High End Luxury Cars

sv7887 · September 2005

Hi All,
I just tried out the BEST leather treatment ever. It's called Leatherique and is a two step process. Since my 92 is at the dealer I decided to try it on my new 05 LS. You wouldn't believe how soft the leather is now! On the downside, it is rather expensive ($55 for Two bottles Conditioner and Cleaner) and requires a warm day to have a full effect. I put a space heater inside of it and was very pleased with the results. It's even better than when I bought it in December. It is apparently used in Museums to keep the leather soft and supple.

I've been trying to find a way to preserve the leather on my new car, especially after how badly my leather seats in my 92 have aged. (Much of that is my fault, since I didn't know how to maintain a leather interior) I'm having the 92's seats redyed, but I'll try this treatment on it when I get it back.

ljflx,
So your wife likes the IS? Perhaps an opportunity to steal your LS back? I tried to bait my wife into taking my new Corolla. Strange enough, it actually worked! I think she just takes whatever is new. I think she's doing it to show me she can get away with it! Hopefully she won't take the 92 once I get it back.

One word about the Corolla, not the most comfortable car in the world, but 33 MPG..It cost only $28 to fill it, and I got 330 miles out of it. I was impressed with the fit and finish of the cabin. The tolerances look good enough for a Lexus let alone an economy car.

SV

designman · September 2005

SV, man youre really taking that old LS seriously. Re-dying the leather? Actually, I like seeing people getting the most out of their cars. Its the most frugal way to do it and I tend to be the same way. However, the older I get the more I dont mind spending on cars, probably because I couldn't do it when I was younger.

designman · September 2005

Well the IS would be a nice car for a youngster and it sounds like your son has a lock on it, unlike Oac who if I recall correctly has a couple of much younger kids who need to ride in the back seat. The IS car is no family car. That back seat is the smallest in a class that is back-seat compromised to begin with. The only way he is going to get it is if he could swing it as his personal second or third car. Nah, I see either a GS or LS in his future in addition to the realistic workhorse utility vehicle. Me thinks the toy car will have to wait til the kids have left the nest or have their own cars. OK Oac youre on. ;-)

Now, I couldnt help but notice that nerdy Porsche enthusiast comment. I suppose every marque has its share of them but the real Porsche enthusiast tracks his car or drives it hard. The Porsche mantra is perfection on both road and track. As far as putting the enthusiast in the rear view mirror, I remind you of the Cayenne Turbo, a totally unnecessary brutish setup for an SUV, but one which demonstrates where the companys heads are at.

BTW, it has been reported that Porsche announced today it plans to buy a 20% share of VW. I guess theyre serious about that relationship. I wonder if one will bring the other up, down or remain the same. Hopefully this will be good for both of them. I suppose there is a lot of national pride at work here which counters the MB/Chrysler gambit, and a move that will endear them to all Germans and their unions. Would be nice if American companies could do the same thing and slow the momentum of the Toyota steamroller. I dont like lack of balance as exists with Microsoft.

http://www.cbsnews.com/stories/2005/09/25/ap/business/mainD8CR6P9G0.shtml?CMP=OTC-RSSFeed&- source=RSS&attr=Business-APDigital_D8CR6P9G0

blckislandguy · September 2005

Kirstie, shouldn't this reporter for "an influential US Publication" just review ,say, the last 1000 messages on this board? He/she would save a lot of time AND cast a wider net than talking with a small set of people who self -select themselves to be interviewed.

ljflx · September 2005

"Now, I couldnt help but notice that nerdy Porsche enthusiast comment."

I was really referring to people that want them to build nothing but pure sportscars.

BTW - buying a piece of VW is a mistake - IMO.

lexusguy · September 2005

"BTW - buying a piece of VW is a mistake - IMO."

Totally agree. The only VW group property currently not losing money is Audi. I'm not sure how the Passat is going to do, but the public response to the new Jetta with its wimpy 5-cyl seems to be a big "yawn" followed by "you copied the Corolla?"

