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High End Luxury Cars

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  • tiny1tiny1 Posts: 26
    Thanks for the reply lexusguy. I thought the Jags were the absolute worst offenders in terms of long expensive stays in dealers garages. Jag seems to be taking big hits in the reliability arena in the press lately...I have two friends that have had engines replaced within a year of new purchase..Does the 00-01 XK escape this dark cloud? I agree it is arguably one of the best looking cars on the road....and I would jump at one if I thought it would be "reasonable" in terms of service. I'm also looking at a 01 BMW 740i Sport...Do you (or does anyone) have experience with the XK? I saw one last week and it did MY head...I would appreciate anyones thoughts as I'd prefer not to make a $30K mistake.
  • lexusguylexusguy Posts: 6,419
    Yes, there's a silver '00 Jag XKR in my garage. Its my third Jag convertible, my first was a '96 XJ-S. Since the Ford takeover, Jag reliability has steadily improved. My '96 wasn't terrible, but it wasnt that great, either. The problems it had were all electrical though, no major mechanical issues. My next car was a '98 XK8, which was much better. It also had some issues, but not nearly as much as the XJ-S. My current R has again improved a lot over the '98. The Jaguar AJ-V8 is used in the Lincoln LS, the S-type, the XJ, and the XK. I've not heard of any of them being plauged with engine failures. I know I've never had to replace any of mine.

    I own two Lexus cars and the Jag. The Jag cant come close to my wife's RX or my LS430 in terms of a spotless record, but compared to what I've been hearing from friends who have recent MB Es or SLs, its been fantastic. I think as long as you are very careful about making sure the car has been well cared for by its previous owner and is thoroughly checked before you buy, you should be ok.

    I wouldnt recommend the 740i, those are just as bad as the Benz. If you want a BMW, a 540i is a much better choice.
  • "Jag seems to be taking big hits in the reliability arena in the press lately"

    Gee, I don't know what papers you read, but what I read is that Jag is something like Number 1 in its J D Powers category for initial quality, there is none of the chronic whining like there is with MB electrical problems, the i drive on the 7 Series, etc. etc. Jag seems to have its act together. The problem is that no one knows it because of lousy marketing and so sales are slow.
  • anthonypanthonyp Posts: 1,857
    Is everything o.k in the luxury world? As Warren Buffet said `` It would be nice to see everyone liked their stock and there was no trading that day``..He was referring to the commissins that could be saved...Tony
  • designmandesignman Posts: 2,129
    Alright, Tony blew the bugle, let’s see if this unit can get moving.

    I’ll respond with Porsche’s announcement that it will be developing its own hybrid system in partnership with VW which is slated for Cayenne 2010. As mentioned before I expect to see it in or at least considered for Panamera which, if executed properly, will be an awesome sports sedan to begin with. You won’t see hybrid in an early Panamera, but in the general scheme of things, I think they will need to put a lid on fleet emissions and fuel efficiency over the long run. And there has been speculation that Panamera will be the Cayenne sedan so I would think it adds up.

    One of the rags did a realistic rendering of the Panamera sketch released by Porsche. It has an elemental, rugged, down and dirty Porsche look to it. Low slung with the brake rotors and calipers bulging, kind of like a heavyweight boxer’s muscles when he’s dressed in a tuxedo, jacket off and slung over his shoulder. Among the elegant, gentlemanly vehicles in a high-end class that is mostly about business acumen and civilized luxury, Panamera will be like a young Mike Tyson showing up at the wedding.

    What I don’t understand is how Porsche will be able to finance development of both a hybrid system and new vehicle in Panamera, even if Panamera doesn’t have a hybrid version. They are still a small company and both these ventures seem high-ticket. Were the Boxster and especially Cayenne sales that good over the past 9 years to provide an ample piggy bank? Maybe the CFO of this thread, Ljflx, would be kind enough to share his wisdom and give an opinion. Get out of that bunk soldier!

