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High End Luxury Cars

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  • sysweisyswei Posts: 1,804
    It might be necessary to click on the "Auto" icon and then click on "Automobile Ratings" to get at the right screen, which asks you to "Pick your cars".
  • sv7887sv7887 Posts: 351
    Hi all,

     

    I wasn't saying that MB is on the verge on insolvency. But these sort of things contribute to the buyer's decision. I just picked up a Financial Times detailing MB's profit and reliability issues..Are you saying this has NO impact whatsoever on the public? Why would a reputed newspaper like the Times bother to report it then? Regardless of what you say, people to pay attention to the likes of the FT, Consumer Reports and JDP. Every time one of their surveys come out it's plastered all over the media. People don't just blindly buy cars just because it's "Pretty."

     

    Actually people do think like that..It was a primary reason for the demise of Pan Am..Much of the flying public "worried" whether it was safe to book with them. Travel agents hesitated to book on them. Eastern was another example in the Lorenzo years..They were fined for various safety issues and paid dearly for it in terms of bookings..Like it or not, negative media reports do affect people's thinking..If Lexus were to have repeated recalls I'd think twice about it.

     

    Actually that Fuel Pump and Transmission issue is a known one, they recalled a bunch of LS430's last year...If you want to go that route, you'll still see Lexus trumps every German nameplate in that respect. Oddly enough Lexus took each car back did the repair and returned it cleaned with a full tank of gas..If that wasn't enough a $200 gas card was sent to each customer..I just got an apology from Lexus about the '02 I traded b/c of some issue with the Lexus Link that I never even knew about..With that apology came a $50 gas card!! That's called committment to the customer. Lexus stands behind their product, pure and simple.

     

    SV
  • merc1merc1 Posts: 6,081
    "But these sort of things contribute to the buyer's decision. I just picked up a Financial Times detailing MB's profit and reliability issues..Are you saying this has NO impact whatsoever on the public? Why would a reputed newspaper like the Times bother to report it then? Regardless of what you say, people to pay attention to the likes of the FT, Consumer Reports and JDP.

     

    We've been over this before too, and saying that people pay attention to JDP and CR is a given, but that doesn't have anything to do with a company's corporate health. Yes a many people do use CR and JDP in the buying decisions. Yet even with all the JDP and CR stuff "plastered all over the media" BMW and Mercedes both had record years in this very country last year? Either some here take these surveys too seriously or thousands of buyers couldn't care less. What is the explanation behind this? Some people actually buy BMWs, Audis, and MBs because that is the car they want knowing full well what the surveys say. There is proof of that right here on Edmunds for all three brands.

     

    I myself would have expected MB in particular to suffer a sales drop back in 2002-2003 when it seemed like every month there was a new damaging article about quality, but they didn't.

     

    Nor is there is there any evidence to support that a bad press in the WSJ/FT about a car company's balance sheet or earnings has stopped buyers from buying a Mercedes, VW, Chrysler or any other troubled car company. Absoulutely none. Again except for maybe Isuzu and Mitusbishi. The former, Isuzu has been reported to be leaving by several sources, though they say they aren't. That type of press would deter me from buying one of their cars for sure, but to say that is happening with MB is pure fantasy.

     

    People worry about flyng has nothing to do buying a car.

     

    The Times reports and publishes a story because they can. They also do it for the same reason anyone else does, because this is a hot subject to them....still doesn't mean it matters or that everyone considers it the bible.

     

    Now if there is some survey and/or evidence that buyers are monitoring the corporate health of a company and/or it plays a role in their buying decision I'd like to read about it. Not the reliability surveys, I'm talking about the balances sheet, CEO changes and corporate health stuff so often hyped here, making a difference in actual buyers decisions. Where is the proof of this mattering so much? It surely isn't in the 2004 sales totals for BMW or MB.

     

    If this were so true then buyers would have ignored Audi, Nissan, and now Chrysler's newest products to the point where they wouldn't have been able to turn themselves around or at least start to do so.

