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High End Luxury Cars

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  • houdini1houdini1 Kansas City areaPosts: 5,874
    I couldn't agree more. It's the same thing with the pricing. The LS pricing is right on but people buying the "prestige" of some of the European makes are simply paying too much. Talk about paying for the "sizzle".

    2013 LX 570 2010 LS 460 2002 Tacoma 4x4

  • tagmantagman Malibu, CaliforniaPosts: 8,441
    The LS pricing is right on but people buying the "prestige" of some of the European makes are simply paying too much. Talk about paying for the "sizzle".

    Paying for Sizzle? Don't forget, houdini1, that Mercedes Filet Mignon is supposed to cost more than Lexus Tri-Tip.

    BTW, now that the pricing is out, go ahead and price out a loaded LS460L against an S-Class and see just how much difference there is.

    TagMan
  • designmandesignman Posts: 2,129
    Furthermore, how is being the most selling car in it's class being exclusive? Just because it's not in other countries, doesn't mean it's more valuable than the Taj Mahal! Oh, and newsflash, the car is sold in other countries, Japan for one, but it flunks miserably there. I guess it's not exclusive enough.....

    Ooh that was good. I could not have said it better myself!
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    blkhemi - I think houdini1 already knows that his "exclusive" remark was not one of his best posts. He said it as bait. I answered him in post 20021 and in his next post 20022 he sort of threw in the towel on the remark.

    If you need to do so, check out those posts.

    So, in my opinion, we can let him off the hook regarding his "exclusive" remark . . . he knows it wasn't one of his better posts and I expect he'll be making quality posts here again soon.

    TagMan
  • brightness04brightness04 Posts: 3,151
    Having a higher price tag does not necessarily mean costing more or worth more. If a car has an MSRP of $100k, is usually leased with a 3-yr residual of $60k, but can never fetch more than $40k at auction after the lessee returns the car after 3-yrs . . . how much is the car really worth to begin with? It shouldn't take a rocket scientist to figure that out. I mean, how much is a $50 Filet Mignon really worth if it comes with a $20 gift certificate or a second meal of equal or less value with every serving?
  • houdini1houdini1 Kansas City areaPosts: 5,874
    Let me off the hook? What is that? I thought I was letting you guys off the hook. And when I say exclusive, I mean exclusive. One of my more clever remarks. Looks like we are going to game 7.

    2013 LX 570 2010 LS 460 2002 Tacoma 4x4

  • deweydewey Posts: 5,243
    I know how much Lexus hybrid efforts have been ridiculed in this forum especially in the form of the GS450H but believe it or not a dedicated Mercedes man who happens to be the head of research at DaimlerChryselr is completely impressed and overwhelmed by the Lexus GS450H.

    STUTTGART Every couple of months, Thomas Weber, head of research for DaimlerChrysler, gets behind the wheel of one of his own cars, or that of one of his competitors, and drives through the mountainous terrain of Europe or on long stretches in the United States.

    While taking a spin this year, the lifelong Mercedes man found himself impressed with a novelty on the European market: Toyota Motor's new Lexus GS 450H, the world's first luxury car that incorporates an electric hybrid motor but still performs for a demanding driver like Weber.


    Based on the Herald Tribune article I linked below it certainly does seem that Mercedes, Audi and BMW are very serious about hybrids. Diesels are not going to be their sole pursuit in terms of fuel efficiency.

    So I guess we are going to see a lot of future drivetrain experimentation for the three German marques. There will likely be many models offering both diesel and hybrid drivetrains simultaneously. A Audi Q7 diesel sold simultaneously with a Q7 hybrid, a diesel MB S sold side by side with a hybrid MB S or hybrid diesel MB S and so on and so on.....

    SOURCE: HERALD TRIBUNE
  • guestguest Posts: 774
    Well, Mercedes have never been comparison winners, save for the SL. I don't think Mercedes cares a great deal.

