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High End Luxury Cars



  • sysweisyswei Posts: 1,804 =2005009b


    click the small pic to go to a gallery. Imho, styling looks only ok.
  • oacoac Posts: 1,594
    "A-h-h Oac, tell me you are kidding..."


    Yes I was.... That's why I had the smiley face at the end of my post.


    BUT it worked didn't it ? It got you to pony up your typical well-informed and thoughtful post, rather than the one-liner you have been reduced to lately...


    Love reading from Len, as well. I learn something from him everytime...
  • oacoac Posts: 1,594
    It was eons ago now (in the time when Merc1 was a staple debater on Edmunds) when I posited that MBs problems run deep and they were not positioning themselves to turn things around. In fact, I recall using the example of the (then) 116-yr-old Barron's Bank (UK) which collapsed due in large part to the unscruppullous workings of a broker in their Asian opperation (derivatives trading). When the dust finally settled on the sordid affair, the bank was no more, despite such a lofty and glorious 100+-year heritage.... Of course, I was chewed up by the MB fans (mostly Merc1) of living in *sales fantasy* and other blah blah blah... I don't want to say *I told you so*, but Len is right.


    Just this past weekend, my friend who owns a 1998 S500 (the tank) told me he will never buy an MB again. This guy was a huge German-car nut (owned a 911 (sold) and a 735i (sold)). Now, he just purchased a 2005 Escallade with the 6L motor; just couldn't justify the additional $15K for the 2005 LX470. He's never owned a Japanese car in his life, but claimed his next sedan will definitely be the LS. His S500 now goes to his 17-yr-old son as his daily driver. Why, I asked ? He told me they just don't build them as they used to. Too many issues with his MB. For example, his rear-view mirror was toast. Cost $1100. Geez !!!


    I guess we'll see how MB makes these adjustments going forward. Hopefully, they come to their senses rather than living off their heritage and brand cache and do something quick.

  • pablo_lpablo_l Posts: 491
    I am amazed that DC shareholders still keep Schrempp in the CEO spot, despite the utter inability he has shown to successfully tackle *one* single issue that the company has had since he took over. His expansion course had no clear strategy other than growth at any cost for growth's sake, and now has left the company without clear focus and direction. The strategy is not discernible, things within DC keep going on with unresolved ambiguities. No true synergies, let alone clear brand identities, have been developed between MB and Chrysler. The darker it gets, the faster Schrempp tries to drive. He was just quoted with his master plan in the German press today: more new models and variants. No word on consolidation, no word on commitment to their traditional core values (such as quality). It will be a case study in how to manage a company down, and the sad thing is that it is blatantly apparent, and yet in the worst of Gewrman management tradition no one does anything about it. It's amusing to see that, while Volkswagen do their damndest to become more upscale, Mercedes management is doing everything they can to manage their image down-market. The brand's "stickiness" in people's minds will only carry them so far.
  • ljflxljflx Posts: 4,661
    General rule of advanced business is that when you bring in a turn around exec, who's a cost cutter, then you have run all the other scenarios and none of them worked. The strong euro is also forcing their hand. I never thought that this was a Barron's because that type of thing happens (and is much more probable) in service businesses and is rare in manufacturing ops. When it does happen in manufacturing its more apt to be the Food Explorer/Firestone type of problem that can bring the house down. But there is no question that the MB problems are deep, worse than what is being stated and a lot more serious than any MB fan can handle or wants to hear about.


    Cost-cutting is easy on paper but not easy on your psyche since you are affecting people's live's. You always go with a guy who's done it or worked under someone who's done it. From what I read about this guy - he can withstand the pressures within the company but with a marquee German name like MB there will be tremendous union and political pressure to withstand as well. He hasn't been there (political) - very few have. To stave all that off and save the prestige of the brand name - knowing that they will have to cut back on models and options that exist today (otherwise you can't cut the costs in the first place) is an impossible task. That's why the status king days are numbered. And as I said earlier - the words faded and MB should never be in the same sentence if you want "status" clout.


