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High End Luxury Cars

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Comments

  • garyh1garyh1 Posts: 386
    Good post, TagMan. But I think you do have to differentiate between free maintenance (which you discussed eloquently) and extended term warranties, such as 10/100 or 7/70. There are different customer concerns being addressed, and different risks/costs involved for the manufacturer if they underestimate the incidence of future repairs. Heck, if I recall correctly, DC/MB has admitted that their recent earnings have been hurt by high warranty repair costs (including recalls) just within the standard warranty period.
  • oacoac Posts: 1,594
    It's still all about marketing in the case of the "free" maintenance, and it's a positive condition from ANY angle. To somehow twist some free service into a deeper, sinister admission of poor vehicle reliability by the upper management is stretching things WILDLY. Or to make it sound like some terrible trick to fool us all. C'mon now. As I pointed out, it's a marketing tool to gain confidence, peace of mind, to roll out the red carpet just a little further, and open the door a little wider to invite customers into the driving experience.

    I do agree to a point. To those who state that the BMW free maintainance is only oil changes. Here is what BMW states on their website:

    "Full Maintenance includes items that need replacement due to normal wear and tear, provided wear and tear exceeds BMW specifications. This includes items such as brake pads, brake rotors, and wiper blade inserts that are not covered by the original New Vehicle Limited Warranty.

    Any adjustments required due to normal operating conditions are also included."

    So its not just oil changes, is it ? Wear and tear items can cost quite a bunch... depending on one's driving habits and conditions and some luck/unlucky things that may happen. These would not be small change to BMW to absorb. MB found out pretty quickly how these costs could eat into their profits, and discontinued it.
  • nvbankernvbanker Posts: 7,285
    "Changing topics, on reliability personally I'd like to see Lexus "stick it to the competition" by changing their standard warranty from 4 years to 5 or even 6. Of course they won't because they have to consider the bottom line."

    I'm not sure it would impact their bottom line much if they did, frankly.... and as you said, they don't need to.
  • deweydewey Posts: 5,243
    I have no clue whatever you are trying to say here... Maybe you should direct this to hpowders instead of me pls ?

    My point was to show how silly your conspiracy theory about BMW was! You claim that BMW engineers cars in order to break down after warranty expriation! What nonsense!

    Next time you make a claim back it up with facts! This is not a creative writing session!

    If BMWs had costly problems after warranty then BMW resale values would collpse! Who would want to buy a money trap? And I think we do know the truth about BMW resale values by now dont we?

    In fact check the costs for BMW extended warranties, they are not at all that hefty when compared to competitive marques. So much for your theory or should I say myth!
  • nvbankernvbanker Posts: 7,285
    "Maybe I am just a bit too thin skinned and sensitive but to me the ultimate form of smugness is when a competitor like Toyota talks about a fellow competitor like GM as a disability case that needs to be treated altruistically."

    Toyota has been smug for decades, even arrogant. But in this case, it's justified. GM doesn't have a clue what to do with their problems, and if they did, they lack the power to do it. That elephant is just way to fat to tapdance anymore.

    Every luxury marque, IMO, is chasing BMW right now. Every base marque is chasing Toyota and Honda. That may change, but nobody is chasing GM or even Ford anymore. Since I was born, nobody chased Chrysler. That's why the UAW never threw a strike on Chrysler. Who cared?
  • oacoac Posts: 1,594
    My point was to show how silly your conspiracy theory about BMW was! You claim that BMW engineers cars in order to break down after warranty expriation! What nonsense!

    Your statement is bogus and fictional! Next time you make a claim back it up with facts! This is not a creative writing session!


    Why so combative a tone ? Maybe you haven't noticed this, dewey, I had stopped responding to any post from you. Why ? Bcos I believe you like to argue for the sake of arguing. Just not worth my time... You are free to read whatever insinuation or innuendo you like to my post even when I make nothing even remotely close to whatever you see in it. If you see conspiracy theory in my post, so be it... why should I dissuade your mind from seeing what you'd like to see ?
  • hpowdershpowders Posts: 4,269
    Heh! Heh!
    Using my name as a pseudonym eh?
    The plot thickens. ;)
  • hpowdershpowders Posts: 4,269
    Yup! Some folks love playing devil's advocate no matter what!
  • deweydewey Posts: 5,243
    Any successful car company may appear arrogant!

    That is why all German luxury marques appear arrogant including MB. MB sales have increased quite nicely these past few decades despite the claims of some forum members.
  • hpowdershpowders Posts: 4,269
    The point is BMW has courageously put their reputation on the line by offering free maintenance.
    This gesture is a tremendous vote of confidence in the quality of their vehicles.
    They stepped up to the plate when nobody else would.
    In doing this, they show serious movement in alleviating the perception that BMW's have serious reliability problems
    This makes me feel very good as a BMW consumer even though since 1993, I have never had any trouble with any of my 3 BMW's.

    Why doesn't Mercedes step up to the plate in a similar way?
    Because in MB's case such an offer would bankrupt the company IMHO!
  • hpowdershpowders Posts: 4,269
    Heh! Heh! Relax Dewey. It was only an attempt at satire.
    Don't take it so seriously.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Heck, if I recall correctly, DC/MB has admitted that their recent earnings have been hurt by high warranty repair costs (including recalls) just within the standard warranty period.

