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High End Luxury Cars

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  • nvbankernvbanker Posts: 7,285
    A Kia? I think not. What an oversimplification!
  • merc1merc1 Posts: 6,081
    But I'll tell you what - when I see an ordinary person driving home in a new S500 to a house that is worth 50% of mine I know he's just BSing himself on status. Besides, after three years his car is worth less - on top of that. So much for status three years later.

    Wow what a judgement based on nothing more than a grand assumption! What it that person isn't into houses like you are? What if they like cars more than houses? What is an "ordinary" person? That is clearly a snob remark if there ever was one. Why is that a Mercedes/BMW buyers buy for status, yet Lexus owners are these meek, non status seeking people, yet they drive the most wannabe-status, "I'm a luxury brand to" luxury car on the planet? Lexus owners think status and prestige is bs or for German car buyers until you mention Acura or Infiniti, then you'll get a complete about face and a lecture on how Lexus has so much more status and prestige over a mere "Honda" and a Infiniti. Gawd that is hilarious.

    M
  • merc1merc1 Posts: 6,081
    Does it occur to you all these unreliable marques, except Ferrari, are actually dead? (Is Ferrari owned by Fiat now? Correct me.) They were forced to bankrupt and sold to other companies. Eventually, the new parent companies are going dump these money drain once again.

    Actually no because they aren't. Lamborghini just wrapped up a great year in 2004 and is on track to have their best year ever for 2005. Hardly dead. Mercedes-Benz is far from being dead, and according to some of today's press they're showing signs of corporate stability. Ferrari has been owned by Fiat for years? Whats your point? Ferrari is the most legendary name going in the sports car world, more so than even Porsche in a lot of circles. They owned F1 racing until just this year. Of course that means nothing here because luxury car bordem is the order of the day. You only need to read anything about Bentley today to know what a bang up job they're doing. The only ones on that list that aren't doing so hot are Maybach and Rolls-Royce, but dead they are not. They made the mistake of overestimating the demand for 300K+ cars.

    M
  • merc1merc1 Posts: 6,081
    I think to say these companies are successful simply because of their better reliabiltiy ignores the rest of the picture. The reasons for each vary greatly, with the main one being they finally have a corporate parent with the resources to finally exploit their various talents while making the business case work. These brand's reliability isn't even tracked and people who buy these cars don't give two hoots about Consumer Reports or JDP - even if they did cover Ferrari, Bentley, Maybach, Lamborghini etc.

    Bentley is alive because of VW's donating the Phaeton's platform for not one, not two, but three different Bentleys....all at prices nearly 90K less than only Bentley model left over from the old regime - the Arnage. That is why Bentley's sales have exploded, not because of their stellar reliability, especially using VW "stuff".

    Lamborghini's situation is very similar. When you only sell a 300K Murcielago you aren't going to set the sales charts afire, but cut that price in half by offering a V10 engineered (i.e. money from Audi) sports car and all of sudden the brand is alive in a big way.

    Finally, yes Honda did prove that a supercar can be reliable, but they haven't been able to capitalize on it. The NSX was surpassed and rendered irrelevant about 10 years ago.

    M
  • lexusguylexusguy Posts: 6,419
    When I sat in a '05 XJ VP, and felt the inside of the door handle, it was hard, cheap plastic. I tapped a finger nail on it, and it had the signature Kia 3 cent plastic sound. On the one surface of the car that you're going to be touching constantly. I really cant think of a dumber place to cost cut than the door handle. The other major problem I have is with the seats. They're just plain 'ole leather seats, absolutely nothing special about them. They could easily have come from a Lincoln. They seem passable enough...just dont sit in an XJ12, or you'll see and feel whats been lost. This is what Jaguar seats are supposed to look like:

    image
  • merc1merc1 Posts: 6,081
    If the new 2007 XK is up to snuff will it be a possible canidate?

    M
  • lexusguylexusguy Posts: 6,419
    Absolutely. I'm hard on Jaguar because I love em. The new XK should definitely remain the best looking car in its class, especially the drop top, which I think looks better than the coupe. While Callum is correct in that the XKE coupe was a hatchback, nobody wants XKE coupes.
  • merc1merc1 Posts: 6,081
    Absolutely. I'm hard on Jaguar because I love em.

    I understand totally. ;)

    M
  • garyh1garyh1 Posts: 386
    KBB, ALG and the Blue Book:

    What further stats do you fellows need to understand that BMW is number one in residual values?


    Well, let's start with the fact that "KBB" and "Blue Book" are the same - what do you think the BB stands for?