    ;-)
  • lexusguylexusguy Posts: 6,419
    I guess that means no deal with Toyota? Seems like everybody is less "optimistic" about clean diesel than they were last year. With even VW jumping on a hybrid motor, are there any "diesel fo' eva" hold outs left?
  • designmandesignman Posts: 2,129
    No details on the Porsche hybrid announcement other than a joint venture with VW. I guess that doesn’t rule out Toyota involvement though, or licensing some of the technology. I’m sure they would love to be able to do it without them but it seems like a mighty big mountain to climb especially in such a short time.

    Porsche could be on cloud-9 with all of the irons they have in the fire, like a rube who is still experiencing euphoria from hitting lotto (Cayenne). My sense is that they could be biting off more than they can chew. I would think Toyota could still wind up being their daddy on the hybrid account. Hopefully Porsche will come through.

    http://money.cnn.com/2005/09/13/Autos/hybrid_porsche_cayenne/
  • Kirstie_HKirstie_H Posts: 10,873
    A reporter for an influential U.S. publication is working on a piece about Mercedes and would like to hear from consumers. He’s wondering whether the recent quality problems are enough to stop consumers from buying Mercedes in the future. He also cites that Mercedes says it has worked hard to fix the various problems and is producing the best quality cars ever. He’d especially appreciated hearing from any long-time Mercedes drivers around who agree or disagree. If you have a story to share, please respond to pr@edmunds.com with your daytime and evening contact info., city/state of residence and what models of Mercedes you own/have owned, no later than Weds., Sept. 28, 2005.

    MODERATOR
    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.
    Share your vehicle reviews

  • anthonypanthonyp Posts: 1,857
    After driving the lexus H I was impressed ....It is a small step forward, but I think the biggest savings comes when the car turns itself off at a stop light....My wife got the bmw instead of the Lexus, and although it is ten thousand dollars more(could have been five thousand) it gets about the same milage....I think when we get use to these high priced gallons of gas,people will not spring for the hybred unless the price come down sharply. For me the gallons saved are not enough to really make a difference if taken over a year..I know if I were to be thinking (dreaming) of a Porsche I would not want the extra weight.....When wwest didn`t flat out endorse the Lexus I thought there was something to re consider..Tony
  • ljflxljflx Posts: 4,687
    Designman - They are a very healthy company. Cash is about double debt and Net income has been growing nicely to about $800+mln after tax. Healthy balance sheet, growing earnings - I'm sure Porsche feels pretty good about themselves these days, on a roll and putting their nerdy/"purist" auto enthusiast fans further and further into the rear view mirror. A scrappy smaller guy like them finds ways to do things economically albeit with a lower risk/reward return. The more full lined they get the healthier the business is and the less dependent they are on the singular car line the puriusts want them to hold to.How do you do it - partnerships, tie in suppliers/developers/partners to future revenue share, keep projects lean and beauracracy free and then have a nice bonus system tied to milestones being met at budgeted cost. Result - things get done effectively and cheaply, everyone wins, initial profits are not as large as they could have been but long-term equity is noticably enhanced and you are in the game at a deeper level. The operational key past development stage is to utilize existing production and keep production quotas to a niche position as opposed to really competing with the heavy hitters - sought of the way Tampa Bay had the Yankees figured out this year.

    By the way - you've got to realize that many projects qupte a cost but it's not usually an incremental cost. Most of the time it's a reallocation of fixed or existing costs into one project. It's always overstated in Government spending. IE - they say the war in IRAQ costs X dollars per day, But 90% of those x dollars would have been spent anyway. We didn't add 150,000 new soldiers to foght that war. In the casr of cars I'll bet that one of the cost components is lost sales in the last "old" model year, and effecetively that is a real incremental cost. But typically that is made up with the surge of sales in the new model year.

    Now I have a separate problem. My wife loves the IS and my son wants it as his first car. Can I send you the bill?
  • sv7887sv7887 Posts: 351
    Hi All,
    I just tried out the BEST leather treatment ever. It's called Leatherique and is a two step process. Since my 92 is at the dealer I decided to try it on my new 05 LS. You wouldn't believe how soft the leather is now! On the downside, it is rather expensive ($55 for Two bottles Conditioner and Cleaner) and requires a warm day to have a full effect. I put a space heater inside of it and was very pleased with the results. It's even better than when I bought it in December. It is apparently used in Museums to keep the leather soft and supple.