    That's significant, IMO. Can you back that up, please?

    BTW, I was not referring to the service contracts which are purchased by the customer at various expiration terms, differenct levels of coverage and deductibles, but rather the included free maintenance sponsored by the manufacturer. Yes, it is sometimes more than an oil change. Even more reason to give it significance and credit.
  • hpowdershpowders Posts: 4,269
    Whoops! Toyota has recalled 75,000 04-05 Prius vehicles for the "minor" problem of the electronic control module causing the gasoline engine to shut down and dramatically weaken the electric motor.
    A one year waiting list for this?

    With GS exploding engines and now prickly Prius's, Toyota had better watch their back! :lemon:
  • deweydewey Posts: 5,243
    Heh! Heh! Relax Dewey. It was only an attempt at satire.
    Don't take it so seriously.


    Thanks for informing me! Now I dont have to look out for those two hitmen driving a BMW M5! ;)
  • hpowdershpowders Posts: 4,269
    Trust me. There would be no escape with that M5 after you!
    ;)
  • deweydewey Posts: 5,243
    Why so combative a tone ? Maybe you haven't noticed this, dewey, I had stopped responding to any post from you. Why ?

    No I have not noticed! But I like your two step approach.

    1)Make an unsubstantiated claim
    2)If questioned about your claim then act offended and boycott the questioner!
  • oacoac Posts: 1,594
    No I have not noticed! But I like your two step approach.

    1)Make an unsubstantiated claim
    2)If questioned about your claim then act offended and boycott the questioner!


    Can you please provide the quote and the post where I made any CLAIMS of BMW's conspiring to engineer poor cars ? Where exactly were such CLAIMS as you so stated made ? I'd like very much to see such quotes, pls...
  • deweydewey Posts: 5,243
    Here you go! BMW is faced with problem free cars during warranty and bingo after warranty BMW can recoup their costs with maintenance! Why do you single out BMW when this applies to every single auto marque including Lexus!

    Or maybe BMW figures the car should hold up for the entire time of the *free* maintainance, especially since they are giving such a good deal on their leases. Then when the leases get turned in, and someone else buys the now high-milage car, the new owner has some maintainance to do, and they can recoup some of the costs
  • oacoac Posts: 1,594
    Which part of that post CLAIMS any conspiracy theory ? Or was that something YOU read into it ? Maybe in your view high milage cars don't have maintainance issues like regular scheduled maintainances at 60K/90K/120K and beyond ? Are these high miles/services covered under basic new car warranties ??? Would any dealer service shop not recoup lots of money from these services ? Seemed pretty simple to me, except if you have to read other motives to my posts...Using BMW in the post was purely in the context of the discussion... My 99 LS cost me $1300 for its 90K mile service... That is not chump change, you know.
  • deweydewey Posts: 5,243
    There was some rumor about BMWs that you don't want to own one out of warranty due to repair cost. Well, why not offer *freebie* to lure more buyers upfront. Let the shmuck who buys it used pay for the real cost of ownership. I

    Let the schmucks pay after? So BMW owners are schmucks? OR does BMW view their customers as schmucks who have to pay big bucks after the warranty expires? You dont want to own BMWs after the warranty expires? So they are a money trap unlike all other marques? I dont know the answer to that but I do know that your claim is false!

    I called it conspiracy instead of being false to add dramatic spice to that Heinrich letter but certainly failed in that attempt.
  • oacoac Posts: 1,594
    Let the schmucks pay after? So BMW owners are schmucks? OR does BMW view their customers as schmucks? I dont know the answer to that but I do know that your claim is bogus!

    The real cost of ownership comes when any car hits high milege. Yes, I said shmucks who buys used car pays for the real cost of ownership. Isn't that obvious ? Oh I forget, I dare to mention BMW in the same context with shmucks... Ahhhh ! Got it. You win... Buyers of used BMW are not shmucks... Happy now ?
  • deweydewey Posts: 5,243
    If I used the words [non-permissible content removed] and Lexus in the same sentence I know I would not walk away here unharassed!

    I am very happy now, thank you.
  • hpowdershpowders Posts: 4,269
    BMW is sending out a powerful message with their 4 year free maintenance plan.
    They are the only auto manufacturer I know who is doing this.
    You know MB would never attempt this. They'd be out of business in a year.
  • oacoac Posts: 1,594
    If I used the words [non-permissible content removed] and Lexus in the same sentence I know I would not walk away here unharassed!

    But where are the conspiracy CLAIMS you were so offended by ? Now its BMW shmucks.... Hmmmmm !!! This is what I mean that you like arguing for the heck of it... I'm done.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Jaguar did indeed have an included maintenance plan on the '05 models, but guess what? . . . no more! Discontinued on the '06. What's that say?
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Put any spin you like on this:

    FRANKFURT, Dec 7 (Reuters) - German premium carmaker BMW (BMWG.DE: Quote, Profile, Research) widened its lead over arch-rival Mercedes Car Group in November as sales grew by 9.5 percent, fuelled by brisk demand for its BMW 3-Series saloon, data showed on Wednesday.