     

    M
  • sysweisyswei Posts: 1,804
    imho both side here have some valid points. I mostly agree with merc1 that financial performance has little impact on most people's current buying decisions, except in those cases where one might question whether the company will be around in 5-10 years to service your car, which isn't the case with MB. However, there might be a very few potential buyers who might wonder, "if I buy an MB now, will corporate profit pressures somehow affect me down the road? Might MB find some way to cut costs/increase revenue in a way that hurts me after I buy the car?" For instance, what if MB raised parts prices significantly in order to shore up the bottom line, and I needed some replacement parts?

     

    It is also true, as others have pointed out, that near-term profitability issues may impact what happens, product-wise, down the road. For instance we could see cost cutting in R&D, or fewer product variations, or more parts sharing with Chrysler, that might not be welcomed by MB buyers.
  • oacoac Posts: 1,594
    you stated: This thinking that buyers are incorporating some type of corporate health check into their buying decision is a pure fantasy by Lexus owners/fans on this board. All made up with no basis in reality.

     

    To the ultra-high end buyer, maybe the financials don't matter as much bcos what they are buying is the name and the cache recognition. Afterall, how practical is a Bentley Arnage or a Ferrari Enzo for everyday driving ?

     

    But the 99% of the market that all MBs play in has a lot of savvy buyers who spends time checking out the facts about the car they are buying and who is behind the car. MB is losing market share because the savvy buyer has wised up to the over-priced and loss of shine of the MB badge, hence the poor financials. When the buying public rejects MBs for Lexus, Audis, BMWs, or whatever else meets their needs, then MBs financials reflect that. And if you cannot see the direct correlation in that simple fact, then I guess this debate is truly pointless.

     

    Companies that produce goods to the market live and die by their products' acceptance in the market. When the market sours on a product, that's its death knell. Mitsu and Isuzu are in trouble bcos their products suck (except for a few), no one wants them, and they've got bad management. If MBs follow the trails blazed by these aforementioned companies, it will go the same route. That simple.

     

    How difficult is that to understand ???
  • ljflxljflx Posts: 4,661
    Let's just be basic about this ok. First - The type of buyers we are talking about indeed monitor businesses and how they are doing because many are business people in the first place. It's in the news and in your face and unavoidable as often it's on the front page. When you read those things you give a lot of thought to a business' financial health before you pluck down $70-100K on a vehicle. Second - The reliability that you have such a hard time dealing with has hurt your brand enormously. Third - As another poster pointed out so well, many of MB's 1mln car sales are much lower end cars with thin profit margins that they wouldn't even bring here. So the loss of momemtum in the US market is a killer for them. Last - financial problems severely restrict future movement. At a time when competition is about to go worldwide from an incredibly strong company that surpassed their US unit sales and profits in less than 10 years with half the bandwidth that is a serious issue to have to deal with. It's worse when you have the costliest production in the world and are putting out a product that gets poor reliability ratings that are sinking lower and lower each year. It's worse still when that company has targeted you, is very wealthy and is about to get quite aggressive scaling up what had been a narrow bandwidth attack.

     

    You look to the past and a handful of performance cars and think MB will hold its status icon forever because of who they are. I look at the future and view it from a business angle and see a totally different picture. And as I said earlier business is littered with former number 1's that have dropped many notches. It was well over a year ago that their sales started to drop and both of us said let's see if it continues. It's worsened in unit sales and in the fact that they have had to drop prices to keep the sales from slipping even more. They haven't dropped MSRP's but that's like looking at the Prime rate as a true business interest rate. It's easy to prop up dollar sales - you do it with subsidies that show up as expenses and a P&L that then overstates revs and expenses. The proof of the pudding of the real problems here show up in the type of leadership now sought and a barely profitable business.

     

    I am hardly saying MB is going bankrupt. They will recover at some point but it will take longer than anyone thinks. It always does. But when they recover it will be at a lower point than their height and they will lose that number 1 mantra - in my opinion. Unlike the long path to recoverability, losing a number one spot almost always happens quicker than expected and as a surprise to many. Don't count me in that last group when it happens.
  • that you are wrong about the typical high-end buyer... Maybe your view is tinted by being here on Edmunds..

