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High End Luxury Cars

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  • v12powerv12power Posts: 174
    I agree on the fifty issue. I was just trying to illustrate that there are young hot bloods looking at these cars. My good friend just bought an AMG C36, the first factory AMG car here. I am wanting the next one, the C43 very badly. These cars absolutely rip! The newer auto transmissions are awfully quick and pretty smart. They do not hamper the performance anymore, just some of the involvement. I would still prefer the C43 over a similar year M3 just for the V8.

    I definately shop MB and BMW against each other. BMW always wins for involvement, they are the only ones big into the manual trans market still. My recent experiences with poor quality led me to choose MB this last time. Oh, it was faster too!
  • ljflxljflx Posts: 4,679
    Nealm1 - I remember reading in a business magazine article on autos that worldwide amg sales are in the teens - that's it. I think the number was 16,000-18,000. If I remember right the company only has several hundred employees. That's why I was also saying many posts back that very few MB cars have ABC. Yes ABC may be standard on many of those models but they are very few and very far between. If my salesman was accurate less than 10% of S-class buyers opt for it. I would assume he was excluding the S-600 where it is standard but that is also a low sales volume car. Sure it'll be an option on the E but I'd bet it sells in 1-2% of the E volume. How many people want to pay more for an E-class car than you'd pay for an S-430?

    I also hope everyone remembers that AMG was acquired by MB and not built internally. I doubt it is very profitable because very few custom products,in any industry are. Syndicated products are always where the profits are made. If Lexus goes the tuned route it will be as a loss leader to draw in a younger crowd.
  • ljflxljflx Posts: 4,679
    If memory serves me right MB's acquisition of AMG was simply a logical and, at least in my opinion, a very smart thing to do. Imagine building a brand with as great a name as MB has only to be trumped by a small tuning shop with your very own cars. You have to buy the company and bring it in house.
  • merc1merc1 Posts: 6,081
    I think you missunderstood what I meant. What I'm saying is that sales of the RS6 aren't as important, hence the small numbers make good sense....it's the sales of the regular A6 models that are helped by having a car like the RS6 on board. Yes Audi has issues at the dealership level, but it's not as widespread as some would like you to believe. Your point about what Audi needs is almost correct....actually they need both...cars like the RS6, S8 etc and a good dealer body to compete with Mercedes-Benz, Lexus, BMW etc. The "profits" on the A6 range have probably been made already hence the very late arrivial of a car like the RS6. Profits are not everything, thats what I like about the European makes, they'll build the fun cars...profits not being the main priority, the cars are. Again, Audi will "profit" from those regular A6s that are sold, and at the same time the whold brand is strengthened. M, AMG and S cars are NOT about sales, thats what the regular models are for. These are specialty cars and specialty cars are....well the specialty of most European carmakers. Rare cars like the CL55, SL55, M5, Z8 and the like build the image of the brand which in turns opens the wallets. People who buy S500 with the AMG Sport package get a car that looks very similar to a S55, that has it's appeal. Trust me Mercedes-Benz, BMW and Audi don't build anything they can't make money on. Especially Mercedes-Benz.

    I just don't think a person that likes a car like the LS430 will ever see the point of a RS6, M5, E55 etc....again nothing wrong with a Lexus, but the excitement is sorely missing.

    ljflx,

    Your numbers about AMG's production and employees *sounds* about right, from what I last read on AMG myself. However AMG may have just as well been in-house all along, the two guys that started AMG are former MB engineers. Complete MB ownership of AMG isn't complete until 2007. Mercedes is now working with Brabus (in secret). If you think AMG's cars are over the top check out some of Brabus' work.

    M
  • ljflxljflx Posts: 4,679
    I thought they bought it outright in 99. By the way owneship by former engineers doesn't ensure anything though I'm sure they had some key relationships. Remember that Compaq was started by former IBM execs.

    Anyone pick-up volume of 7-series sales in February?
  • bernard1bernard1 Posts: 58
    I don't know if any european car manufacturers build fun cars today where profits are not the main priority. Look at Porsche, every major news release is all about profits.