    But I'll try one more time. Let's start with the assumption that the car you drive - a 3 series - is a great car; most would even say the best in its class. It probably has excellent residuals, and in terms of units sold, could certainly put BMW's "average" residuals way up there.

    But if you are buying a car in the group covered on this forum, the 3's residual is irrelevant. The only BMW model that is relevant here is the 7 series.

    So even though it should be blatantly obvious to everyone that historical data shows the LS' residuals are better than the 7's, let's do this one more time based on Edmunds data, which is supposedly based on ALG data on projected residuals (see the 2/12/04 press release on ALG's web site that announces it is providing info to Edmunds).

    Edmunds.com has a section called Total Cost of Ownership (TCO). They do exactly what we all agree is the correct way to determine residual value (although they do it using ALG's 5 year projected depreciation, rather than historical data). They use current TMV (True Market Value) for purchase price, and the projected private party sales price for disposition price, with the difference being depreciation.

    So using the Edmunds/ALG TCO data, a 745 can be bought for $77,409 and is projected to depreciate $44,257 over 5 years, therefore retaining 42.8% of original cost. An LS can be bought for $61,698 and is projected to depreciate $34,501 over the next 5 years, for a 44.1% retained residual.

    I think I have now shown conclusively that both on historical and projected data, the LS has better residuals than the 745. But some folks here won't accept it anyway.

    There certainly may be reasons to prefer the 745 over the LS, but residual value is not one of them.

    Oh, by the way, TCO for the 745 is $1.11 per mile vs. $.96 for the LS. And for those who are interested, it's $1.15 for the MB S430, $1.22 for the 4matic version. The Audi A8 and Phaeton both run $1.12; the Jag XJ8L is $1.01.

    If nothing else, we should all be able to agree that the LS is the value leader in this class, both up front and long term.
  • What I meant was, if it wasn't for these corporate parents and the injection of capital, Ferrari, Lamborghini, Bentley, Rolls, would probably be plagued with reliability problems and have already gone bankrupt.

    Let's use Rolls Royce for example, they had the prestige, the luxury, the engine, but why weren't they selling anything? Reliability.

    Now Lamborghini- They had the prestige, the horsepower, the style, why did they almost go bankrupt? Problem with reliability (the lack of racing sure didn't help either).

    Even Ferrari- in the early 90's, it was bleeding money when everyone knew Ferrari was the ultimate exotic car, why? Reliability.

    Rolls and Lambo got new parents, the first thing they did was to improve their realiblity. Ferrari spent tons of money to improve its reliability in the early 90's because they knew their survival depended on it.

    Of course you can argue the economic downturn in the 90's, the lack of racing success in both Ferrari and Lamborghini... etc, but if you pull some articles from the era about these exotic cars, most auto editors complained about reliability issues. So yeah.... I believe reliability is pretty important.

    BTW- Edmunds has a very interesting article on their long term Ferrari 550, I highly recommend it.
  • merc1merc1 Posts: 6,081
    What I meant was, if it wasn't for these corporate parents and the injection of capital, Ferrari, Lamborghini, Bentley, Rolls, would probably be plagued with reliability problems and have already gone bankrupt.

    Well that is basically what I stated in my previous post, except for that reliability part. I don't see here is how their reliablity has made any difference when they never traded on reliability in the first place. Secondly, the usual Consumer Reports and J.D. Powers data isn't available for brands like Ferrari, Bentley, Lamborghini, Rolls-Royce and Maybach. Everything I've ever seen about these cars and their buyers indicates that this group has a Mercedes, BMW,Lexus,Jaguar i.e. a "regular" car for everyday use.

    Reliability as it is known here is not the reason why some of these of these brands have come back. Lets look at each one of them.

    Rolls-Royce - they aren't doing to good, but they are doing better than when they were owned by Vickers. True, if it weren't for BMW they would likely be out of business in today's marketplace. It wouldn't be because of reliability in surveys, it would have been because of a obsolete product. The old Silver Seraph didn't even have HID headlamps or stability control when it was introduced in 1998. The cars Rolls built under Vickers were techincally obsolete and your average Mercedes, BMW, Lexus was a vastly superior car from that standpoint. Fast forward to 2004 and now with BMW at the helm they're able to produce a product that is both technically advanced and built much better than any Rolls in several generations - yes this does include reliability, but I seriously doubt that a Phantom has the reliability of a Toyota or Honda. The car itself is vastly superior to the Silver Seraph - and that is what brought Rolls-Royce back, not because survey chasers are checking results - their aren't any because RR isn't part of any surveys - that I know of. Its product. Now their comeback is iffy because while they are "up there" in name and what not, they severly overestimated the market for 300K cars like the Phantom. The last Silver Seraph wasn't nearly as expensive.