     

    I think most buyers of any make, do little or no research on the car they buy, and have no idea how the corporate parent is doing...

     

    Other than Mitsubishi, I can't think of a single car company doing business in the U.S., that I would be worried about...

     

    regards,

    kyfdx

    Moderator - Prices Paid, Lease Questions, SUVs

  • i find it odd the vitriolic responses directed at MB and the other German automakers. MB makes great cars. for anyone to claim that MB is on its last gasp and that Lexus...a brand that basically only existed in the USA until this past year is going to surpass MB in desirability is just crazy. Lexus has made some great strides in the USA. they are the perfect Buick. when it comes to luxury, technical innovations, progresses in safety and design MB has nothing to fear. oh wait i almost forgot...Lexus does have water repellent glass!!!

    like i said earlier....it seems to me that the people who purchase a Lexus need MB to fail so they feel validated in their purchase.
  • ljflxljflx Posts: 4,661
    Quite to the contrary - it seems you need to put down Lexus to feel a brand supremacy. Just go back and read your last post. Where did you see any of us put down the cars that MB is building other than to say they have done badly in reliability studies. What is being said here are factual results, unless of course you think the Financial Times, The NY Times, CR, JDP etc are lying to all of us. Many of your points in your posts are purely your subjective opinion.("Lexus is a perfect Buick" - give that nonsense a rest Puhleeze).

     

    By the way were you one of those who said IBM had nothing to fear? Big difference between saying someone is on their last gasp and saying someone's days as number 1 are numbered.
  • ctsangctsang Posts: 237
    I agree with ljflx. People who put down Lexus are those who are jealous of its better built cars. They spent more but get less (including prestige). I know because I used to be one of them.
  • If Lexus owners wanted this sign of so called status they would buy a Mercades or BMW...

     

    I think Most lexus owners would care less if you notice their car or not...I actually like a less noticable car...

     

    The LS is not stunning but it is not ugly...It is just right for those of us who buy them...and that is just one of their advantages...the fact that are the cleanest running of the Gas V8s, their incredable durability and dependability, their superior crash test ratings, the great (but pricy) service...the smooth, quiet ride, the great sound system....THE PRICE...It is just an awesome machine.
  • oacoac Posts: 1,594
    Yeah, IBM had nothing to fear ! So did Xerox, HP, Kodak, Microsoft, etc... These are companies with rock-solid reputations and clout, but now face severe competition so much that some have lost their lofty positions (Kodak, Xerox), or are struggling to hold on (HP, Microsoft). Arrogance is always one way to sink the ship. MB fans are sure excited about their cars, so much that MB now is #4 selling lux-mobile in the NA market. How far does MB need to fall before its fans wake up and smell the coffee ???
  • ljflxljflx Posts: 4,661
    As I said business is littered with former No. 1's. You'd have to be a fool to think nothing is ever going to change. That's why heritage isn't worth what many think it is. Being able to read the tea leaves in advance of the cycle change was a big part of my job and it's why I always loved big deal-making and strategy.
  • Well, most of the MB fans on this site don't own an MB. But, I think it is safe to say that a significant number of past MB owners made the choice not to buy an MB again after the crap car they were given...
  • ljflxljflx Posts: 4,661
    You make a very good point. Most of those I know switched out of MB to Lexus recently because of the problems and in the past because of the price/value equation. Back then MB's were made the way they are supposed to be made - bulletproof relative to time period - so the pricing and not the quality was the cause of the switch. Today it's both. But the fact that so many Lexus people are former MB people makes these Buick claims by MB fans look all the more bad.
  • I've got idea.

     

    lets pretend that Lexus is the WORLDS number one luxury auto manufacturer. would that make the LS430 a nicer luxury automobile than the S class?

    would it offer more options and drive-trains? would it carry more patents? and even if Lexus was the WORLDS number luxury auto manufacturer...would they sell more LS430's than S class's? well...what do you guys think?

    would you feel more secure in your purchase?

