus and Infiniti came to market the buzz was so great that there were big news stories on the cars everywhere - to the point that the cars appeared on the covers of business and news magazines for everyone to see - as news stories. There-in lies the other problem - the Japanese did it all with new branding. VW already had an example of what happens when you only try and do it with a car. All they had to do was look at Mazda. Mazda of course wanted the upscale branding in the planned Amati line but didn't have the capital resources to pull it off.

    That $499 lease - It was so low I called up a buddy of mine who is a high-up exec in the Ramsey (of New Jersey) car chain to see if it was real. It was. But the lease was for a limited time till today. The dealer will be at $549 starting Tuesday from what I was told but I haven't seen or looked for any other ads. He also told me VW dealers cringe when they get a Phaeton to sell and there is far too much supply and virtually no demand.
  • designmandesignman Posts: 2,129
    I think we all are basically on the same page with Phaeton. Everybody makes points I agree with. Ljflx, I always enjoy reading your comments that relate to marketing (others too).

    Well, at least this discussion is a change from MB vs Lexus. And by mentioning it I hope I didn't just jinx it!

    ;-)
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