Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

High End Luxury Cars



  • pablo_lpablo_l Posts: 491
    But then again, people who buy fresh-off-a-lease cars typically get extended warranty perks, which distorts that picture. Because that makes the MB -and I just use them because you mention them in your example- a downright attractive 3 year old choice (not for me, though, too late for damage control): between the lower price tag and the Starmark stuff they wrap into their 2-3 year old cars... Think about it, in my particular example if I has leased and then bought the car off the lease, I would have saved myself over $4.5k in maintenance costs already which MB is willing to subsidize for cars they sell through the leasing channel and then flip... and this seems a common business practise. All reliability does in that case is add to the vendors' margins (since they're footing the bill for service costs in such a scenario), the benefit to the consumer is merely less inconvenience. And I'll put up with some inconvenience, and will increasingly do so with a smile when it saves me increasing amounts of money. With my particular ownership, I have inconvience, plus high maintenance costs, and all for the privilege of pride of ownership for a 5 year old car... it just doesn't compute for me when I add up the numbers alone, let alone the gutfeel element. So yes, *if* I were to go for pride of ownership, I'd pick the Lex over the MB every time now, because reputation for reliability does count heavily when you buy a car (didn't in '99/'00, which was short sighted by me). But I'd probably lease it first and then buy it off the lease, which as I understand is also what you consider doing. The MB experience is probably one I'll never go for again - which is sad given the fact that I come from a Merc-loving family (which I never quite went for myself, my wife's is the first MB I've ever bought). But contrast my experience with old-school Mercedes: my mother has had hers for about 11 years now (and she bought it as it was 6 to 8 years old), and it looks good and drives safely and reliably - and I doubt she spends more than $200 in yearly maintenance. it's one of those indestructible diesels... those were the days when such cars were built to last their owners forever.


    Mind you, this is not nostalgia speaking: today's cars are far better and safer drives than almost any car that's over 10 years old. My everyday driving car is something I probably would not keep for 15 years...


    I guess my point simply is that going forward I think I'll lease cars, a major shift in my personal approach to car ownership, and I do that simply because I think the concept of ownership is slowly but surely being obsoleted. Ownership makes little sense if I *have* to buy a new car every 5 years. I need the option to keep the car longer without it becoming a total financial liability, which any modern car has potential to do given its complexity.
  • designmandesignman Posts: 2,129
    In my opinion buying vs leasing is a trivial nickel/dime decision. Deciding on the car that suits you best is where it’s at.
  • kyfdxkyfdx Posts: 63,046
    I agree somewhat..


    Buying vs. leasing is more of a "financing" decision in my book..


    Sometimes it is more than nickel/dime... Sometimes the manufacturer lays on lease incentives only.. Then, even if you are a cash customer, you can't ignore the advantages..


    Getting the right car IS the most important thing.





    Prices Paid, Lease Questions, SUVs

    Need help picking out a make/model, finding inventory, or advice on pricing? Talk to an Edmunds Car Shopping Advisor

  • oacoac Posts: 1,594
    I find that a Carerra GT "suits me best", but guess what I cannot afford one at this time - leasing or buying. So, I am influenced by the "nickel/dime" decision. Maybe some day I'll be like you, designman, where I never have to think of the cost, just "what suits me best".


  • designmandesignman Posts: 2,129
    A-h-h Oac, tell me you are kidding. You missed my point. You can buy or lease a Corolla or a Quattroporte, so buying vs leasing has little to do with cost. Surely expensive cars “suit” most of us. I’m talking about finding the right car within a given budget. It really doesn’t matter which method is chosen because you are going to pay for the car either way. Any difference is what I call “nickel/dime”.


    By the way, I choose to buy for the following reasons:

    1 – Feel handcuffed by the duration of the lease

    2 – Ditto with mileage

    3 – Buying costs less (kyfdx, I expect a response from you here ;-)


    One great thing about leasing though, I love the idea of walking away from the car with the option to buy. Now if we REALLY wanted to save money the way to go is buy used and keep the car longterm.