    The same is probably true for Lexus. You don't want to be a bottom-feeder, in either case. But what would you rather be good at? I'm sure they don't build cars to please journalists.

    The M35/45 has put a nice string together, and can't outsell the beleaugered GS!


    This previous post of mine seems to have you chaffed, still.

    I apologized for not including GL and AMG vehicles.

    All comparisons count, but I due place more credit on beating 6-7 cars in a comparison than 1 or 2 cars.

    Apparently you didn't get my point, which was that winning a comparison and being #1 in sales have different values to different people.

    The M has won at least two major comparisons, and it has it's work cut out keeping up with such unpopular cars (around here) as the Lexus GS.

    Lexus has stated they want to sell 30k GS a year. As far as I can tell, every month they are getting 2500 a month out of it, so even if it isn't King of The Mountain, it is successful to it's maker, and to 30k buyers.

    No one "copped out". Just stating the facts. I was the first one to say I envisioned a design more in the 5-series idiom, than what we received.

    The SC doesn't have to win comparisons to be a success. Neither does the C-Class. Or the Lexus ES.

    I remember when the 1996 Isuzu Trooper won an 8-truck SUV comparison in C&D.

    Would you call the Trooper a success? No. Why? Because no one bought one.

    If the boring LS can, consistently, win comparisons with other sexier, sportier, more powerful rides, it says something about Lexus and their ability to execute.

    Usually when something is labeled "critically-acclaimed", that means nobody is buying/watching it. :sick:

    DrFill
  • deweydewey Posts: 5,243
    Your Filet Mignon and gift certicate argument makes a lot of sense.

    But any auto maker that uses your inflated residual argument will end up perishing due to losses or at least suffering the slow and gradual death that is afflicting the Big 3.

    BMW and Audi profits are healthy and growing while MB profits are going through a healthy recovery(apparently the same cannot be said about Chrysler). Fortunately such economics as you are describing above is not applicable to the three German luxury marques.
  • lexusguylexusguy Posts: 6,419
    And the G35 is outselling it too!

    The 2006 G35 is also a lame duck. G35 sales should get a nice boost next year.
  • brightness04brightness04 Posts: 3,151
    Discounting does not automaticly mean financial death sentence righ away, if the price was marked up to begin with. A classic example is jewlry: has any of us ever purchased diamond at full appraised value, instead of say, 30%, 50% or even 70% below "appraised value"? Obviously, jewlers are not going out of buisiness in droves. They have been doing it for decades. Marking up then offer "incentives" is the classic game played by purveyors of luxury goods. It makes no difference to the eventual bottom line at all whether an S class is priced at $80k for a straight sale or lease it at $100k with a $60k residual then later auction the car off at $40k . . . ignoring interests for the moment, the car company gets $80k from the car through either sales method.

    There are however three consequences of this game:

    (1) a higher sales revenue is booked at inception of the lease, to be followed by a $20k write-down disgorgement three years later. So long as the sales volume is expanding, the front-ending of the book (ie. more new cooked up sales than lease return coming back to roost) looks good for the current quarter. The day the sales volume drops (i.e. not enough new cooked up sales to offset write-downs from previous fake sales), the company is in trouble. That's how the domestics ran into trouble a decade ago: they had to increase volume at all cost. In other words, this particular marketting method can be either a profit booster or loss booster . . . it's a leveraged play on sales growth.

    (2) It allows the leasers to brag about having a car with higher MSRP: $100k vs. $80k, even if the real worth of the car (ie. the life time revenue of the car for the manufacturer) is the same $80k.