    I also think that people who like the LS/LX versions from Lexus can and do see the point of performace cars. Many of those owners own an M5, AMG or other perfomance auto. Lexus has won over lots of these owners because of their luxury/value.
  • merc1merc1 Posts: 6,081
    Nope, not yet. They own a majority share, something like %60 right now with an increase every year until 2007.

    M
  • ljflxljflx Posts: 4,679
    Many high-end buyers like to mix luxury cars and sport cars. The old MB cars were never performance oriented cars nor is a base S-class car much of a performer though it's more so than past generation ones. Yet in the past how often would you see those same owners have a Porsche or an SL or even a Vette in their garages or in their second home. It's a joke for anyone to think an LS430 buyer isn't into or wouldn't appreciate a performance car. But you buy based on your priorities. Luxury, a spectacular ride and reliability are more important to me than performance particularly when you have kids in the car most of time. When I'm driving alone, it's in a NY area rush hour 90% of the time - so good luck being able to have fun in those moments. Lexus scores as high on the scale as possible in my priorities and I'm sure that's the case for most LS430 owners. Given this customer base is mainly $250k per year and up the value side is a nice extra but by no means the main reason you buy the car. Remember how it was impossible to get your hands on a $71k ultra when these cars first came out.
  • bernard1bernard1 Posts: 58
    I'm not sure what you are trying to tell me. We seem to agree that most Lexus owners appreciate perfomance auto's in addition to luxury autos. I also agree that now and in the past, many luxury car owners also had a perfomance car. I remembe when MB cars were considered a perfomance sedan in the 70's when Cadillac/Contenintal was still king of the road and truly floated like a boat. In fact there were very few large sedans in America at that time that could compete with a 450 SEL or SE.

    I don't know where the 250K base comes from or why it would matter especially with leases as popluar as they are. When the LS first appeared (they were termed Near luxury) a lot of previous MBZ & BMW owners started buying them, one of the reasons they would give at the time was "We saved 30K". This was not a reference to their ability to afford the additional 30K, but that they got everything they wanted/required in the LS and they didn't spend the additional 30K, on the S class.
  • bernard1bernard1 Posts: 58
    One execellent point you make and that is reliability. Lexus has certainly proven it's reliability and has forced MB and BMW to improve their warranties, service and treatment of customers. We own all 3 makes and it's truly a different feel when you go into a Lexus dealership for service. The others are doing better and are really making an effort but they have a way to go to catch Lexus in this area.
  • ljflxljflx Posts: 4,679
    My point was that LS430 buyers are not buying because of value - it's a side benefit and a wonderful one at that. I agree with your point completely on the performance issue re the typical Lexus buyer. Historically, and today as well, only a tiny handful of those buyers who can afford whatever cars they want will restrict their purchases to performance cars.
  • ljflxljflx Posts: 4,679
    As I was driving by the local MB dealership today (BTW it's a MB and Honda dealership - how's that for a combo) I saw the big auto truck off-loading all new SL's. That's all he had loaded on the truck. Definitely a stunning car. Must say I wouldn't mind having one now that I've seen it in the flesh. And unlike the 7 it doesn't matter what color it's in.

    You see I can be objective.

    I've driven the SC430 and it rides beautifully. I'd love to see how the SL rides. If I get a chance to I'll let you know.

    BTW - I've always seen Lexus as standalone dealerships but my business trips are always big city trips. Have you ever seen them in combination with other makes anywhere?
  • patpat Posts: 10,421
    Some of you have suggested that we combine this discussion and the other High End Luxury conversation. It's done, we'll continue here.

    I had an excellent suggestion for a better name for this discussion that could encompass any number of high end vehicles, so I've gone ahead and renamed this one.

    Thanks - have fun!