    Sales of 114,044 cars last month put year-to-date deliveries above BMW's level for all of 2004 and reinforced its bragging rights over DaimlerChrysler's (DCXGn.DE: Quote, Profile, Research) premium division.

    "We can already predict that we will be the most successful supplier in the premium segment worldwide for 2005 as a whole," said BMW sales and marketing chief Michael Ganal. "We are growing more quickly than our relevant competitors."

    Deliveries of its core BMW-brand cars rose by 10.4 percent to 98,788 vehicles last month compared to the same period last year, while sales of its Mini subcompact grew 3.7 percent to 15,171 cars. It delivered 85 Rolls-Royce Phantom luxury limousines, up 6.3 percent.

    For the first 11 months, group sales rose 10.8 percent to 1,211,177 cars, keeping it well on track to hit its forecast for unit sales to grow at a high-single-digit rate in 2005.

    Mercedes Car Group said on Tuesday that unit sales rose 1.2 percent in the first 11 months to 1,094,500 Mercedes-Benz and Smart brand cars. It did not break out a separate number for its luxury Mayback limousine brand.

    BMW brand sales in the first 11 months totalled 1.02 million cars, leading Mercedes-Benz at 961,600. In the battle of urban chic minicars, Mini brand sales topped 190,000 while Daimler's snub-nosed Smart was just shy of 133,000 sales.

    Sales at Audi (NSUG.DE: Quote, Profile, Research), the premium car arm of Volkswagen (VOWG.DE: Quote, Profile, Research), grew by 8.8 percent to nearly 767,000 unit sales in the first 11 months of the year.

    Have F-U-N!
    TagMan
  • garyh1garyh1 Posts: 386
    I believe DaimlerChrysler has referred to this issue in their quarterly earnings releases several times, but I can't quickly put my hands on them, and I really don't care to spend a lot of time looking for the sentence. Suffice to say, for example, when they recalled 1.3 million cars in April, it cost them some money.

    Here is a quote from a JP Morgan research report dated 10/24/05 that references the issue ("provisions for product guarantees relating to earlier periods" - in finance lingo, that means setting aside even more money now to pay for greater than anticipated warranty repairs, which brings down current earnings):

    "Mercedes Car Group
    MCG posted a 3% increase in revenue, below our expectations, on unit sales up 6%, and a slightly positive currency impact, implying 3-4% mix deterioration consistent
    with the replacement of the S Class, flat E class sales and higher sales of the A and B classes. The €436m profit contribution includes a €60m reversal of earlier legal
    provisions, ie met consensus and missed JPM. Results were burdened to some extent by the return of provisions for product guarantees relating to earlier periods (€289m
    at group level, note 14b page 29 of the release)..."

    Hopefully that's enough proof for you. If not, perhaps someone else like ljfx can add some more references....

    But re BMW, an extra oil change here or there or replacing some wiper blades isn't going to have any significant effect on current earnings. Since at least 2002, the expense of things like "free maintenance" is supposed to be reserved for when the car is sold (FASB Interpretation No. 45). Of course, car companies can and do play with these reserves a bit to smooth out earnings, but you can bet MB didn't budget for the recall of 1.3 million cars when they were sold!
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Here's even more testimony.

    The 2006 AUTOMOBILE MAGAZINE top industry honors were awarded to:

    * Automobile of the Year: BMW 3-series--The latest version of BMW's superior sport sedan drove off with this year's top award. The 3-series is a testament to BMW's commitment to excellence and to the company's long-term thinking. BMW has produced a car that is the gold standard for its class, something that all other automakers feel they have to measure up to. A car that continues to get better and better with every evolution.

    Anybody surprised?
    TagMan
  • garyh1garyh1 Posts: 386
    Here's my "spin":

    If the 3 series is leading the way for BMW, and the 3 is the car that is least Banglized (which virtually every reviewer has said) and doesn't have iDrive, imagine what BMW total sales would be if the 5 and 7 weren't as Banglized as they are, and didn't come with iDrive (or at least weren't suffering under the bad press the earlier generation iDrive received). Scary.
  • ljflxljflx Posts: 4,672
    "Here is a quote from a JP Morgan research report dated 10/24/05 that references the issue ("provisions for product guarantees relating to earlier periods" - in finance lingo, that means setting aside even more money now to pay for greater than anticipated warranty repairs, which brings down current earnings)"

    Therein lies the reasons they killed off free maintenance:

    A - past expenses overwhelmed the accruals they set up so they had to go backward and up the ante for every (still) qualifying car sold since day 1 of the freebie

    B - The auditors could probably be called on the carpet that this resulted in an overstatement of revenue. So hence they would no longer treat future maintenance as an expense accrual but instead as a revenue reduction. Same P&L effect but you rather have it as an expense of course.

    C - the warranty accrual on every car sold would require an upward adjustment and could also be viewed as a revenue reduction going forward if the problem is viewed as persistent in the past.

    No wonder they are going for a price increase on the S. They want you to pay for their past mistakes and give you a bunch of marketing BS as window dressing.
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