    (3) In states that collect excise tax based on MSRP, it results in a higer tax bill.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I mean, how much is a $50 Filet Mignon really worth if it comes with a $20 gift certificate

    Even MORE . . . $70 :P

    (I get your point, though)

    TagMan
  • brightness04brightness04 Posts: 3,151
    And somehow, you would go to the steakhouse insisting on charging $50 for the chunk of meat and give you $20 back, instead of another one that simply charges $30 for the same chunk of meat to begin with? Guess what, you are simply out on the tax on the extra $20 plus the whatever tip per centage you normally pay.

    edit: See your edit. Thanks for the witty reparte :-)
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Thanks for the witty reparte

    You're welcome. ;)

    Ever since I said that the "LS is all sizzle and no steak, and the S-Class is all steak and no sizzle" . . . all we're talking about any more is freakin' steaks, steakhouses, chunks of meat, taxes, tips, and gift certificates! What the heck's going on here? Are we opening up a darned restaurant or something? Heck, you want it medium-rare or well-done? ;)

    To the point . . . I have yet to see your real numbers showing a loaded LS460L compared to an S-Class.

    You guys were trying to make it sound as though the prices were miles apart. And I just don't think they are. That's what this is really about.

    TagMan
  • brightness04brightness04 Posts: 3,151
    I actually have been suspecting for some time that the life-time revenue for the manufacturer on an S class, aside from the S600, is not much more than that of the LS (LS430!). Whatever difference the inflated MSRP on an S may suggest just simply gets disgorged when the car gets auctioned off way below the residual after lease return. The new LS460L simply matches up with S600 in thar regard. If you are saying now that MSRP's are even comparable, then Lexus may actually generate more life-time revenue on each LS than MB does on the S . . . a state of affair IMHO quite inevitable following the trends of the past decade.
  • merc1merc1 Posts: 6,081
    All comparisons count, but I due place more credit on beating 6-7 cars in a comparison than 1 or 2 cars.

    That is bunk doc. What difference does it make how many cars is in a comparo. That is absurd and a naked attempt to say that the LS430's wins are more important than the SC430's losses or the more expensive MB's wins.

    Apparently you didn't get my point, which was that winning a comparison and being #1 in sales have different values to different people.

    Yeah apparently, but the problem here is which you choose to talk about at any given time depending on the Lexi in question. That is my point, your too whishy washy with the whole comparo/sales rhetoric. Example:

    Lexus has stated they want to sell 30k GS a year. As far as I can tell, every month they are getting 2500 a month out of it, so even if it isn't King of The Mountain, it is successful to it's maker, and to 30k buyers.

    Translation: the GS doesn't win comparos or outsell the German competition so I'll pick on a new upstart and throw in the "long as it is selling" line for good measure.

    The SC doesn't have to win comparisons to be a success. Neither does the C-Class. Or the Lexus ES.

    Cop out. Plain an simple because if the SC was a comparo test winner you'd be shouting about it as you do the LS. That is far too hypocritical doc. The car doesn't outsell the German competition nor does it beat it in comparos, but it is still a success when it flunks two of your biggest test? Yeah ok. What a gloss over. Oh now the C-Class can be success, but I seem to remember correcting you C-Class sales a while back, and now it is be a success when it doesn't win comparos, but before it was a bottom feeder?

    If the boring LS can, consistently, win comparisons with other sexier, sportier, more powerful rides, it says something about Lexus and their ability to execute.

    Now comparos are important again just that quick right?

    I remember when the 1996 Isuzu Trooper won an 8-truck SUV comparison in C&D.

    Would you call the Trooper a success? No. Why? Because no one bought one.


    Pretty desperate to have to go back 10 years for that one to make a point in defense of Lexus.

    Which way is up?

    M
  • brightness04brightness04 Posts: 3,151
    The number of cars in a comparo does matter when judging the value of a comparo, for three reasons:

    (1) many of the criteria used in a comparo are subjective rankings, not hard numbers (even hard numbers are problematic, how many tenths of an inch in shoulder room offsets how many tenths of a second to 60mph??, you get the point :-). So in a field of very few cars, it utterly comes down to the weight assigned to each category. Whereas in a field of many cars, because points are dependent on relative rankings, the sheer number of entries makes the rankings more meaningful.

    (2) Comparos with more cars also tend to involve more people, hence less likely to be beholden to the agenda of a couple individuals.