    I've been trying to find a way to preserve the leather on my new car, especially after how badly my leather seats in my 92 have aged. (Much of that is my fault, since I didn't know how to maintain a leather interior) I'm having the 92's seats redyed, but I'll try this treatment on it when I get it back.

    ljflx,
    So your wife likes the IS? Perhaps an opportunity to steal your LS back? I tried to bait my wife into taking my new Corolla. Strange enough, it actually worked! I think she just takes whatever is new. I think she's doing it to show me she can get away with it! Hopefully she won't take the 92 once I get it back.

    One word about the Corolla, not the most comfortable car in the world, but 33 MPG..It cost only $28 to fill it, and I got 330 miles out of it. I was impressed with the fit and finish of the cabin. The tolerances look good enough for a Lexus let alone an economy car.

    SV
  • designmandesignman Posts: 2,129
    SV, man you’re really taking that old LS seriously. Re-dying the leather? Actually, I like seeing people getting the most out of their cars. It’s the most frugal way to do it and I tend to be the same way. However, the older I get the more I don’t mind spending on cars, probably because I couldn't do it when I was younger.
  • designmandesignman Posts: 2,129
    Well the IS would be a nice car for a youngster and it sounds like your son has a lock on it, unlike Oac who if I recall correctly has a couple of much younger kids who need to ride in the back seat. The IS car is no family car. That back seat is the smallest in a class that is back-seat compromised to begin with. The only way he is going to get it is if he could swing it as his personal second or third car. Nah, I see either a GS or LS in his future in addition to the realistic workhorse utility vehicle. Me thinks the toy car will have to wait ‘til the kids have left the nest or have their own cars. OK Oac… you’re on. ;-)

    Now, I couldn’t help but notice that nerdy Porsche enthusiast comment. I suppose every marque has its share of them but the real Porsche enthusiast tracks his car or drives it hard. The Porsche mantra is perfection on both road and track. As far as putting the enthusiast in the rear view mirror, I remind you of the Cayenne Turbo, a totally unnecessary brutish setup for an SUV, but one which demonstrates where the company’s heads are at.

    BTW, it has been reported that Porsche announced today it plans to buy a 20% share of VW. I guess they’re serious about that relationship. I wonder if one will bring the other up, down or remain the same. Hopefully this will be good for both of them. I suppose there is a lot of national pride at work here which counters the MB/Chrysler gambit, and a move that will endear them to all Germans and their unions. Would be nice if American companies could do the same thing and slow the momentum of the Toyota steamroller. I don’t like lack of balance as exists with Microsoft.

    http://www.cbsnews.com/stories/2005/09/25/ap/business/mainD8CR6P9G0.shtml?CMP=OTC-RSSFeed&- source=RSS&attr=Business-APDigital_D8CR6P9G0
  • Kirstie, shouldn't this reporter for "an influential US Publication" just review ,say, the last 1000 messages on this board? He/she would save a lot of time AND cast a wider net than talking with a small set of people who self -select themselves to be interviewed.
  • ljflxljflx Posts: 4,687
    "Now, I couldn’t help but notice that nerdy Porsche enthusiast comment."

    I was really referring to people that want them to build nothing but pure sportscars.

    BTW - buying a piece of VW is a mistake - IMO.
  • lexusguylexusguy Posts: 6,419
    "BTW - buying a piece of VW is a mistake - IMO."

    Totally agree. The only VW group property currently not losing money is Audi. I'm not sure how the Passat is going to do, but the public response to the new Jetta with its wimpy 5-cyl seems to be a big "yawn" followed by "you copied the Corolla?"

