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High End Luxury Cars

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  • ljflxljflx Posts: 4,687
    Prices should be tiered and then value is within each tier. If I read OAC right he is saying anyone buying the lux segment is not buying value just by definition of what the segment is. But within the lux segment itself you may start to look for values/best value. Sought of like deciding you're not looking at anything under $50K but over $50K you want the most for your money. But tiers have to be reasonable. I'd exclude an S600 and BMW 760 from the cars we discuss here and I'd exclude a Maybach from the S600 tier.
  • oacoac Posts: 1,594
    "...anyone buying the lux segment is not buying value just by definition of what the segment is. But within the lux segment itself you may start to look for values/best value"

    Thanks, Len. Just exactly what I am trying to say :)
  • designmandesignman Posts: 2,129
    "...anyone buying the lux segment is not buying value just by definition of what the segment is. But within the lux segment itself you may start to look for values/best value"

    Hmm, to me that actually seems opposite to what you said. As Dewey suggested, you were creating an absolute when everything is relative.

    Anyway, I’m not going to belabor this. Another day, another klatch. Feel free to get the last word in. But just remember, there is no absolute here, only Stoli and Grey Goose.

    ;-)
  • deweydewey Posts: 5,243
    Good article on Wall Street Journal dated Dec. 8th about Porsche.

    PORSCHE

    Unfortunately you need a subscription to have access, but there are some parts of the article that grabbed my attention.

    1)Porsche is no longer content just being a little car company that makes big profits. Can Porsche maintain its cachet, and its hefty profits, as it reaches out to a broader class of customers?

    The above reminds me a question that Warren Buffett raised sometime in the 1960s:

    What business would you choose to own: A business with 10 million dollars of assets with a 15 percent return on assets or a business with 100 million dollars of assets with a 5 percent return on assets?

    Unfortunately Porsche has not pondered Buffett's question in any depth and instead is choosing the path of a lower margin business with such vehicles as the V6 VW Cayenne. Porsche's pursuit may result in a bigger company but at the cost of having margins returns on assets that resembles mainstream automakers.

    2)Asked about the possibility of developing a minivan -- something DaimlerChrysler AG's Mercedes now offers -- Mr. Wiedeking said that "today it doesn't make any sense" but added that "you never say never in our business

    Yikes, the fact that Wiedeking would even admit the slight possibility of a a future Porsche minivan is scary.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    "...anyone buying the lux segment is not buying value just by definition of what the segment is. But within the lux segment itself you may start to look for values/best value"

    Thanks, Len. Just exactly what I am trying to say


    the Lexus guys are stating one of two things:
    1) The Lexus is not in the Luxury segment. or . . .
    2) Lexus buyers do not consider the Lexus a "value", because it IS in the Luxury segment.

    Which is it? You can't have it both ways.

    Also one of the Lexus guys said that the consideration of value stops at about the $65K range. Heck, since when does "value" have ANY price limitation upon it? There are houses in the multi-seven digit range here in California, and some of them are a good "value".

    READ THIS and UNDERSTAND:

    The price of a car has no limit as it relates to "value", so long as it is percieved that the car is worth MORE than the price tag attached!

    TagMan
  • The Sage of Omaha raises an interesting question, size vs. profits. (Incidentally, I think a better measure of return is ROI). Let me suggest that the answer lies in the answer to this question: If a company's stock falls 20% one year and then rises 20% the next, have you lost money, broken even or made money?

    Porsche needs to smooth out its earnings and to decrease the violatiltiy. If Porsche can diversify beyond just one platform (the 911, obviously) they should have smoother earnings and a more assured future. Certainly, this diversification will result in increased volumes and maybe even lower margins. But it will lower violatility and they won't face the risk of irrelevancy. Not that many years ago Porsche with just the 911 was on the verge of turning into simply an engineering consultancy. They were almost a teutonic Lotus Engineering Co. Now fully half the sales are the Cayenne and they are doing well. (Just imagine what Lotus could do if they had a Cayenne?).