    The other thing brought out by that story is MB's excessive white collar management and inefficient production. I said a long time ago that Lexus is cheaper because its a streamlined very efficient company with far advancced robotics than MB has. Hence the cars are built cheaper and with greater precision and quality. End result - the phenomenal reliability we see. When you overpay for MB it's not just status you're paying for - it's also all that excess management and inefficient production as well. Merc1 used to think MB charged top dollar because they could do whatecer they pleased. He never understood they charged a lot because they had to and that if the volume fell or the price was forced to come down than they were in trouble. Unmentioned in that story is that MB had to take back many 2001 and 2002 cars for prices that were lower than the residuals on the original leases (52% vS 65-67%). That is the Enron part of the story.
  • ljflxljflx Posts: 4,661
    You know sometimes you brainwash yourself and become a believer in the BS you are saying. The guy brought in is the exact opposite of Schremp's plan. The plan he has - re multitude of choice and models - is what they've done the past 10 years. I think both Schremp and his master plan are in their 9th life. If somehow Schremp prevails you will see the new MB head walk and that will only mean that the company's problems are worsening. If this guy prevails Schremp will walk or be forced out.


    US boards are increasingly being held accountable for a CEO and his staff's bad decisions - Worldcom, Disney, Enron - and need to pay with damages from their pockets that insurance doesn't cover . It may become a global thing in the future. maybe the BOD's will finally represent shareholders the way they are supposed to.
  • pablo_lpablo_l Posts: 491
    Not sure what guy you're talking about - Schrempp *is* the CEO of DC as of now, has been since '95, and has been a board member since I have business memory. And the guy's a disaster, arrogance combined with inertia is not a good combination. Typical German industrial aristocracy - they do nothing until a real trainwreck happens. Not sure where you read anything positive about MB's current direction from me. So if my points are BS, by inference yours are too, given we're saying the same thing.
  • designmandesignman Posts: 2,129
    I think Ljflx was using "you" in the general sense and referring to either Eckhard Cordes, head of Mercedes or Schrempp himself.
  • oacoac Posts: 1,594


    Guess what, the new 5 design is beginning to grow on me. Really. There was this 545i riding my tail in traffic earlier today. I took a long look at it as it whizzed by me. Lovely car. With three other 2004/05 5-series at my work place, I see them everyday and I am starting to like the it. Weird, but true !!


    Bangle may not be that bad a designer afterall. Maybe he is ahead of his time, and it is just we paeons that cannot understand such evolutionary designs.
  • designmandesignman Posts: 2,129
    Oh Jeez, what next. Saints preserve us.
  • ljflxljflx Posts: 4,661
    No - The Jets win the super bowl. OAC's from San Diego country so he's not himself today.
  • designmandesignman Posts: 2,129
    The both of you. Dump the Martinis and go to sleep early tonight.
  • oacoac Posts: 1,594
    Funny you should insert the NYJ into this forum. I am still hurting from their undeserved victory this past Saturday against my beloved Chargers. If NY Jets should reach the SuperBowls this year, I'd trade-in my LS and buy a 5-series !!!


    Now, knowing that is virtually impossible, I should have no fear.


    Oh, it must be the *Tsunami after-effect* rain that has pestered us here for the past week. This has certainly impaired my vision and sensibility for me to start liking the Bangle-ized 5-series ??? Unfortunately, it is actually true. Don't ask me to explain it tho'. I also do like the 300C as well. Go figure ...
  • ljflxljflx Posts: 4,661
    What about Bangle 2.0. You need to catch-up on the martini's.


    OAC - forget the 5-series, get the LX470 and go skiing in that 20 feet of snow in the mountains.
  • designmandesignman Posts: 2,129
    That's Detroit Auto Show PR sizzle... Bangle shooting his mouth off in his best corporate brogue.
  • I am a faithful follower of this board because Pablo and others have some thoughtful observations and good insights on where the luxury market will end up. While I agree with Pablo's basic statement that the "car business model has tipped and manufacturers do not build their higher end cars to provide their owners with 10 years of hassle free.....", let me make three points.


    1) Not all manufacturers historically were focused on long service life. Certainly, the BMW 7 Series has been plagued with basic engineering problems since day one (plastic thermostat housings, plastic water pump parts, heads that go crack in the night, auto tranny's that were good for 100,000 miles max. with towing verboten, cheap liners or sleeves, etc.) Jaguar similarly never was a 200,000 mile car.