    Pat
    Host
    Sedans Message Board
  • merc1merc1 Posts: 6,081
    I always knew you could be objective, though the SL is an undeniable car. The SC430 will probably have a "softer" ride than the SL500, at the expense of handling. Yeah a Honda/MB combo is odd since in the Chicago area Honda is almost always a stand alone franchise. Interesting. I did a lot of study on Lexus back in 1988-1989 because I always get caught up in the hoopla of a new brand being launced, and when the Japanese decided to truly enter the game I was most interested. I digress, every Lexus dealership has to be a stand alone affair, it's written into their agreement. In the Chicago area, there are a few Toyota/Lexus combos, but they have seperate sales, service, everything, though many times the Lexus store is only a short walk down the same sidewalk. I dont' know if this has been changed (which I doubt), but anyone wanting a Lexus franchise must provide "exclusive" Lexus facilities.

    M
  • nealm1nealm1 Posts: 154
    " Profits are not everything, thats what I like about the European makes, they'll build the fun cars...profits not being the main priority, the cars are."

    Do you really believe that about MB, Audi and BMW? Either I am much too cynical or you are much too naive.
  • bernard1bernard1 Posts: 58
    Have you read any of Porsche's recent press releases? Everything centers around profits. They will not make a car for fun if there are no major league profits.
  • ljflxljflx Posts: 4,679
    If MB had taken Lexus as seriously as you did they might have knocked them out of the box before they really got rolling. Maybe they thought they would have been another Acura.

    Got my MT in the mail today and I briefly looked at the article of MB AMG vs. BMW M. In each case MT opts for the BMW and I must say in each case I'd take the MB. But I do think both should put a halt to the tuned trucks before people start killing themselves in those things. I saw an X-5 lose control on a curve in the rain last week and take out a guard rail. Luckily the only things damaged were the guard rail and the truck. The latter looked like its road days were over.
  • bobbyknightbobbyknight Posts: 121
    LOL! Isn't the X5 supposed to be an "off-road" vehicle yet couldn't cut it in the rain? I never saw the point in the X5 anyway. Still looking for why the Porsche Cayenne even exists.

    I never understood why BMW touted their X5's handling around an autocross track. If you wanted something that handled like a car then why don't you buy a car instead. Plus, a 5-series wagon has more cargo room inside.

    Go Hoosiers!!
  • merc1merc1 Posts: 6,081
    Of course they're aim is to make money, but these cars like the RS6, M3 are also expensive to develop and usually don't make as much money as say a regular A6 or 3-Series model. Is that clearer? A car like a RS6 exists and is driven more so by passion than the balance sheet.
    bernard1,

    Yep I have, but again...see what I said above. Porsche's GT2 is not for profits primarily it's to prove superiority on the track....while making a profit. The regular 911' s generate the real revenue. What you just stated about them not making a car unless it's profitable is what I stated several posts ago.

    Guys, I'm not saying that profits aren't important, because they are. However the European companys are just as driven by making a hell of a car too. The Japanese tend to limit themselves to mainstream products with profits/sales being the #1 reason for their being.

    ljflx,

    Well who knows on that one. Some say Mercedes did take Lexus seriously in the beginning some say they didn't. I do know that Mercedes was in better shape than either BMW (no V8's at all) or Jaguar at the time to deal with Lexus. Lexus also aimed a lot higher than Acura did too. The Acura Legend of 1986 got creamed by the also new 300E at the time, so Acura didn't really aspire to be at the same level as Mercedes-Benz. They didn't truly have a real "luxury" car until the second generation Legend came in 1991. The first generation legend was barely a step up from a Maxima at the time. Hardly at the level of the first LS400.

    M
  • bobbyknightbobbyknight Posts: 121
    I hear what your saying and agree with you. If audi was all about profits and sales they would bring over the A3 than produce and certify 500-1000 RS6's.

    Acura did the exact same thing to the established luxury marques that lexus did. When the legend came out in 1986, it was just as good as the 300E for almost half the price. Do you guys realize that a late '80s, early '90s 300E was going close to 50K when new? That's amazing! BTW, if you think the '86 legend was anything like a '86 Maxima, I want you to go back and take a look at some Maxima pictures. Also, Acura had the best dealers and customer service at the time.
  • merc1merc1 Posts: 6,081
    I seem to remember a comaparison between the 300E, STS and Legend, the 300E easily walked away from them both. The Legend was no where near being as good as the 300E. What I was saying about the Legend versus the Maxima is that it had precious little (if anything) to make it any better than the Maxima at the time, especially when the 1989 Maxima arrived. I did say Acura did the same thing as Lexus, but they clearly didn't aim as high.