    Incidentally, IMHO the best thing for Saab and, secondarily, for Porsche would be for Porsche to buy it from GM. Think of it: most mergers fail because of cultural problems. These guys seem to share the same culture, they have complimentary product lines, and a customer base that somewhat overlaps. Its not quite a marriage made in heaven but if the price was right, it might work.
  • ljflxljflx Posts: 4,687
    Let me clarify my point on this. People look for value in all tiers and in every product segment. Each person also defines value differently in each product segment depending on attributes sought. There is also a big difference in the item being sought across product segments. Buying expensive jewelry or homes is very different than buying expensive cars. Why? Simple - the first two can and usually (particularly in the case of homes) appreciate in price (unless you unfortunately bought in a bubble)whereas the latter will undoubtedly lose its price to depreciation, perhaps precipitously. So anyone buying a high priced car is obviously not seeking value in absolute terms because there is a 100% chance of losing 90%+ of your initial price in 10 years. Hence my comment that any lux car can never be a value.

    "the Lexus guys are stating one of two things:
    1) The Lexus is not in the Luxury segment. or . . .
    2) Lexus buyers do not consider the Lexus a "value", because it IS in the Luxury segment."


    What OAC is saying is that within this segment this is the best value - pure and simple. Is an LS a great value - No. Is it a great value in the segment it competes in? Absolutely. I don't understand why this is hard to grasp.
  • oacoac Posts: 1,594
    the Lexus guys are stating one of two things:
    1) The Lexus is not in the Luxury segment. or . . .
    2) Lexus buyers do not consider the Lexus a "value", because it IS in the Luxury segment.


    First off, we are not "lexus guys", we are Lexus owners.. a subtle but important difference. But on the substance of your question, can I pls refer you to ljflx's post(s) once again. He seemed to capture it quite well...

    Also one of the Lexus guys said that the consideration of value stops at about the $65K range...

    Huh ! Are you sure you have your reading glasses on ?

    The price of a car has no limit as it relates to "value", so long as it is percieved that the car is worth MORE than the price tag attached!

    You are not a sales guy, are you ? Sounded like one to me...
  • oacoac Posts: 1,594
    But just remember, there is no absolute here, only Stoli and Grey Goose.

    Since you want me to have the last word, I will take it :P
    True... no absolutes... The LS is NOT a value buy compared to an Avalon, but is a value buy compared to an S500. However, at a $65K price point, one can choose to buy 3 Matrix'es and still have a few thou to salt away for the kids College fund, take in a dinner and a movie... :) So who needs an expensive LS, 745, S500, A8, XJR, anyway ? I have my value car and its cheap to drive, cheap to maintain, and a fun little car to boot. Value ahoy !!!
  • ljflxljflx Posts: 4,687
    Plus I rather have 5% of 100 rather than 15% of 10.

    Porsche was always pychologically scarred by the desertion of sports car buyers in the early 90's. Having just one product line will do that to anybody. Why on earth would any business want to keep all their eggs in one basket. The danger is always trying to do too much too soon and it's more dangerous when you are small. Look at how quickly People's Express evaporated when it tried to expand beyond its niche. On the other hand MB's bulk allows it to withstand Juurgens bad management decisions. IMO Porsche needs to expand but measuredly and it should realize that everything it touches will not turn to gold.
  • designmandesignman Posts: 2,129
    What OAC is saying is that within this segment this is the best value - pure and simple. Is an LS a great value - No. Is it a great value in the segment it competes in? Absolutely. I don't understand why this is hard to grasp.

    That’s NOT what Oac said. YOUR point is quite easy to grasp. Oac’s original statement is the point of contention. The problem is you’re both trying to make it sound like you are on the same page. It’s a classic case of husband defending wife even though wife is clearly wrong. In this case it’s a marriage of Lexican cronies, double talk and waffling. Sorry, I ain’t buying it for a minute.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Interesting concept. I'll have to ponder it a bit, before I take a position on it, as I like to be open-minded. The interesting part is the "segment" part whereby the "value" is determined by contrast and comparison to other products within the SEGMENT. This is in opposition to determining value based upon consideration of a product solely on its own merits, or lack thereof, and how they (merits) relate to it's price. Personlly, at this point, I believe BOTH approaches have validity.