Porsche needs to stay lean and mean, not get bogged down in VW's affairs.

anthonyp · September 2005

Maybe they have the extra money and want to invest in something they know about....Further they may feel that this would be a shot at the big times and further influence designs .....I noticed Toyota creeping nearer the high in their stock...They are making a big bet on the hy bred future, but I don`t think it will be a quick large success, particularly if interest rates went back to the numbers that use to be, like eight to ten percent...The auto companies must really have a large profit margin to be able to underight the numerous lease deals....Tony

ljflx · September 2005

Maybe the Phaeton dies and is replaced by the Porsche. Who knows - Phaeton production factory access could be a part of the stock investment. That would be a smart move, but if it's a pure investment it makes no sense.

blckislandguy · September 2005

jiglx, read your post and thought it made a lot of sense. Have you read Bill Beane's (sp?) about managing a low budget baseball team? But, since bootstrapping seems like a good strategy for a small company, please clarify what you mean by .."initial profits are not as large as they could have been but long term equity is notably enhanced and you are in the game at a deeper level.."

On an related note, it seems to me that a lower risk/return ratio is highly desireable independent of company size, i.e., no one should swing for the fences.

Why are you down on Porsche buying 20% of VW? The synergies seem to be present.

ljflx · September 2005

"initial profits are not as large as they could have been but long term equity is notably enhanced and you are in the game at a deeper level.."

Reason is that you make more "temporary" partnership/revenue share deals - say for a 3-5 year period. So you technically are lowering your development costs in exchange for a revenue share once the product hits the market. If you pull it off the outside suppliers/developers make more than they would have made if you had paid them up front - which you may not even have been able to do anyway. As well you don't hire a bunch of your own temporary employees to do development work - so you keep your normal costs in the company low and you don't have the problem later of laying off people (which isn't easy in Europe) when the project is done. But payment is tied to the product being a success rather than taking a huge potentially company breaking risk on your own . With a name like Porsche and with a strong Balance Sheet it won't be hard to find people who will sign up for a "pay tied to success" formula. They'd probably line up. Overall you have higher costs at the launch of the product than you'd have if you built it on your own (in exchange for the lower development cost risk) . But over time those revenue share deals drop off and then go away completely so that by years 4, 5 and particularly 6 you are making the bigger margins. Equity is enhanced immediately and then over time you get revenue growth and cost decrease (as the revenue shares go away). Becomes a great growth story after year 3 - driving your longer term equity higher and higher. Many small businesses are successful with formulas like this. I've used it several times in my own business over the past 3 years.

Down on VW deal because a company like Porsche doesn't need the baggage or beauracracy (large European businesses are far more beaurocratic and slower in process than large US businesses) and synergies take place for the bigger guy, not the smaller guy. VW name is not a healthy one right now while Porsche name is top shelf. Maybe there are details that make it right for Porsche but on the surface it's like taking a step backward. It also smells like a German "loyalty" type of theme. Finally If I was a Porsche shareholder I wouldn't be happy as it virtally elimimates a high share price driven by a future takeover. Remember that in the stock market a certain portion of the multiple on your earnings is tied to potentially being acquired. Certain large companies don't have that - GE,Microsoft, Toyota and many others because they are far too large and are technically viewed as acquirers and coudn't ever get acquired.

anthonyp · September 2005

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

lexusguy · September 2005

"This is about protecting a cozy way of doing business that has been part of German corporate culture for years and years  and its 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."

pat · September 2005

Could you post a link to that? Thanks.

lexusguy · September 2005

Sure.

http://www.autoextremist.com/page6.shtml#table

4th article down.

scott1256 · September 2005

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.

ljflx · September 2005

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

ljflx · September 2005

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.

scott1256 · September 2005

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.

ljflx · September 2005

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.

dfc3 · September 2005

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.

ljflx · September 2005

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.

lexusguy · September 2005

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.

bdr127 · September 2005

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.

anthonyp · September 2005

Sort of like Rolex? Tony

greenbelt · September 2005

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.

blckislandguy · September 2005

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?

ljflx · September 2005

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.

lexusguy · September 2005

"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.

ljflx · September 2005

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.

scott1256 · September 2005

Mercedes (and BMW) have made it more difficult for drivers to perform basic tasks.