    You're right about the 300E, the 1993 model was $49,900, with far less equipment than today's $49,115 E320. That is amazing. I was just thinking, the 1990 500SL debuted at $83,500 and the 2003 SL500 is only $86,665.

    M
  • bobbyknightbobbyknight Posts: 121
    Yeah, I remember the March 1993 issue of C&D (off the top of my head) that compared the LS400, XJ6, 400E, 740i, and the V8 quattro. The 400E had a price of (Gasp!)61K if I can remember correctly. It would be difficult to option out a E430 to be that much. That IS amazing. Since MB had no competition back in the late '90s they could charge whatever they wanted for their cars and I'm sure they were raking in the profits.

    Just think what you are getting now in comparison to in 1990. I wonder what that 61K 400E would cost adjusting for inflation.
  • gsenthilgsenthil Posts: 154
    Some more info on AMGs- seems its true that MB will complete its ownership of AMG in 2009


    http://forums.mbnz.org/forums/r170/vthread.asp?messid=57795


    Senthil

  • bernard1bernard1 Posts: 58
    In the late 80's, the price of all E and S class MB's were higher but they had better quality. Vault tight. MB reduced their prices, eliminated most of the bargaining from list price and reduced the quality. Check out BMW, some of there list prices exceed the price of competing model from MB. Lexus forced MB to reduce their price but has had very little effect on BMW. In the late 90's a S500 was about 88K with increases each year. How many cars were they going to sell when those cars hit 100K. They had to reduce their price and still they are about 15K more than the Lexus. Also as the quality has come down, lots of MB owners moved to BMW who's quality was goin up.

    No, the X5 is not supposed to be an "off road" Vehicle. The X5 was made to generate additional profits. BMW offers an SAV, emphasis on sport, AWD for light snow, and better traction. It does out handle (on road) the other SUV's and is more fun to drive. It is short on off road abilities and space so we don't expect it to compete with our LX.

    Porsche admits the Cayenne is to do the same and keep them independent. In fact the first year's production of the Cayenne will be 1/3 of their total auto production for the year. With plans to expand to 50% of their total auto production within 2 yrs.

    merc1 - Porsche has decided that they will produce their new super car. But that decision wasn't made until they received X amount of committed orders to insure they made money. Porsche didn't hide this fact, they said up front, no orders no car. Don't get me wrong, I love the cars that are perfomance based, but if there were no profits to be had, those perfomance cars would not be made in todays market even if it does bring braging rights. In the past, it was about the cars but most of those makers are out of business or have sold out to larger firms like GM, Fiat and Ford.

    BMW doesn't sell many M5's but they have sold every one they can produce and the profit margin on the M5 is more than that of a 530i or 540i.
  • bobbyknightbobbyknight Posts: 121
    Of course Lexus got BMW's attention. That's why for 1993 they brought out the 740 for 735 money (which by the way was 400E money). The 7-series was considerably more car than the 400E, yet the pricing was similar. This proves that MB's pricing was out of control. Pricing for the 5-series has grown little to it's present version, along with the present E-Class.

    There is no doubt that MB in the late 80s and early 90s had HUGE profit margins on their cars. For 1994, MB reduced the pricing for their E-Class by 10K, and the cars were essentially the same.

    You're right, the X5 is not an off-road vehicle, but essentially an any-road vehicle. I still don't understand the point of the X5 other than to generate profits. The Cayenne is going to totally tarnish Porsche's image, plus will be a huge failure once the hype dies down. Serves them right if you ask me.
  • bernard1bernard1 Posts: 58
    Yep the X5 was to just generate profits. But it is fun to drive and works in the snow. It's still a debate if the Cayenne is going to tarnish the Porsche image but I have a feeling it will sell if they price it right.