     

    MB has a heritage that is born of time and hard work. wish all you may but i doubt MB or any of the other German big 3 are going to role over a cede to Lexus or any other brand their very tight grip on the WORLDS luxury car market.

     

    like I've posted before.....Lexus is a nice car. a car built to a price point. a price point specifically undercutting the German competition. this instantly helps it's sales but

    also is it's Achilles heal when trying to bring the Lexus brand up market. the car is instantly limited.

     

    one more thought....i've owned close to 20 Japanese made vehicles. why am i not driving a Lexus?....no matter how affordable or reliable they may be...i would still have to look at it everyday and ask myself....how exciting is this?

    but hey...maybe i would be able to say to myself....well their balance sheet looks good!!
  • sysweisyswei Posts: 1,804
    "when it comes to luxury, technical innovations, progresses in safety and design MB has nothing to fear"

     

    1. luxury. What do you mean by luxury? Does a marque need to be number 1 in status in order to be luxurious or something? If so, you can't really expect a new brand to catch up in status to a 120-year old brand in just 15 years, can you?

     

    2. technical innovations. No doubt about it, in 120 years MB has contributed more technical innovations than Lexus has in 15. So?

     

    What has MB done for the industry in the last 15 years? Do any of its RECENT innovations even begin to compare with the importance of hybrid powertrains?

     

    3. safety. Yes, MB has managed to do more here in 120 years than Lexus has in 15.

     

    4. design. If you mean styling then I'll grant that, FOR ME, MB wins on styling. But beauty is in the eyes of the beholder.

     

    "MB has nothing to fear"

    Judging by what has happened in the last 15 years in the U.S. market, I'd say they have quite alot to fear. Do you find it meaningless, in a competitive sense, that a brand has gone from nonexistent to number 1 right under MB's nose? Sounds like you're in denial.
  • ljflxljflx Posts: 4,661
    "MB has a heritage" - That and five bucks will get you a Big Mac, fries and a soda. I am afraid you just don't get the business angle. But if the European nameplates are so great why the heck did you buy 20 different Japanese cars?
  • i purchased Japanese vehicles when i was younger. as my income grew along with my interest in automobiles i switched over to German automobiles....and i have never in anyway

    regretted that. if the LS 430 is the most attractive and versatile luxury automobile that the Japanese can offer.... I'm just not interested. i truly believe if you are an automobile enthusiasts the German brands have so much more to offer than anything currently coming out of Japan.

     

    everyone thinks than I'm dumping on Lexus. i cross shopped Lexus every time i shop for a new car. they manufacture a good vehicle. but when you compare them to the German competition they are still more than a step behind. and guys i know they do well in the automotive surveys...and that's great but if you think there is such a dramatic difference between Lexus quality and German quality you are hanging your hats on such a small difference that in the end to me it is a non issue.

     

    you know what guys...i also drive an 04 GMC Denali and an 04 GMC crew cab. both of which have been trouble free. go figure....American scrap iron!!! and I've had many GM truck products so the reliability and satisfaction i am having with these 2 particular vehicles is not out of the ordinary. like i said all cars are built well. if you as purchasers need that little bit of an edge while you purchase a car that's great for you. keep in mind you are excluding many more exciting vehicles that...by most peoples measure are more attractively designed.

     

    as for MB worrying about Lexus I'm sure they do. i would think they worry about Audi and Cadillac also. don't forget though...the S class is still the worlds luxury king and i really don't see that changing anytime soon.

     

    as for being number 1...in the US? everybody keeps pointing to this as if this is the definative measure by which an automobile manufacturer is to be judged. Lexus is non existant in Europe. the overall sales figures for the A8, Sclass, and 7 destroy any sales numbers from Lexus. is it completely insignificant...no not at all. Lexus is to be congratulated but in a proper context.
  • ljflxljflx Posts: 4,661
    They haven't set up shop for Europe, other than to throw a seed for the future in there so what would you expect? That's all about to change in the next two years though. By the end of the decade the landscape will be very different in Europe and that will be just the beginning. You act like they have a broad distribution base and can't sell a car there. Just wait till the effort is increased mightily in the next few years.
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