    Bentley - their comeback is due solely to lowering the price of admission to the Bentley lifestyle from 225K+ for an Arnage to 165K for a Continental GT. This is via VW's Phaeton platform. All of a sudden I see Bentleys (Continental GTs) all the time and all the years before that you hardly every saw a Bentley Mulsanne, Turbo R or Eight. Now they're selling the 165k (or so) Continental Flying Spur and next spring they will sell a convertible version of the Continental GT Coupe, all on the VW platform. VW is hardly the standard in reliaiblity and I will never believe (without proof) that all of sudden Bentley's reliability is so good to the point where people want to buy them now. Its the price cut that got the traffic into Bentley showrooms, not reliability. Bentley still sells the Arnage, the car from the Vickers era and it has been tweaked so many times now I've lost count, and it still sells, but at over 200K it isn't going to sell as much as the Continental group of cars. Price far outweighs reliability when it comes to Bentley's roaring comback. There is a reason why the Mercedes CL has dropped like a hot rock since last year, much more so than the S-Class has. It is called the Continental GT. For a little more than a CL55 or CL600 you can have a Bentley. The CL65 AMG actually costs more than the Bentley.

    The same is for Lamborghini. Every since the Jalpa was dropped in the late eighties Lamborghini was a one car show, and a 250-300K car at that, the Diablo and then the Murcielago. Enter the new under 200K V10 Gallardo and sales shoot up in just one year - that isn't reliability because Lamborghini has been owned by Audi since 1998, but the sales only came after the much cheaper Gallardo was brought to market in 2003. If you read a roadtest of a Lamborghini you'll see that they still aren't reliable. In the latest C&D comparo the Gallardo was flatbedded away, and didn't finish the test. Numerous test of the Murcielago have shown how fragile their gearshifts are - editors have broken them many times. Sure Audi made sure they don't run hot anymore and that the a/c actually works, but they did that with the Murcielago and Diablo (towards the end of its run), but the big sales (relatively) didn't come until the much cheaper Gallardo came on the scene.

    The overwhelming factor behind the newfound success at Lamborghini and Bentley is a lower price of admission, made possible by their owner VW, not because they're more reliabile. Lambo is barely any better than they used to be in some aspects of reliability.

    Now I agree about Ferrari having learned and gained the most because they aren't as fragile as before. Ferrari always had expensive cars and more than one model to sell and they haven't gotten any cheaper to buy so reliability has played a much bigger role there - I agree there.

    A Maybach could be as reliable as a Camry, isn't going to change the fact that most people don't know the history behind Maybach or that is costs an absurd 325K to start. Now if they decided to build a cheaper car that will help, but that won't make any sense if they're going to be in S-Class territory, but that is another debate.

    Rolls-Royce has the rich-parent to inject capital into them, but they still don't sell as well as BMW would like them to. Now watch what happens if and when they bring to market a car priced along the lines of the 225K Bentley Arnage, which you'll remember was the sister car to the old Silver Seraph. That being a market segment they abandoned with the over 300K Phantom. It has very little to do with reliability as we know it here.

    M
  • lexusguylexusguy Posts: 6,419
    Those original Maybach Zeppelins were gorgeous cars, but I agree, today the name means about as much as Pierce Arrow, or Cord. It's unfortunate that the last things the original company made were engines for Panzer and Tiger tanks.
  • I am an American who was actually up there trying to buy a car....and it was not even 5 years ago. It also has nothing to do with your economy...It has to do with taraffs and import fees which are much lower up there....In essence you are a free trade zone with Japan and Europe..

    These five years, the Canadian Dollar has risen from 0.63 USD to 0.84 USD (33% increase). The price at the dealers are not lowered. In short, the car company/dealers do not list prices according to what costs them, but what can be afforded.
  • Actually no because they aren't. Lamborghini just wrapped up a great year in 2004 and is on track to have their best year ever for 2005. Hardly dead. Mercedes-Benz is far from being dead, and according to some of today's press they're showing signs of corporate stability. Ferrari has been owned by Fiat for years? Whats your point? Ferrari is the most legendary name going in the sports car world, more so than even Porsche in a lot of circles. They owned F1 racing until just this year. Of course that means nothing here because luxury car bordem is the order of the day. You only need to read anything about Bentley today to know what a bang up job they're doing. The only ones on that list that aren't doing so hot are Maybach and Rolls-Royce, but dead they are not. They made the mistake of overestimating the demand for 300K+ cars.