Increasing complexity without improving function is a regressive design philosophy.

blckislandguy · September 2005

The Land Rover Discovery II, the English agricultural vehicle so well loved by the citizens of Greenwich and Darien , is a good example. The Ford sourced ZF (I think) transmisson does not have a diptstick to check the fluid and a fluid change requires using a Porta-Power to pry apart the frame rails. Bring one to your local tranny shop for a change and they will chase you out. This is progress?? You don't have to be a luddite to think that a Disco with a 5 speed stick shift (how much would a garage charge to change the clutch? $300 in labor?) would be a more practical, less expensive solution.

What about multi-zone HVAC systems that cost an arm and a leg to fix. Is there any real benefit when most of the time there is only one person in the car? Moreover, when one wants to change the temp most people simply manually crank the temp up or down anyway. Do we really need/want four zone HVAC? Speaking of simple solutions, how about a Disco with a leather interior, no sunroofs to leak and a diesel? Same thing with the E Series Diesel. I'll bet there would be a market here in the US for a no NAV, stick shift version that could be a car guy's Last New Car. Speaking of interiors, most manufacurters charge $1100 for a sun roof. Every one gets one. Yet, in the Northeast, I just don' t see them being used. At all. Even the rear edge is rarely raised as a vent.

merc1 · September 2005

If everything goes right I think you'll see a lot of diesels this time next year. A stick shift in an U.S. model E-Class isn't going to happen, though I agree there would probably be a market for it especially for people who like diesels. Not getting the Nav is no problem on the E though.

M

lexusguy · September 2005

A sun-roof is rarely a stand alone option, at least in the luxury class, anyway. Its usually bundled with this or that package. Also, with a glass roof you can still enjoy the extra light without it actually being open, which may be a reason why some people get them. My wife and I generally dont open ours (I've got a convertible, which is a REAL sun-roof) but we do usually leave the shades open.

anthonyp · September 2005

The sun roof on every car I have had it on is too small, and doesn`t come forward enough....I sugested this to Lexus a number of years ago....The new bmw stationwagon my wife has, the roof is quite a bit longer, sort of two sections and it is amazing the additional amount of light it lets in....Makes a big difference, and almost overcomes the opening not starting out more forward....I believe the new Mercedes is going that new longer route on the S..Hope it spreads to other cars Tony

bdr127 · September 2005

Yeah, that BMW wagon roof is nice.... Same idea as the ones in the X3 and X5. Definitely a HUGE upgrade over the typically-sized sunroofs.

tiny1 · October 2005

Ok, you guys are worrying me with the recent Merc Benz posts...which brings up the following question. I just bought a 2002 CLK55 AMG Coupe with 39K miles. It has three months of factory warranty left then CPO warranty for a year expiring in Jan 2007. I couldn't pass this deal up at $32k. My issue is that I would like to drive this car for many years, and feel a little vulnerable with warranty for only another 15 months. M-B dealer offered to extend CPO for 2 yrs at almost $5k (which I thought was too high), and I've since found out that 3rd party warranty companies will not touch the AMG package. One company has emerged, "5Starwarranty" offering an exclusionary contract backed by Mercury Insurance for $2.5k (5yr/100k miles). Does anyone have any experience with this company or others they could recommend? Or would you just take the risk in the out years? The car is in outstanding condition now and was well maintained by previous owner. I would appreciate your thoughts...

ljflx · October 2005

Why don't you run a D&B report on them and Mercury Insurance to see if they are financially healthy. You can also look up the businesses with some research tools like hoovers on-line and see if they any data on them.

michael_mattox · October 2005

SELL....THE CAR....WHILE YOU STILL CAN...

tiny1 · October 2005

Not sure I really want to know the answer to this, but...why do you say "sell the car while you still can"....Am I sensing some personal experience with this model?

michael_mattox · October 2005

Insurance Companies not wanting to insure the car is a big piece of the puzzle..