    BTW, if I wanted to buy what “suited” me by your interpretation I’d have a 911 Turbo, E39 M5, Boxster and an S55 AMG for the little woman, unless of course she chose the LS which I have a feeling is what she will want the next time around unless BMW comes to its senses. You have no idea how she loves the 530 but hates the new designs—just like me.


    One more thing. I can honestly say that this “pride of ownership” thing is something that never crossed my mind. I recognize the fact that some of the smartest investors are always in “hock”… using other people’s money to make money. This can be risky business though if you don’t know what you are doing. Remember in the early 90s when the Donald had a negative worth of what, some $500 mil? My father was a cash buyer and always told me never to buy stocks on margin so I guess I inherited some (not all) of his attitude. That missive by kgary kind of reminded me of him although I disagree with some of that.


    Oac, you don't want the Carrera GT, you'd be hitting bottom all over the place. You'd need a fork lift to get it into every gas station ;-)
  • ljflxljflx Posts: 4,690
    They have plummeted here in NJ. I paid 178.9 for 93 octane today.


    Designman - I've never bought stocks on margin. That is the one line I'll never cross. Leasing and auto financing are small potatoes and loans for property that never seems to stop rising in price are very safe bets always. If I didn't take a mortgage to buy my home I'd have missed a large jump in net worth as a result. You've got to find the right mix where you're not a slave to cash and not a slave to debt.
  • designmandesignman Posts: 2,129
    I think you hit the nail on the head earlier when you alluded to handling debt by being in a positive cash flow/equity situation. Some people keep going up in debt without being able to cover it and without even realizing it—trouble.


    IMO margin buying isn't much different from rolling dice with house credit.


    NJ gas prices must have gone down in two days. I think it was 1.97 on Friday.
  • ljflxljflx Posts: 4,690
    I have some real bad BMW news for you - see link. I also want to be the first to pre-welcome you to the LS board.

  - gin


    Looks like Bangle's move upstairs was a real promotion and not a way to get him off of a "hands on" approach.


    And here's anothe story of interest

  - html


    Don't know if the sketch will come across but there is one of a BMW sports car that looks great as their entry into the "Ultimate L.A." Machine competition.
  • ljflxljflx Posts: 4,690
    Their problems run very deep. This company isn't turning around anytime soon and Lexus is getting aggressive and going worldwide. Next few years will be interesting. After reading this story I think MB's status king days are numbered. It's hard to want an expensive product from a company with many problems facing it and you pay premium dollar over alternative better made expensive products for their problem. This is only enhanced when you start seeing the word "faded" associated with its name. The issue isn't how to fix the problem but will the internal operating dynamics and politics of the company, and the laws and heritage of the land it resides in, allow it to be fixed. What's also interesting is that Mercedes offensive onslauhght with more variant cars and engines and trying to be all things to all people (save the SUV market) was OK short-term (and made it a darling of the car mags) but has exacerbated its real business problems.

  - - - - - - des.html
  • sysweisyswei Posts: 1,804 =2005009b


    click the small pic to go to a gallery. Imho, styling looks only ok.
  • oacoac Posts: 1,594
    "A-h-h Oac, tell me you are kidding..."


    Yes I was.... That's why I had the smiley face at the end of my post.


    BUT it worked didn't it ? It got you to pony up your typical well-informed and thoughtful post, rather than the one-liner you have been reduced to lately...


    Love reading from Len, as well. I learn something from him everytime...
  • oacoac Posts: 1,594
    It was eons ago now (in the time when Merc1 was a staple debater on Edmunds) when I posited that MBs problems run deep and they were not positioning themselves to turn things around. In fact, I recall using the example of the (then) 116-yr-old Barron's Bank (UK) which collapsed due in large part to the unscruppullous workings of a broker in their Asian opperation (derivatives trading). When the dust finally settled on the sordid affair, the bank was no more, despite such a lofty and glorious 100+-year heritage.... Of course, I was chewed up by the MB fans (mostly Merc1) of living in *sales fantasy* and other blah blah blah... I don't want to say *I told you so*, but Len is right.