    As far as the "Lexus guys" vs. "Lexus owners" concern that "oac" expressed, let me just say that I believe that some of the advocates for certain marques do not actually own the marque. ;)
  • designmandesignman Posts: 2,129
    "So who needs an expensive LS, 745, S500, A8, XJR, anyway ? I have my value car and its cheap to drive, cheap to maintain, and a fun little car to boot. Value ahoy !!!"

    Yes, you've been talking like that since I know you. And I talk the same way, as do many others around here. Throw your LS in there too. It's a VALUE, just as my cars are, LJflxs, Lexusguy's Jag, Hpowders nicely leased 545. They're all luxury cars that are values! To quote a famous philospher... nuff said. Now you can have the last word.

    ;-)
  • merc1merc1 Posts: 6,081
    That’s NOT what Oac said. YOUR point is quite easy to grasp. Oac’s original statement is the point of contention. The problem is you’re both trying to make it sound like you are on the same page. It’s a classic case of husband defending wife even though wife is clearly wrong. In this case it’s a marriage of Lexican cronies, double talk and waffling. Sorry, I ain’t buying it for a minute.

    Whew! I'm glad you said this because that is exactly what all of that was. Lexus' whole being was founded on being a comparable car to the Germans for less money, that was the "value" in getting a Lexus over a BMW and especially a Mercedes-Benz. Everytime you read about these cars being compared you'll see where xxx thought that the LS was a better value than xxxx and so on, now we're supposed to believe that value has nothing to do with it. More Lexus double speak.

    M
  • hpowdershpowders Posts: 4,269
    I shopped around PLENTY to get that 545 lease!
    On a depreciating asset, one would have to be a fool not to do the research and get the best possible deal you can find whether it be on a 911 or a Camry.
  • ctsangctsang Posts: 237
    "Scorekeeper... take that point away from the Lexicans and give it to Team Euro. "

    Not so far, didn't I say I bought the Lexus because I can always depend on it since my other two, ie. MB and BMW are in shop frequently.
  • oacoac Posts: 1,594
    Designman: If you disagree that a $60K+ car is NOT value by itself but in comparison to higher priced cars of same class, what can I say to that ? IMO, buying a marque brand like ones we talk about here is not going out to look for value a priori. If that is not clear enough, then I don't know what is...

    hpowders: Shopping around for a $60K 545 is not shopping for value, imo. Why a $60K 545 and not a $35K 325i ? Both will get the job done on a practical level. Or could it be that the 545 is a higher status car than a 325 and that you can afford it as well ? That's the point I made about who needs these HELM cars, anyway ? Why did Toyota, Honda, Nissan, etc create a luxury unit if people who buys them are looking for VALUE ? You want a Toyota value, buy one of their Toyota-badged cars. You want snob appeal or brand marque, step UP to the Lexus club.

    Ever wonder why the more expensive LX470 sells MORE than the cheaper Land Cruiser it shares everything with ? Since I just bought an LX, I can tell you that buying a LC did not even cross my mind for 1 second. Was I thinking value ? Of course not... but that's just me...
  • ctsangctsang Posts: 237
    "let me just say that I believe that some of the advocates for certain marques do not actually own the marque."

    You made a boo-boo. Don't talk about people, talk about cars. As for me, come to my house and I will show you. When is a good time for you to go to HK?
  • ctsangctsang Posts: 237
    I think MB and BMW are better values than RR.
  • deweydewey Posts: 5,243
    So an important issue among luxury marque buyers is quality! Here is a future threat not only to Toyota but all expensive luxury marques.