    (3) Comparos with more cars also tend to divest the testers' prejudice as they broaden their horizon.

    GS is not the only Lexus entry for a midsize luxury sedan/wagon. Just a hint: Lexus sells 110k midsize luxury sedans a year. If we want to bring the Lexus compeition to A6, 5 and E wagons into the discussion as well, Lexus sells well over 200k units of midsize luxury sedans and wagons in the US every year. Many midsize luxury sedan buyers find ES350 to be adequate, just like many 5 series buyers find 525 and 530 adequate. Enthusiasts and comparo writers may find 525xi (or was that 530xi?) an utter disaster, just like FWD ES is pathetic in handling . . . for most buyers who want to have a cushy ride while stuck in traffic, and occasionally get themselves around in snow, both cars are adequate. That is market reality.
  • drfilldrfill Posts: 2,484
    On your own admission, sales AND comparisons are maybe the two best ways to judge the value/effectiveness of a car in the marketplace.

    Therefore, either side of the coin can be used, no?

    If a car is successful when judged against it's peers, that's good. But if it can't be sold, that bad.

    Are you calling the SC a failure? :confuse:

    Regarding the GS, let me state again, for the umpeenth time, it's not what I would've designed, but it is meeting the target numbers for Lexus, so it maybe successful TO LEXUS. I didn't say I'm THRILLED with it. It's not simantics. That's what I said before.

    Is it Lexus GS/ES successful, no. Is it winning comparisons, no. I'm not making excuses for it, or apologizing. It is doing the job for Lexus, but I know Lexus can do better.

    I'm not trying to discredit any Mercedes comparison victory. My point was if I beat on man in a race, it's not as impressive as winning the NYC Marathon. It just isn't.

    In the lower classes, it's harder to get a win, because you are taking on more competitors at once.

    In relation to Mercedes, since you are making an issue of it, I have never seen a Mercedes beat a manual tranny BMW in any comparison. So as long as Mercedes doesn't have to offer true sport in the car, they can win.

    The M5/6 doesn't seem to offer a manual anymore, so the E55/65/CLK55 is more attractive to performance drivers.

    Many would just get a pre-owned M5. :shades:

    In that price range, manuals are harder to come by, which plays to Mercedes advantage, since manuals are not implemented by Mercedes.

    With a slushbox, the car's spirit is severely restrained, and it can never really be a driver's car.

    AMGs to me are bullet trains, but I wouldn't want to put a bullet train in my garage.

    DrFill
  • deweydewey Posts: 5,243
    Luxury and discounts are not a contradiction for Lexuses or Benzes or any other major luxury marque. Each marque has their own form of discounting. MB and BMW engage more in generous lease deal while Lexus engages more in purchase discounts. That is the nature of the game.

    For instance the reason BMW can make BIG $$$ in generous lease deals is because their autos have the highest retained values in the industry. Otherwise BMW would engage more in purchase discounts like Lexus.

    actually have been suspecting for some time that the life-time revenue for the manufacturer on an S class, aside from the S600, is not much more than that of the LS (LS430!). Whatever difference the inflated MSRP on an S may suggest just simply gets disgorged when the car gets auctioned off way below the residual after lease return. The new LS460L simply matches up with S600 in thar regard. If you are saying now that MSRP's are even comparable, then Lexus may actually generate more life-time revenue on each LS than MB does on the S . . . a state of affair IMHO quite inevitable following the trends of the past decade.

    The above analysis is based on mere conjecture with no substantiation whatsoever. Both the S and new LS 460L will soon have discounts. MSRPs for both models will soon become irrelevant.

    If you have facts to back up what you are saying then please provide them .
    There appears to be little meat in your argument. As the little old lady asked Wendy's CEO: "Where's the Beef?".
  • brightness04brightness04 Posts: 3,151
    The point is not about cash discounts (which all dealers eventually engage in, and truthfully reflected in the nominal transaction price), but on lease residual and interest/money-factor subsidies. Lexus residuals are realistic, whereas the redisuals on some of the German models are completely unrealistic; that makes the nominal "sale" price (not MSRP) on these same cars in a lease contract highly suspect.