    Porsche needs to stay lean and mean, not get bogged down in VW's affairs.
  • anthonypanthonyp Posts: 1,857
    Maybe they have the extra money and want to invest in something they know about....Further they may feel that this would be a shot at the big times and further influence designs .....I noticed Toyota creeping nearer the high in their stock...They are making a big bet on the hy bred future, but I don`t think it will be a quick large success, particularly if interest rates went back to the numbers that use to be, like eight to ten percent...The auto companies must really have a large profit margin to be able to underight the numerous lease deals....Tony
  • ljflxljflx Posts: 4,687
    Maybe the Phaeton dies and is replaced by the Porsche. Who knows - Phaeton production factory access could be a part of the stock investment. That would be a smart move, but if it's a pure investment it makes no sense.
  • jiglx, read your post and thought it made a lot of sense. Have you read Bill Beane's (sp?) about managing a low budget baseball team? But, since bootstrapping seems like a good strategy for a small company, please clarify what you mean by .."initial profits are not as large as they could have been but long term equity is notably enhanced and you are in the game at a deeper level.."

    On an related note, it seems to me that a lower risk/return ratio is highly desireable independent of company size, i.e., no one should swing for the fences.

    Why are you down on Porsche buying 20% of VW? The synergies seem to be present.
  • ljflxljflx Posts: 4,687
    "initial profits are not as large as they could have been but long term equity is notably enhanced and you are in the game at a deeper level.."

    Reason is that you make more "temporary" partnership/revenue share deals - say for a 3-5 year period. So you technically are lowering your development costs in exchange for a revenue share once the product hits the market. If you pull it off the outside suppliers/developers make more than they would have made if you had paid them up front - which you may not even have been able to do anyway. As well you don't hire a bunch of your own temporary employees to do development work - so you keep your normal costs in the company low and you don't have the problem later of laying off people (which isn't easy in Europe) when the project is done. But payment is tied to the product being a success rather than taking a huge potentially company breaking risk on your own . With a name like Porsche and with a strong Balance Sheet it won't be hard to find people who will sign up for a "pay tied to success" formula. They'd probably line up. Overall you have higher costs at the launch of the product than you'd have if you built it on your own (in exchange for the lower development cost risk) . But over time those revenue share deals drop off and then go away completely so that by years 4, 5 and particularly 6 you are making the bigger margins. Equity is enhanced immediately and then over time you get revenue growth and cost decrease (as the revenue shares go away). Becomes a great growth story after year 3 - driving your longer term equity higher and higher. Many small businesses are successful with formulas like this. I've used it several times in my own business over the past 3 years.

    Down on VW deal because a company like Porsche doesn't need the baggage or beauracracy (large European businesses are far more beaurocratic and slower in process than large US businesses) and synergies take place for the bigger guy, not the smaller guy. VW name is not a healthy one right now while Porsche name is top shelf. Maybe there are details that make it right for Porsche but on the surface it's like taking a step backward. It also smells like a German "loyalty" type of theme. Finally If I was a Porsche shareholder I wouldn't be happy as it virtally elimimates a high share price driven by a future takeover. Remember that in the stock market a certain portion of the multiple on your earnings is tied to potentially being acquired. Certain large companies don't have that - GE,Microsoft, Toyota and many others because they are far too large and are technically viewed as acquirers and coudn't ever get acquired.
  • anthonypanthonyp Posts: 1,857
    You have a good grasp , and a sharp mind...Thanks.....There is a good article in the n y times today.....The two families who own fifty percent of the company and all of the voting rights, apparently also serve on v w `s board....There may be too many cooks in the kitchen with v w, so they may take it over and streamline thing down..... That probably would be more challengng than just making a tremendous amount of money by selling out Porsche......The Europeans in my experience are very long term oriented if they have a controlling interest and a long lineage Tony
  • lexusguylexusguy Posts: 6,419
    "This is about protecting a cozy way of doing business that has been part of German corporate culture for years and years – and it’s about historical family entanglements that have dominated these two companies since they were formed. Ferdinand Porsche designed the original Beetle in the late '30s and went on to found the famous sports car company bearing his name. His grandson, Ferdinand Piech, who early on was a gifted engineer for Porsche but who later was the architect of VW's disastrous foray into the upper echelons of the market, is now chairman of VW's powerful supervisory board. Needless to say, he has a vested interest in both companies."