    Just this past weekend, my friend who owns a 1998 S500 (the tank) told me he will never buy an MB again. This guy was a huge German-car nut (owned a 911 (sold) and a 735i (sold)). Now, he just purchased a 2005 Escallade with the 6L motor; just couldn't justify the additional $15K for the 2005 LX470. He's never owned a Japanese car in his life, but claimed his next sedan will definitely be the LS. His S500 now goes to his 17-yr-old son as his daily driver. Why, I asked ? He told me they just don't build them as they used to. Too many issues with his MB. For example, his rear-view mirror was toast. Cost $1100. Geez !!!


    I guess we'll see how MB makes these adjustments going forward. Hopefully, they come to their senses rather than living off their heritage and brand cache and do something quick.

  • pablo_lpablo_l Posts: 491
    I am amazed that DC shareholders still keep Schrempp in the CEO spot, despite the utter inability he has shown to successfully tackle *one* single issue that the company has had since he took over. His expansion course had no clear strategy other than growth at any cost for growth's sake, and now has left the company without clear focus and direction. The strategy is not discernible, things within DC keep going on with unresolved ambiguities. No true synergies, let alone clear brand identities, have been developed between MB and Chrysler. The darker it gets, the faster Schrempp tries to drive. He was just quoted with his master plan in the German press today: more new models and variants. No word on consolidation, no word on commitment to their traditional core values (such as quality). It will be a case study in how to manage a company down, and the sad thing is that it is blatantly apparent, and yet in the worst of Gewrman management tradition no one does anything about it. It's amusing to see that, while Volkswagen do their damndest to become more upscale, Mercedes management is doing everything they can to manage their image down-market. The brand's "stickiness" in people's minds will only carry them so far.
  • ljflxljflx Posts: 4,690
    General rule of advanced business is that when you bring in a turn around exec, who's a cost cutter, then you have run all the other scenarios and none of them worked. The strong euro is also forcing their hand. I never thought that this was a Barron's because that type of thing happens (and is much more probable) in service businesses and is rare in manufacturing ops. When it does happen in manufacturing its more apt to be the Food Explorer/Firestone type of problem that can bring the house down. But there is no question that the MB problems are deep, worse than what is being stated and a lot more serious than any MB fan can handle or wants to hear about.


    Cost-cutting is easy on paper but not easy on your psyche since you are affecting people's live's. You always go with a guy who's done it or worked under someone who's done it. From what I read about this guy - he can withstand the pressures within the company but with a marquee German name like MB there will be tremendous union and political pressure to withstand as well. He hasn't been there (political) - very few have. To stave all that off and save the prestige of the brand name - knowing that they will have to cut back on models and options that exist today (otherwise you can't cut the costs in the first place) is an impossible task. That's why the status king days are numbered. And as I said earlier - the words faded and MB should never be in the same sentence if you want "status" clout.


    The other thing brought out by that story is MB's excessive white collar management and inefficient production. I said a long time ago that Lexus is cheaper because its a streamlined very efficient company with far advancced robotics than MB has. Hence the cars are built cheaper and with greater precision and quality. End result - the phenomenal reliability we see. When you overpay for MB it's not just status you're paying for - it's also all that excess management and inefficient production as well. Merc1 used to think MB charged top dollar because they could do whatecer they pleased. He never understood they charged a lot because they had to and that if the volume fell or the price was forced to come down than they were in trouble. Unmentioned in that story is that MB had to take back many 2001 and 2002 cars for prices that were lower than the residuals on the original leases (52% vS 65-67%). That is the Enron part of the story.
  • ljflxljflx Posts: 4,690
    You know sometimes you brainwash yourself and become a believer in the BS you are saying. The guy brought in is the exact opposite of Schremp's plan. The plan he has - re multitude of choice and models - is what they've done the past 10 years. I think both Schremp and his master plan are in their 9th life. If somehow Schremp prevails you will see the new MB head walk and that will only mean that the company's problems are worsening. If this guy prevails Schremp will walk or be forced out.