    I'm looking forward to a new Audi S8. I will probably not buy another S class. I didn't have any problems with my previous ones but the news do not seem to offer that vault like substance. If Audi produces a technology leading S8 with a new budy style and maintain the AWD, I'll put it my garage instead of that 745il.

    I don't know if Lexus got BMW's attention when it comes to pricing. BMW is selling perfomance which they have no problems telling the world that Lexus can't match them. The 740 is BMW's answer to the S, and they maintained about the same distance in price below the S with the 740 as they did with the 735. Not to mention they stayed about the same $$ above Lexus. In fact in 1993 the LS was still considered "near luxury" and were not an honest threat to MB or BMW. The LS was bearly 3 yrs old.

    In the service area, Lexus made them both take notice. Both MB and BMW have improved and offers full maintenance warranties where Lexus doesn't anymore.

    Lexus has done a great job I just wish they would work on a fresh idea for the exterior of the LS.

    While our Lexus is very luxurious it just doesn't excite me like our European cars.
  • ljflxljflx Posts: 4,679
    If I remember right the LS400 was originally viewed as competition to the E-420/430. In fact on the 95 questionaire as a follow-up to a purchase or lease they asked you what other cars you considered. You didn't have to put E-430 as they already had put it in for you. All you had to do was put an x and list any other cars you also may have looked at. It was the 98 model that started the push to compete with the S and the 2001 that really accelerated it further.

    In the bull market of the 90's many people would have been able to afford $100k S-500's. MB had to do something with price, not so much because it was getting too high but because of the big economic difference it had to cars that were winning such high reliability scores and renewing virtually every customer on a new car purchase. If Lexus isn't there MB does not cut prices. The price/value today vs. 1990 is all due to competition. Does anyone really think otherwise?
  • bobbyknightbobbyknight Posts: 121
    The 400E was a pipe dream in 1990. When the LS400/Q45 was introduced, the 300E had a 177hp/3 liter compared to a 250hp/4 liter V8 of the LS400 for about 10K less. The LS400 offered the horsepower and luxury of a 560SEL for much less than an E-CLass. Kind of makes you wonder what the MB executives were thinking in 1990!

    bernard: BMW's didn't have the same pricing problem as MB did when the Japanese duo came out. A BMW 525i was still reasonably priced compared to it's eqivalent MB. The 5-series was priced similar to the smaller and less powerful 190E 2.6. Lexus and Infiniti did have an impact on the product, V8s became the norm for the 5 and 7 series not long after lexus entered the picture. Don't know if that was directly because of Lexus or not, but it does seem like a interesting coincidence.
  • merc1merc1 Posts: 6,081
    I kinda like the Z4, oh well.

    To all: Have a Happy Thanksgiving.

    M
  • merc1merc1 Posts: 6,081
    You're missing the point about profits. What you've just stated about the Carrera GT is common sense, orders = car. My point is that Japanese companies wouldn't even bother with a car like the Carrera GT. The Japanese wouldn't see the point of a car like a M5 or Carrera GT, though they have the ability to produce such cars. I would doubt that about the profit margin on the M5, because a loaded 540i is only 10K less, the M5's engine is way more expensive to build than the 540i's. I would think they make more money on a loaded 530i or 525i.

    bobbyknight,

    Yep the 400E was hugely expensive, the 500E (probably my favorite 4-door Benz of all time) was $80K at the time. The 400E was just a stopgap effort to compete with the LS400 of the time. The W124 chassis was an expensive one, and you could tell....even GM admitted that is was the most solid car built during it's day. These cars are still reguarded by many Benz fans as the best "E" Mercedes ever made. I can't take a definite stance on that opinion, though I think the current W210 E is not as well made structurally or in some of the cabin materials.

    Yes Lexus did force the value issue, MB lowered prices in 1994 for the first time in over 100+ years of carmaking. Monumental change indeed. BMW has had performance as their isolation from Lexus, many still don't cross shop the two for this very reason. Mercedes' cars philosphy wise sit in the middle of the two, the most difficult place to be.

    M
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