    "A porsche spokesman was quoted as saying, "We are a German company and we have a certain responsibility for Germany and German industry." Analysts insist this is yet another attempt by a German company to prevent the movement to make German corporations more responsive to its shareholders from taking hold, something the analysts have been screaming about for years."
  • patpat Posts: 10,421
    Could you post a link to that? Thanks.
  • You are so very right.

    VW is in deep trouble. It would take huge financial reserves (like Toyota's) to turn VW around.

    Porsche is well established in the high performance world. The new Panamera (with coupe and convertible variants) seemed like a wise move to me.

    I see very few benefits and many potential risks with this move.
  • ljflxljflx Posts: 4,687
    It's still hard to digest the news stories that describe Mercedes as "a troubled brand". I'm sure most of us never expected to see that adjective tied to the Mercedes brand name. Anyway - Dieter is starting to make his moves and cost containment and ultimately cutting out models and choice is inevitable and probably will make itself known before too much longer.

    http://biz.yahoo.com/ap/050928/germany_daimlerchrysler.html?.v=11
  • ljflxljflx Posts: 4,687
    This is why you should never buy shares in smallish family controlled companies. Business rationale is discarded in favor of emotions. They act as if there are no shareholders and as the article states - they try to keep them from having any say and limit/undermine their rights. Decisions like this are guaranteed failures.

    The MB story in that link is real hard on them but it's right on the money based on the former MB owners I know.
  • I feel strongly that cutting back models and option choices is the wrong way to revitalize Mercedes. Dieter and others in management need to go back to building the cars to their previous peerless standard.

    "Engineered like no other car in the world" should still describe a Mercedes, particularly the S, CL, SL and AMG series.

    Now they are building even their top series with a clear objective: a lower retail price. Mercedes will not be the same if they stay with this new process.
  • ljflxljflx Posts: 4,687
    Well I think that is the emotional attachment to Mercedes and it would probably kill them if they held to it. Dieter seems to know what lays ahead and IMO has an excellent grasp. It's been obvious to me for a long time now that MB cannot hold the pricepoints of the past in the US. The poor residuals change everything and mean the MSRP has to come down. It'd be a dumb business plan to think people are going to keep paying top dollar for rapid and excessive depreciation. Maybe in the RR market this is Ok but not in the mass market. This isn't the 80's anymore. There is way too much competition including one from a giant with global plans and with a super efficient cost structure and a quality story that used to define (actually easily supercedes) Mercedes. MB has to fall back in prices. Dieter has to make sure the fallback is as little as possible. Cutting costs is the start. Just like Microsoft went from a growth stock to a value stock, MB will have to go from a status buy to a value buy. When you think of MB pre 1990 they always were a value buy. The price was the highest in the industry but the retention value was incredibly high also. Hence high price still translated to high value. Today high price translates into being a sucker.
  • dfc3dfc3 Posts: 87
    Its interesting that the reduction in work force is focused most heavily on the C-class. This seems to be a message in and of itself. The C doesn't have a high price point right now. The focus seems to be on the more core classes in the U.S. that are at a higher price point and potentially bring them down.

    I do agree that Mercedes was perceived as top prestige and top quality 20 years ago. Now they are possibly high prestige but below average quality. Yet, I don't think that's an engineering issue per se, more of an added doo-dads, electronics issue. I don't know of Mercedes' owners complaining about engine or transmission durability - more along the lines of things like "the $%&# relay shorted out and I've taken it in 3 times". For some reason, they seem content to outsource all that and not force the suppliers to the highest level of quality.

    Anyway.... I'd consider buying a C-class, but wouldn't move up to the E. If they phase it out or scale it back - then the only remaining buyers would have to be focused high-end; and possibly less likely to tolerate issues than the mid-range.
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