    US boards are increasingly being held accountable for a CEO and his staff's bad decisions - Worldcom, Disney, Enron - and need to pay with damages from their pockets that insurance doesn't cover . It may become a global thing in the future. maybe the BOD's will finally represent shareholders the way they are supposed to.
  • pablo_lpablo_l Posts: 491
    Not sure what guy you're talking about - Schrempp *is* the CEO of DC as of now, has been since '95, and has been a board member since I have business memory. And the guy's a disaster, arrogance combined with inertia is not a good combination. Typical German industrial aristocracy - they do nothing until a real trainwreck happens. Not sure where you read anything positive about MB's current direction from me. So if my points are BS, by inference yours are too, given we're saying the same thing.
  • designmandesignman Posts: 2,129
    I think Ljflx was using "you" in the general sense and referring to either Eckhard Cordes, head of Mercedes or Schrempp himself.
  • oacoac Posts: 1,594


    Guess what, the new 5 design is beginning to grow on me. Really. There was this 545i riding my tail in traffic earlier today. I took a long look at it as it whizzed by me. Lovely car. With three other 2004/05 5-series at my work place, I see them everyday and I am starting to like the it. Weird, but true !!


    Bangle may not be that bad a designer afterall. Maybe he is ahead of his time, and it is just we paeons that cannot understand such evolutionary designs.
  • designmandesignman Posts: 2,129
    Oh Jeez, what next. Saints preserve us.
  • ljflxljflx Posts: 4,690
    No - The Jets win the super bowl. OAC's from San Diego country so he's not himself today.
  • designmandesignman Posts: 2,129
    The both of you. Dump the Martinis and go to sleep early tonight.
  • oacoac Posts: 1,594
    Funny you should insert the NYJ into this forum. I am still hurting from their undeserved victory this past Saturday against my beloved Chargers. If NY Jets should reach the SuperBowls this year, I'd trade-in my LS and buy a 5-series !!!


    Now, knowing that is virtually impossible, I should have no fear.


    Oh, it must be the *Tsunami after-effect* rain that has pestered us here for the past week. This has certainly impaired my vision and sensibility for me to start liking the Bangle-ized 5-series ??? Unfortunately, it is actually true. Don't ask me to explain it tho'. I also do like the 300C as well. Go figure ...
  • ljflxljflx Posts: 4,690
    What about Bangle 2.0. You need to catch-up on the martini's.


    OAC - forget the 5-series, get the LX470 and go skiing in that 20 feet of snow in the mountains.
  • designmandesignman Posts: 2,129
    That's Detroit Auto Show PR sizzle... Bangle shooting his mouth off in his best corporate brogue.
  • I am a faithful follower of this board because Pablo and others have some thoughtful observations and good insights on where the luxury market will end up. While I agree with Pablo's basic statement that the "car business model has tipped and manufacturers do not build their higher end cars to provide their owners with 10 years of hassle free.....", let me make three points.


    1) Not all manufacturers historically were focused on long service life. Certainly, the BMW 7 Series has been plagued with basic engineering problems since day one (plastic thermostat housings, plastic water pump parts, heads that go crack in the night, auto tranny's that were good for 100,000 miles max. with towing verboten, cheap liners or sleeves, etc.) Jaguar similarly never was a 200,000 mile car.


    2) While the electronics are very problematic and expensive to fix, the basic power trains seem to be getting better and better. They are even approaching the reliabililty and service life of a small block Chevrolet, a Chrysler 727 or Ford C6 tranny. (The next time you are at an airport, the baggage tugs are all running 727s or Ford C6 trannys often behind Ford 300 engines.)


