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High End Luxury Cars

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  • anthonypanthonyp Posts: 1,857
    You have a good grasp , and a sharp mind...Thanks.....There is a good article in the n y times today.....The two families who own fifty percent of the company and all of the voting rights, apparently also serve on v w `s board....There may be too many cooks in the kitchen with v w, so they may take it over and streamline thing down..... That probably would be more challengng than just making a tremendous amount of money by selling out Porsche......The Europeans in my experience are very long term oriented if they have a controlling interest and a long lineage Tony
  • lexusguylexusguy Posts: 6,419
    "This is about protecting a cozy way of doing business that has been part of German corporate culture for years and years – and it’s about historical family entanglements that have dominated these two companies since they were formed. Ferdinand Porsche designed the original Beetle in the late '30s and went on to found the famous sports car company bearing his name. His grandson, Ferdinand Piech, who early on was a gifted engineer for Porsche but who later was the architect of VW's disastrous foray into the upper echelons of the market, is now chairman of VW's powerful supervisory board. Needless to say, he has a vested interest in both companies."

    "A porsche spokesman was quoted as saying, "We are a German company and we have a certain responsibility for Germany and German industry." Analysts insist this is yet another attempt by a German company to prevent the movement to make German corporations more responsive to its shareholders from taking hold, something the analysts have been screaming about for years."
  • patpat Posts: 10,421
    Could you post a link to that? Thanks.
  • You are so very right.

    VW is in deep trouble. It would take huge financial reserves (like Toyota's) to turn VW around.

    Porsche is well established in the high performance world. The new Panamera (with coupe and convertible variants) seemed like a wise move to me.

    I see very few benefits and many potential risks with this move.
  • ljflxljflx Posts: 4,662
    It's still hard to digest the news stories that describe Mercedes as "a troubled brand". I'm sure most of us never expected to see that adjective tied to the Mercedes brand name. Anyway - Dieter is starting to make his moves and cost containment and ultimately cutting out models and choice is inevitable and probably will make itself known before too much longer.

    http://biz.yahoo.com/ap/050928/germany_daimlerchrysler.html?.v=11
  • ljflxljflx Posts: 4,662
    This is why you should never buy shares in smallish family controlled companies. Business rationale is discarded in favor of emotions. They act as if there are no shareholders and as the article states - they try to keep them from having any say and limit/undermine their rights. Decisions like this are guaranteed failures.

    The MB story in that link is real hard on them but it's right on the money based on the former MB owners I know.
  • I feel strongly that cutting back models and option choices is the wrong way to revitalize Mercedes. Dieter and others in management need to go back to building the cars to their previous peerless standard.

    "Engineered like no other car in the world" should still describe a Mercedes, particularly the S, CL, SL and AMG series.

    Now they are building even their top series with a clear objective: a lower retail price. Mercedes will not be the same if they stay with this new process.
  • ljflxljflx Posts: 4,662
    Well I think that is the emotional attachment to Mercedes and it would probably kill them if they held to it. Dieter seems to know what lays ahead and IMO has an excellent grasp. It's been obvious to me for a long time now that MB cannot hold the pricepoints of the past in the US. The poor residuals change everything and mean the MSRP has to come down. It'd be a dumb business plan to think people are going to keep paying top dollar for rapid and excessive depreciation. Maybe in the RR market this is Ok but not in the mass market. This isn't the 80's anymore. There is way too much competition including one from a giant with global plans and with a super efficient cost structure and a quality story that used to define (actually easily supercedes) Mercedes. MB has to fall back in prices. Dieter has to make sure the fallback is as little as possible. Cutting costs is the start. Just like Microsoft went from a growth stock to a value stock, MB will have to go from a status buy to a value buy. When you think of MB pre 1990 they always were a value buy. The price was the highest in the industry but the retention value was incredibly high also. Hence high price still translated to high value. Today high price translates into being a sucker.
  • dfc3dfc3 Posts: 87
    Its interesting that the reduction in work force is focused most heavily on the C-class. This seems to be a message in and of itself. The C doesn't have a high price point right now. The focus seems to be on the more core classes in the U.S. that are at a higher price point and potentially bring them down.