    NEW DELHI — Automakers based in India and Thailand are making rapid gains in global competitiveness and could one day make the best vehicles in the world, Toyota Motor Corp. chairman Hiroshi Okuda said in a speech at an industry conference here.

    Component companies in both countries are winning prestigious industry awards while Japanese companies are "standing still," Okuda said, according to Dow Jones Newswires. Indian companies such as motorcycle maker TVS Motor and Rane TRW Steering Systems have won the Deming Prize for quality in recent years, a feat no Japanese company has accomplished lately, he noted.

    Toyota has become alarmed by slips in its quality ratings recently, which the company blames on its rapid global expansion.
  • deweydewey Posts: 5,243
    Why did Toyota, Honda, Nissan, etc create a luxury unit if people who buys them are looking for VALUE ?

    Your value arguments are perfect in describing someone who buys a Lexus RX330 versus a Toyota Highlander or a Audi A3 2.0t versus the upcoming VW GTI. A3 2.0t and RX330 are catered to buyers who seek luxury. While Toyota and VW are catered to practical buyers who seek value.

    Your value arguments are a bit of a stretch when applied to cars with different platforms like the V6 Altima versus a Infiniti G35 or a Toyota Avalon versus a Lexus IS.

    As hard as it may be to believe but there are a great many buyers who buy premium marques because of the way they are engineered and not mainly because of image/luxury.(Although I dont have a survey to prove my last point)

    To quote the famous American philospher named Designman... "nuff said"
  • deweydewey Posts: 5,243
    Although mergers and acquisitions in the car industry usually end up in a scrap heap, a Porsche-Saab combo could be very interesting.

    As long as Porsche is focused on making exciting sports cars they will not be abandoned by sports car buyers. And as far as I know the sports car buyer will never be extinct as long as there are people who are andrenalin-driven.

    Porsche's past problems were mainly due to the 924/944 and 928. These cars alienated a large number of traditional Porsche buyers.

    There is nothing wrong with being a very profitable niche player. In fact there are advantages in being a unique niche player in a consolidated auto industry that produces a lot of look-a-like engineering and styling.

    blckislandguy you stated the following:

    Now fully half the sales are the Cayenne and they are doing well.

    Cayenne sales have lately been diving. IMHO the rebadged engineering of the V6 VW Cayenne is a joke!
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    ctsang,
    All I get from this is that you are from HK, brag that you are rich and hang around with billionaires, and prefer your Lexus to the other high-end marques that you also own. You do admit that you OWN the European marques, so it would be logical to consider that there must be something about the Euro marques that appealed to you enough to purchase them, and keep them, since you claim they are in the shop so often. Tell us what you like about the Euro marques you own.
  • Kirstie_HKirstie_H Posts: 10,890
    A reporter is looking for a former Volkswagen fan who has given up on them in favor of other brands in the last couple years. Please respond to jfallon@edmunds.com no later than Thursday, December 22, 2005. Be sure to include your daytime contact information and a few words about your experience.

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    Share your vehicle reviews

  • oacoac Posts: 1,594
    whatever.... Tired of repeating myself ...
  • ctsangctsang Posts: 237
    Wow, autos made in Thailand and India are better than those from Germany. I can't wait to buy those vehicles. I bet they will be cheaper than MB and BMW. I wonder what those Germancarfans think.
  • ctsangctsang Posts: 237
    "As hard as it may be to believe but there are a great many buyers who buy premium marques because of the way they are engineered and not mainly because of image/luxury.(Although I dont have a survey to prove my last point) "

    My friend, most people who buy those premium marques because they want to show off, not becuase of engineering. Most those owners don't know a lot about engineering. They are usually in business.
  • ctsangctsang Posts: 237
    As I said, I bought those Euro marques to show off.
  • deweydewey Posts: 5,243
    I wonder what those Germancarfans think.

    I know I have not slept a wink these past two years thinking about it.
  • deweydewey Posts: 5,243
    Most those owners don't know a lot about engineering. They are usually in business

    That may certainly be the case for the people you know!
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