    The fact is quite obvious: far higher percentage of MB and BMW's are leased nowadays . . . clear indication that there is heavy subsidy in the leases that make the nominal purchase price unappealing for a conventional purchase.

    BTW, what's the deal with Europhiles' obsession with meats ;-) Like Tagman said, let's get back to the cars. It was bad enough to be side tracked by upscale steakhouse analogies, let's not bring the burger vendors in here ;-)
  • deweydewey Posts: 5,243
    Lexus residuals are realistic, whereas the redisuals on some of the German models are completely unrealistic; that makes the nominal "sale" price (not MSRP) on these same cars in a lease contract highly suspect.

    What kind of proof is that? MSRP is irrelevant independent of whether it is a lease or purchase cash deal?

    Brightness if you want to continue this discussion please back it up with $$$ and facts versus mere armchair conjectures that cannot be proved or disproved.
  • brightness04brightness04 Posts: 3,151
    Please read my previous post again. The discussion is not on MSRP, but on the nominal "sale" price in a lease contract, and how truthful it is. There is a "sale" price in a lease contract; that's the amount BMW or MB takes out of one pocket and puts in another, and call it current revenue in their books, and then counted towards average vehicle sale price (the write-down that comes 24 to 36 months later is not taken into account for average vehicle sale price)

    Go check out auction prices on lease returns. The prices onlease returned BMW and MB are fetching are way below the residual. Checkout what third-party banks are willing to give you as lease residual . . . they are inline with what Lexus would give you on their cars, but way lower than what BMW and MB are offering. Even many Europhiles are realizing this phenomenom; that's why they insist on leasing only, to take advantage of the offer.
  • deweydewey Posts: 5,243
    Really?

    Where are these disgustingly low auctioned prices on MBs and BMWs and those golden high auctioned prices on Lexuses?
    Appreciate it if you can link me to that site or group of sites. I myself would love to buy such a deal. Such low prices would make it worth importing a used BMW from USA to Canada even with the customs issues involved.
  • brightness04brightness04 Posts: 3,151
    There is no golden high auction prices for Lexuses. They are just inline with what Lexus predicts in their lease offers (and the offers from third-party banks). The problem with MB and BMW is that their residuals are way above auction value. You can find out the numbers first-hand by going to dealer auctions.

    If you do not have that opportunity, a proximation can be found by simply looking at the trade-in values on the cars on edmund's website, take for example:

    a 2003 745i's trade-in value is 36k, vs. new 750i MSRP of $72k, or 50% of MSRP in 3yrs. There was very little price change between 745i and 750i.

    a 2003 LS430's trade-in value is 33k, vs. new LS430 MSRP of $52k, or 63% of MSRP in 3rs.

    The current lease residual on 750i offered by BMW is 60% of MSRP, clearly not born out by the numbers from Edmunds; whereas what Lexus is offering on LS lease is 57%. Remember, the per centage of MSRP in a lease applies to the entire vehicle purchase including all options' MSRP . . . whereas in reality as we know the options don't add up to much in used sale value.
  • deweydewey Posts: 5,243
    Interesting how you used a 2003 7 series as a comparison to the 03 LS ;)

    We all know the notirety involved with a 03 7 series model with its new revolutionary idrive system and reliability issues.

    The two biggest US organizations that are in the business of determing retained and future resale values voted BMW overall as number one. Ofcourse if you compare one single model from one single year that happens to be the notorious 03 7 series then you will definitely succeed in proving otherwise.

    Also I dont know if you are aware of this but higher priced vehicles usually involve higher rates of depreciation . As you know the prices of a 03 LS resembles more closely the prices of a 03 BMW 545 series than a 7 series.