    I do agree that Mercedes was perceived as top prestige and top quality 20 years ago. Now they are possibly high prestige but below average quality. Yet, I don't think that's an engineering issue per se, more of an added doo-dads, electronics issue. I don't know of Mercedes' owners complaining about engine or transmission durability - more along the lines of things like "the $%&# relay shorted out and I've taken it in 3 times". For some reason, they seem content to outsource all that and not force the suppliers to the highest level of quality.

    Anyway.... I'd consider buying a C-class, but wouldn't move up to the E. If they phase it out or scale it back - then the only remaining buyers would have to be focused high-end; and possibly less likely to tolerate issues than the mid-range.
  • ljflxljflx Posts: 4,662
    This is Europe. Cost cuts are probably more symbolic of where costs can be cut without legal consequence than what is cut. If those employees had been E-class personnel than that would have served the purpose.
  • lexusguylexusguy Posts: 6,419
    M-B (ok Germany) needs to stop the relentless march ahead of technology for technology's sake. They all seem to think that they cant launch a new car unless everything mechanical is replaced with electronics. The Germans do mechanical VERY well. Electronics, not so much. E-brakes, E-steer, E-etc. are unnecessary. If an electronic do-dad does not have a clear and obvious benefit to the driver, skip it. Consumers will not remember who was first out of the gate with this or that fancy feature, but they WILL remember when that feature breaks. Making sure everything WORKS should be much more important than being first.
  • bdr127bdr127 Posts: 950
    M-B (ok Germany) needs to stop the relentless march ahead of technology for technology's sake. They all seem to think that they cant launch a new car unless everything mechanical is replaced with electronics. The Germans do mechanical VERY well. Electronics, not so much. E-brakes, E-steer, E-etc. are unnecessary. If an electronic do-dad does not have a clear and obvious benefit to the driver, skip it. Consumers will not remember who was first out of the gate with this or that fancy feature, but they WILL remember when that feature breaks. Making sure everything WORKS should be much more important than being first.

    If companies such as Microsoft, Sony, Cisco, Oracle, and Dell took that approach, they'd either be at the back of the pack or out of business.....

    In this Technology Age, the best companies are always pushing the envelope.
  • anthonypanthonyp Posts: 1,857
    Sort of like Rolex? Tony
  • MB is going to eliminate 9,600 employees (about 9% of their German workforce).

    Should be fun to watch them build the same 'high quality, durable, incredibly engineered' vehicles with a whole lot smaller work force.
  • I enjoy reading your posts. They are thoughtful although a little laden down by the Booz, Allen and Hampton razamataz. What do you do in the real world?
  • ljflxljflx Posts: 4,662
    CFO of a 750mln business (American sub of a European company) in the past but have my own business now with a couple of partners today. I'm done with the corporate world (nothing beats ownership) and I'm no fan of Booz Allen or MacKenzie etc.
  • lexusguylexusguy Posts: 6,419
    "If companies such as Microsoft, Sony, Cisco, Oracle, and Dell took that approach, they'd either be at the back of the pack or out of business..... "

    So... Microsoft taking 5+ years between operating systems instead of their usual 2-3 is them pushing the envelope and throwing caution to the wind? Hardly. With more and more heat from Linux and OSX, Microsoft is taking their time to make sure Vista is as polished out of the gate as absolutely possible. They will not rush it out now and then try to fix all of the broken features in the field.

    Cisco has quite a sterling reputation in the networking world. I seriously doubt they would risk that image by putting out any product that had not been tested to death.

    Dell got to the position they are in with a combination of brokering special deals from best buddy Intel, clever marketing, and by undercutting the competition on price thanks to Japanese style manufacturing efficiency. Not the products themselves. They make a windows box just like everyone else. I really dont see how they apply.
  • ljflxljflx Posts: 4,662
    As well these are technology companies so there is no correlation. Putting in new technology that is difficult to use by the driver and works horrendously and, as well doesn't do anything better than the old technology (if it were to work properly in the first place) is not pushing the envelope. It's ripping the envelope in half.
  • Mercedes (and BMW) have made it more difficult for drivers to perform basic tasks.

    Increasing complexity without improving function is a regressive design philosophy.
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