The dealer offering a 2 Yr warrenty with god only knows what restrictions..for $5,000 dollars is another big piece of the Puzzle..

Your own research into how reliable that model is (is not) Does not match up with your desire to keep the car long term.

The Price you paid for a relatively new model...(a good price) Cries out why such a good price.

Life is far too short to subject yourself to the frustration you know is coming...

If you are a Conservative sell the car to a LIBERAL...If you are a LIBERAL sell it to a Conservative...It will help ease the pain of selling a car you REALLY like...

ljflx · October 2005

VW must need cash badly. Porsche took the bait; Mercedes passed on it.

http://www.dw-world.de/dw/briefs/0,1574,1728454,00.html

syswei · October 2005

Why so quiet lately? I sense that you have given up on "the great debate".

docnukem · October 2005

I don't think Merc1 will recognize the term, "the great debate". You may have to restate it as, "The great crusade to enlighten the unwashed masses."

Merc1, we all respect your views and particularly your passion for MB. Please don't give up.

merc1 · October 2005

You may have to restate it as, "The great crusade to enlighten the unwashed masses."

Hey I like that!

Well there isn't anything for me to "give up" on, its more like there really isn't anything of interest to discuss here at the moment. I'm reading the same boring stuff over and over, usually about a German brand so I decided that I'd wait for a new subject or direction before posting again. I would like to talk about something different or at least something we all (or at least most of us) can at least see somewhat eye to eye on.

Not to promote another mesg board (or put down Edmunds) but there are some sites out there that have a large international community of posters that make the discussions a little more lively and less one-sided.

M

lexusguy · October 2005

While still not on the same level as BMW and Lexus (basically tied for September) M-B did report best ever September sales, so something is working.

ljflx · October 2005

Here was MB's US sales - basically flat to prior year. Somewhere else I read that Lexus was up 9% and BMW was up 3% including the Mini. I believe BMW sales were about equal to Lexus if you include the Mini and about 3k less without it.

http://www.automotive.com/features/90/auto-news/15587/index.html

syswei · October 2005

Lexus: http://pressroom.toyota.com/photo_library/display_release.html?id=20051003

BMW: http://www.theautochannel.com/news/2005/10/03/144737.html

The industry as a whole had a real tough time selling SUVs in Sep, due to the gas price spike. Lexus held up ok I think. But I think recent rx400h sales are a bit underwhelming. Possibly still supply-constrained, I haven't followed it that closely.

If I were MB I'd be disappointed that the new ML was up only 21% yty in Sep. Plus the R doesn't seem to be jumping out of the gate.

ljflx · October 2005

It was the other way around then, BMW and Lexus were just about even and the Mini gave BMW a 3K edge.

merc1 · October 2005

Yeah I saw that, but like others have said its bascially a wash with last year.

The ML, CLS and SLK (new models) have been pulling all the weight so far this year. Its too early to tell whether or not the R is going to do anything since for Sept it was only on sale for the last two weeks of the month. The E seems to have regained its former sales lead on a month to month basis, but for the year its going to be a fight to the end with the 5-Series for year end honors it seems. I guess the initial shock of all the new competition (both external and internal in the CLS) has worn off.

As always the luxury brands will rally in the last few months, especially Dec when they all run their biggest promotions of the year.

Though the C-Class did manage a small increase last month, its the S-Class that will really start to turn things around starting in Feb. Then sometime next summer the E will get its mid-life facelift.

M

princeabubu · October 2005

So, I had a dream that the Lexus LS was revealed, and it looked like a Ford 500 in the front, and had a Maybach rear. The interior was just like a Maybach as well. Swathed in way too much bird's eye maple. It was hideous. Now, enough of my silly dream though. When is this car being presented? Lexus needs to leak spy shots like Mercedes does with their cars, and get the comotion started. Let's hope that my dream will remain just a dream though. Here's to hoping that this new LS looks great.

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