    3) Even if we agree that the the buy'em and hold'em strategy is outdated, this was probably unintentional on the manufacturers' part. In other words, they didn't plan it this way. They couldn't have. Has their statistical analysis gotten so good that they can predict mean time to failure for these components? As a side note, look at the factory to dealer cost of the BMW CPO Program. It is a very hefty $1200 for the certificate alone AFTER all the remedial service work, delayed warranty work, etc. has been done. Because of the justified paronia about owning a BMW out of warranty, the dealer mark up on CPO cars seems to me to be on the order of about $3500 to $4000 above a non CPO car. So, the industry has found a way through their CPO programs to spin around defeat into victory, making chicken sh.. into chicken salad!
  • pablo_lpablo_l Posts: 491
    > I think Ljflx was using "you" in the general

    > sense and referring to either Eckhard Cordes,

    > head of Mercedes or Schrempp himself.


    He was clearly addressing me telling me I brainwash myself and spout BS, it would seem. Which I find somewhat weird, first because I was agreeing with him, second because it seems out of character...
  • pablo_lpablo_l Posts: 491
    Likewise, I follow this board because the discussions are very interesting, and excellent insights are shared.


    I find your (3) very worthy of discussion:


    > 3) Even if we agree that the the buy'em and

    > hold'em strategy is outdated, this was

    > probably unintentional on the manufacturers'

    > part. In other words, they didn't plan it this

    > way. They couln't have. Has their statistical

    > analysis gotten so good that they can predict

    > mean time to failure for these components?


    Needless to say I do not have an answer, but if I would work in product planning for a major car manufacturer, I get the market data telling me that power and gimmickry rank ahead of relaibility with a majority of my target customers (who just intend to drive the car for 3 years), and then some engineer tells me that it increases my COGS by a significant amount of money if a subsystem is designed for 300k miles instead of 100k, and on top of that management makes margins highest priority, then I'd stick with the lower spec. So it could also be that vendors are making design trade-offs simply because they result in higher margins without the majority of the primary target customer group being affected all too negatively. So it *could* be all part of a planning cycle. Or it could be all accidental, which would be a disgrace since companies such as Toyota demonstrate that you can combine leading top reliability scores with industry leading profitability - and perhaps there's even some causality there.
  • ljflxljflx Posts: 4,690
    No, Pablo - maybe i should have been clearer and didn't react further because designman was 100% right. By you - in that post - I meant any person in general can start to believ the "party" line if they say it often enough. In this case the you was intended as Jergen Schremp and the other guy was the newly appointed MB boss. I was attempting to amplify what you were saying in your post and the last thing in the world I had in mind was to post against you personally. I think you're posts are excellent reads and well thought out. Sorry for being ambiguous in that post.
  • garyh1garyh1 Posts: 386
    Sorry guys, but this does not pass the reality test. If reliability no longer mattered to the targeted buyers, then MB would be eating Lexus' lunch, not vice versa. Why were MB sales down and Lexus' were up? Because Lexus is so much better at "power and gimmickry" than MB? I don't think so. I think it goes much more to Len's observations on robotic production effectiveness and efficiency, and the design philosophy of keeping systems separate.


    "Buy and hold" is perhaps outdated for MB owners-- and maybe that is why their sales are down; the segment that looks for reliability has moved on to the Japanese manufacturers.


    When buy-and-hold truly breaks down is when there is a major change in technology. Perhaps when airbags came in, people who could afford to replace cars when desired rather than needed, had an incentive to buy. I think the next time will be when hybrid engine technology becomes entrenched by offering improved performance as well as efficiency. It would be interesting to see Lexus put a more powerful hybrid 5.0L engine in the LS instead of just the upgrade from 3.3L to 4.0L they are putting in the RX; my guess is it would quickly outsell the current 4.3L.
Sign In or Register to comment.