    LOL, you justify your point by 1 year of great sales? My bad on using the wrong words. Actually, these marques were dead long ago. Only some CEOs were fanatic about these cars and thus bought them at the expense of the employees. Example: this year, 2005, Bugatti Veyron is finally rolled out with many titles like being the fastest and the most expensive. This same year, VW lays off more than 20,000 workers in Germany.

    Same goes with all English marques (Aston Martin, Bentley ....). They are English no more and they do not make money for their new masters. One year of profit does not a good business make. Check out the profits of these marques for the past 30 years plz! A lot of Ferrari's income was from tobacco ad's on their race cars. Let's see what happens when those ad's phase out in the next several years.

    In the United States, the most profitable marques (in terms of profit per car/suv) are Porsche at No.1 and Lexus at No.2. Is it a surprise? BTW, the most profitable company overall is Toyota, whose market value is No.1 in the world and more than double of GM and whose profit is more than the big 3 combined (if they do have a profit).
  • deweydewey Posts: 5,243
    Merc1,

    Great post!

    Absurdly high prices will kill the success of any car whether it is catered to the affluent or not!
  • designmandesignman Posts: 2,129
    I always try to get my kids to eat brocholli. I remind them its good for them, but they go eeewwwww !!!!

    Oac, a BMW is good for you. C'mon now, just take a couple of forkfuls and you can go watch TV.

    ;-)
  • sysweisyswei Posts: 1,804
    imho the higher up you move in price, the less important reliability becomes, and the more important exclusivity/prestige becomes to the people that actually buy these things. Not just in cars but sometimes in other products like watches. It is well known for example that Rolex is unreliable, but that doesn't keep some people from buying them, mostly imho for show.
  • sysweisyswei Posts: 1,804
    I heard a speech yesterday by an expert on demographics. He said that people in Japan actually don't drive that much because the country is so densely populated...something like 80% of the population on 2% of the land, due to mountainous terrain. If you put every car in Japan on the roads simultaneously, there would be only 4 feet between each car. In the U.S. it would be 140 feet.
  • ctsangctsang Posts: 237
    "It is well known for example that Rolex is unreliable."

    Where did you get this info? You are so wrong that it is not funny at all. It also shows that you don't know anything about watches. My Rolex lasts longer than you and I several lifetimes over.
  • designmandesignman Posts: 2,129
    My favorites are Breguet and Patek Philippe. Are they reliable?

    BTW, here’s a David Ogilvy story.

    Ogilvy & Mather once had the Rolls Royce advertising account. While developing strategies and tactics, one of O&M’s researchers went to England and was given tours and demos of the product by RR execs. He was awed by the quietness of the cabin and noticed that he could hear the clock ticking. Upon hear this Ogilvy said, bingo, that’s an ad. The headline of one of their ads proceeded to read something like this…

    At 60 mph in a Rolls Royce, the only thing you can hear is the clock ticking.

    Upon seeing the ad, the chief engineer at RR was a little upset and said “we really have to do something about that clock.”

    ;-)
  • sysweisyswei Posts: 1,804
    Well, first of all, someone I used to work with had a relative that owned a high end watch store, so that it where I first heard it, I think the words were something like "Rolex is a poor timepiece".

    Second, I have read that cheap quartz mechanisms will keep more accurate time than certain expensive Swiss-made models.

    Third, if you just do a google with the words "rolex reliability" you'll turn up annecdotes like:

    Went shopping for a jacket when I noticed a colorful watch on a man's wrist. I walked by him and noticed it was the red/blue Rolex GMT-Master. So I asked him about it. He told me he bought it on his way to Vietnam over 30 years for a "mere" $700. I said "Then you must have been an officer". He chuckled and confirmed. He flew in a gun-ship and operated the infa-red.
    The watch itself was pretty beat-up. Scratches, and crystal cracked, but it still looked awesome. He said it was a "poor" time-keeper and required adjustments often, and service costs are high.


    - or -

    I have purchased this good looking but highly unreliable watch last fall.For the price all I had was a good looking bracelet, the accuracy of this watch was something left to be desired, frequent repairs, and in my books a total rip-off. I now own a Audemars Piguet and absolutely love it.

    Of course, some owners might prove a little touchy on the subject.