    2) While the electronics are very problematic and expensive to fix, the basic power trains seem to be getting better and better. They are even approaching the reliabililty and service life of a small block Chevrolet, a Chrysler 727 or Ford C6 tranny. (The next time you are at an airport, the baggage tugs are all running 727s or Ford C6 trannys often behind Ford 300 engines.)


    3) Even if we agree that the the buy'em and hold'em strategy is outdated, this was probably unintentional on the manufacturers' part. In other words, they didn't plan it this way. They couldn't have. Has their statistical analysis gotten so good that they can predict mean time to failure for these components? As a side note, look at the factory to dealer cost of the BMW CPO Program. It is a very hefty $1200 for the certificate alone AFTER all the remedial service work, delayed warranty work, etc. has been done. Because of the justified paronia about owning a BMW out of warranty, the dealer mark up on CPO cars seems to me to be on the order of about $3500 to $4000 above a non CPO car. So, the industry has found a way through their CPO programs to spin around defeat into victory, making chicken sh.. into chicken salad!
  • pablo_lpablo_l Posts: 491
    > I think Ljflx was using "you" in the general

    > sense and referring to either Eckhard Cordes,

    > head of Mercedes or Schrempp himself.


    He was clearly addressing me telling me I brainwash myself and spout BS, it would seem. Which I find somewhat weird, first because I was agreeing with him, second because it seems out of character...
  • pablo_lpablo_l Posts: 491
    Likewise, I follow this board because the discussions are very interesting, and excellent insights are shared.


    I find your (3) very worthy of discussion:


    > 3) Even if we agree that the the buy'em and

    > hold'em strategy is outdated, this was

    > probably unintentional on the manufacturers'

    > part. In other words, they didn't plan it this

    > way. They couln't have. Has their statistical

    > analysis gotten so good that they can predict

    > mean time to failure for these components?


    Needless to say I do not have an answer, but if I would work in product planning for a major car manufacturer, I get the market data telling me that power and gimmickry rank ahead of relaibility with a majority of my target customers (who just intend to drive the car for 3 years), and then some engineer tells me that it increases my COGS by a significant amount of money if a subsystem is designed for 300k miles instead of 100k, and on top of that management makes margins highest priority, then I'd stick with the lower spec. So it could also be that vendors are making design trade-offs simply because they result in higher margins without the majority of the primary target customer group being affected all too negatively. So it *could* be all part of a planning cycle. Or it could be all accidental, which would be a disgrace since companies such as Toyota demonstrate that you can combine leading top reliability scores with industry leading profitability - and perhaps there's even some causality there.
  • ljflxljflx Posts: 4,661
    No, Pablo - maybe i should have been clearer and didn't react further because designman was 100% right. By you - in that post - I meant any person in general can start to believ the "party" line if they say it often enough. In this case the you was intended as Jergen Schremp and the other guy was the newly appointed MB boss. I was attempting to amplify what you were saying in your post and the last thing in the world I had in mind was to post against you personally. I think you're posts are excellent reads and well thought out. Sorry for being ambiguous in that post.
  • garyh1garyh1 Posts: 386
    Sorry guys, but this does not pass the reality test. If reliability no longer mattered to the targeted buyers, then MB would be eating Lexus' lunch, not vice versa. Why were MB sales down and Lexus' were up? Because Lexus is so much better at "power and gimmickry" than MB? I don't think so. I think it goes much more to Len's observations on robotic production effectiveness and efficiency, and the design philosophy of keeping systems separate.


    "Buy and hold" is perhaps outdated for MB owners-- and maybe that is why their sales are down; the segment that looks for reliability has moved on to the Japanese manufacturers.


    When buy-and-hold truly breaks down is when there is a major change in technology. Perhaps when airbags came in, people who could afford to replace cars when desired rather than needed, had an incentive to buy. I think the next time will be when hybrid engine technology becomes entrenched by offering improved performance as well as efficiency. It would be interesting to see Lexus put a more powerful hybrid 5.0L engine in the LS instead of just the upgrade from 3.3L to 4.0L they are putting in the RX; my guess is it would quickly outsell the current 4.3L.
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