    If you honestly believe that this one example you provided proves that BMW/MBs sell for dirt cheap auction prices(which you apparently have no proof of) while Lexuses dont sell at dirt cheap auctioned prices (again no proof) then I will allow you to have that belief.
  • brightness04brightness04 Posts: 3,151
    The meat in your bun is turning out to be soy :-)

    03 7 series was used because it's three years ago and 7 series is the car that fits this HELM forum. First model year actually tends to have better value retention because there is usually less discount at the beginning of a model run. If you insist, we can look at the 04 7 series. Edmund's trade in is $43k . . . that's 60% after 2 yrs, compared to 50% after 3yrs for 03 745 . . . hmm, I'd stick with the 03 if I were trying to make your argument.

    03 540i has a trade-in value of $29k (rounded up), compared to new 550 MSRP of $57k (rounded down), or 51% of MSRP after 3yrs (even after the roundings adding nearly $1k, or 2-3%, to value retention). It's not even close to the 63% of 03 LS430.

    Like I said, your "meats" are fake, mere counter-factual prejudices.

    745i is one example. Now you have added 540i yourself voluntarily. You can run the numbers yourself on all the main line models from MB and BMW, and more or less getting the same result. Only 3 series before E90 had high value rentention . . . that and some the relatively exotic models like the M and AMG cars. In any case, once you run though the numbers, you'd realize just how inflated the residuals are on MB and BMW cars . . . and that many of your fellow Europhiles are no fools for leasing.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    If you honestly believe that this one example you provided proves that BMW/MBs sell for dirt cheap auctions prices(which you apparently have no proof of) while Lexuses dont sell at dirt low auctioned prices (again no proof) then I will allow you to have that belief.

    You are doing good here with this argument, dewey. Stay with it.

    Brightness04 keeps inferring that Lexus is worth its retail price, and that Mercedes and BMW MSRPs are inflated. Heck, a fully-equipped LS460L is not a price bargain by any means, especially considering the car. Lexus has abandoned low price structures, with exception for the basic LS460.

    And then there's all this lease residual vs. auction price baloney.

    TagMan
  • brightness04brightness04 Posts: 3,151
    Not just MSRP, but nominal "sale" price in leases . . . as the majority of BMW and MB are leased nowadays.

    Lease residual vs. auction price is certainly no baloney. The difference is the money that nobody ever paid to the manufacturer in the lease transaction. It's even more dishonest than mail-in rebates or giving a free luxury car for buying a condo, to keep the nominal sales up; at least in these latter cases, actual transfer of money from the buyer (or its banking agent) to the seller do take place.

    I do agree that LS460L may not be much of a price bargain. Incidentally, if you follow my logic, you'd notice that, even LS430 is not much of a bargain if one is willing to go the lease route on the MB and BMW's. i.e. MB and BMW actually cost a lot less than their MSRP (or avearage "sale" price for that matter) when subsidized leases are taken into account.
  • hpowdershpowders Posts: 4,269
    BMW's are always given the CR coveted red circle for depreciation, meaning "excellent."
    Every single BMW rated in the April 2006 CR was given the red circle except for new models which weren't rated.
    Very few cars hold their value as well as BMW's and this has been true all the way back to the lamented Bavaria and 2002 models of the 1970's.
    Admittedly, the residuals are a little inflated on the BMWFS leases, but not by much!
  • deweydewey Posts: 5,243
    Ingenious Brightness, ingenious!

    The data you point out from Edmunds is valid for the number of cars involved . The sampled examples in Edmunds is substantially smaller than the samples used by the two biggest organizations that are in the business of future resale values/retained values and CR itself. In otherwords Edmunds datais more prone to sampling errors. If I am going to rely on stats I am going to rely on the ones with a bigger samples.

    And which brings me back to my original point:

    Your view that BMW/MB values are selling at dirt low prices at auctions is bunk. You yourself cant prove it. Can you?.

    Your view that MB/BMW subsidized lease averages and manipulation and blah blah blah is bunk. And now excuse me I am going to have some serious steak Tartar with raw egg yolk( raw fish is far too over-rated in my opionion)
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