    For the record, I own an unreliable Swiss-made watch. Philippe Charriol. I bought it because I really liked the looks, and it wasn't too expensive.
  • I think we can go back and forth on this, I do agree with many of your points, but ultimately, I think reliability is the number 1 issue that these brands had to work on, and it's not just simply sorting out all the bugs, but changing people's perception of its reliability. Poor reliability means poor resale value. Let's admit it, a lot of these rich people can afford to buy these luxury cars, but they still hate to lose 50% of the value after a few years. Also, in reality, a lot of people in the nation's top 3% income bracket can afford the lower end of these premium brands, but they just can't afford to run them.

    I could go on and break down my analysis, but it's starting to sound like a college research paper to me... so probably not. I do want to say, most auto magazines I read in the 90's identified reliability as the number 1 problem with these super premium brands.

    BTW- here's the link to Edmund's long term test on its Ferrari, very interesting. Do you think the editors will be buying another Ferrari soon?

    http://www.edmunds.com/insideline/do/Drives/LongTerm/articleId=49771
  • brightness04brightness04 Posts: 3,151
    I don't see here is how their reliablity has made any difference when they never traded on reliability in the first place

    Well, "never" is a long way to look back. Most prestige brands made their names trading on reliability in the first place, including the grandaddy of them all, Rolls-Royce. At a certain point in a marque's history (for cars or for watches), the groupies take over, and the products get purchased for their "exclusivity," which of course makes for a conundrum for the manufacturer, as you so aptly pointed out regarding how the new Rolls are not doing so hot due to high pricing. When "exclusivity" becomes the selling point, it makes the product line highly cyclical. A few more years of good sales volume for Bentley, do you think it will still be perceived as "exclusive"? probably not. Selling on "exclusivity" is not a sustainable marketing position; that's why practically all the brands selling on that point are owned by one mass merchandizer or another.
  • deweydewey Posts: 5,243
    My Rolex lasts longer than you and I several lifetimes over.

    Sounds like my wife's 83 MercedesBenz 300D! This heirloom will continue being a part of our family as long as it does not malfunction! (I thought of using TNT but wont since this car has nostaligic value) ;)
  • brightness04brightness04 Posts: 3,151
    Sounds like a Lexus commercial nowadays, doesn't it? No idea why Europhiles think quiet-as-a-tomb is a sin.
  • brightness04brightness04 Posts: 3,151
    Keeps running (like any other mechanical watches that use diamonds at friction points; industrial diamonds are not expensive at all; my no-name self-winding mechanical watch has a dozen of them), but not necessarily good time keepers.
  • brightness04brightness04 Posts: 3,151
    A small point of correction:

    Also, in reality, a lot of people in the nation's top 3% income bracket can afford the lower end of these premium brands, but they just can't afford to run them.

    According to income tax data, the cut-off point for top 1% household/filing-unit is only $350k, and the cut-off point for top 5% is only $140k. I'm well between these brackets, probably close to your postulated 3% mark . . . yet as much as I love cars, I can only afford to keep 2-3 cars each at $30-40k, a small fraction of the $170-350k aking price of those top-end prestige cars. Just goes to show how rarefied the field of buyers of the cars under discussion really are. . . how vulnerable the manufacturers are to any cyclicity. Just an injection of reality into this discussion. Personally, IMHO, Rolls and Maybach are out of their collective minds asking $350k for a car (and Lexus will eat their lunch in a couple decades ;-)
  • brightness04brightness04 Posts: 3,151
    A lot of Ferrari's income was from tobacco ad's on their race cars. Let's see what happens when those ad's phase out in the next several years.

    Very good point. Ferrari actually makes more money from souvenir sales than car sales . . . in other words, it has transformed from a car company to a "marquee company." ;-)
  • lexusguylexusguy Posts: 6,419
    I have a Rolex President, that I bought used in 1988. You dont buy one of these for "accuracy for the dollar". You can get a watch that syncs with the atomic clock for $50 at sears. Accuracy and reliability are not the same thing though. My President is 25 years old, and I have little doubt that it will last another 25 no sweat. In today's disposable culture, there is nothing else like it.
  • lovemyclklovemyclk Posts: 351
    I'm afraid your Rolex comment is meritless. I purchased my Submariner in 1986 and it has been as solid as a bank vault, with only Rolex-recommended cleaning performed to date. As a mechanical watch, no batteries need to be replaced. This watch will run for generations and still looks and feels new...

    As for the "show" comment, not all Rolexes are solid gold Presidentials. Bunch of Execs I worked with welcommed me to their SSR club, not open to any gold Rolex wearers... SSR=Stainless Steel Rolex :D
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