(1) asking price is not market clearing price. I can put a $100k price tag on my 6-year Saab tomorrow for sale. . . it doesn't mean the car is worth $100k, or even $50k, or even $25k, or even $15k. Likewise, how dealers would like to decorate their lots to facilitate new car sales has nothing to do with real used car market clearing price.
(2) price does not equal value. Price only reflects supply and demand. I might just be able to auction off the same Saab wagon 10 years from now (16 year old by then) at a charity event for $50k, with something like my signature or a business/stock tip or whatever in the glove box. It may be able to fetch that price because it's a one-off product, and I'm not keen on expanding sales volume. That transaction price does not mean all 16-year old Saab wagons have a value of $50k.
If MB only wants to sell 10 S class in a month, they can ring up a price tag of $200k . . . but, $2mil a month over a production cycle of 5 years, or $120mil toltal revenue is not nearly enough to provide enough engineering funds to work the bugs out for the next S class. That's why MB is bound to introduce S430, S350 and even perhaps a S240D at some point to help amortize R&D. That's what will kill S550 resale . . . that, and people who choose to buy LS460 and save a bundle.
If you go to the BMW dealer to buy a 550i and the salesman says "we can improve the gas mileage a smidge over the 535i, but we have to cut the trunk in half", how many buyers do you think would sign up for that?
The only clue we have on that question would be the number of people buying GS450h over GS350. They are literally signing up for that, no? I would too if I were looking for a midsize sedan. Midsize cars like the 5 and GS are commute cars. If I need to carry a lot of stuff, I'd get an SUV . . . well, actually I do. I switched from 5 series to a wagon six years ago precisely because midsize sedans are quite hopeless in terms of cargo capacity. When my car need went beyond one-person commute and some grocery shopping (for one person), I switched from the 5 series to the wagon; Saab over bimmer was because I started dating someone in the snowy hills, where the previous 5 series did not do well . . . that and some grevious stock market losses that I suffered in 2000 . . . losing the value of a brand new 5 series in a single day, on several days in spring 2000. So frugality became a new mantra.
Say you need to take 3 to the airport. How amused would your passengers be if you said "sorry you have to hold your luggage on your knees, but I'm saving 2mpg!"
Life must suck for convertible owners :-) Once again, there's SUV's for the times when cargo capacity is needed. The way we travel, there's no way three people's luggage can fit in the trunk of a 5 series. Taxi costs less than airport parking anyway.
The cars may be differently equipped, you know. Jan07 was the second month of LS availability, the dealers may have been filling fully-loaded orders only.
I doubt LS sales would drop 20% in the second model year like S class has done. LS has never done that, after so many model cycles. In fact, it would not surprise me at all if LS sales stay more or less level or even increase slightly, because all the cautious would-be buyers in the face of a rather dramatic step forward for LS, which has seen far more radical changes this model cycle than the corresponding S class has.
Sales dropping 20% in second model year is usually considered a flop. Carmaking involves significant fixed overhead. Having a 25% over-capacity in the 2nd model year of a 5-7yr model cycle is horrendous waste. Remember the discussions we had about Lexus allocating more LS600L in the first model year to Japan and Europe instead of the US? That's called capacity management . . . something MB could do well learning.
"Before anyone thinks that there is a free lunch, there is a lot of empirical data showing the impact of new car incentives on used car pricing. The price of a used XC Wagon just went down a lot because of this lease program. "
What that means is that the real market clearing price of CPO cars would have to go down in lock-steps, either through outright price adjustment, or through padding of additional services and service contracts (underwriting insurance); i.e. more liability.
What's really happening here is classic book-cooking. We went through BMW annual report here a couple months ago. If one has the patience to dig through the first 60 or so pages of the report, it's quite clear that the company is booking profit by turning cash into "leased car inventories." An inventory value that will have to be written down someday as the residual is way out of wack with real auction value. It's no different from other types of aggressive vendor financing that we have seen in the past decades: e.g. Lucent vendor financing to worthless telecom startups in the late 90's . . . and most recently, all the worthless mortgage papers. The trick is short term booked profit based on predicate future cash inflow (be it residual or expected mortgage payment) without properly accounting for the risk associated with such future cash inflow. Assigning a grossly inflated residual is worse than grossly over-estimating the foreclosure sale value of a house: people turning cars in at lease end don't need to seek bankruptcy protection . . . it's an legitimate exercise of a put option underwritten by the banker/manufacturer.
1. Seems like all cars are dropping in transaction price . . incluidng the top-ranked CRV and Fit. Is that because of equipment level difference? or perhaps even model year aging?
2. average APR 10+%?! Are people nuts? How low is their credit worthiness anyway?
Almost every luxury auto firm has or will soon have a high end performance marque (M, AMG, RS, F). But what about Infiniti the company that began its days with an emphasis on performance? NOPE. And the GT-R? Nope that will be a Nissan.
All of the Germans do, Cadillac has its "V" cars, Jag has its "R" cars, and Lexus will soon have the "F" cars. I'm sure Infiniti will feel the pressure and create something eventually, especially considering that the G and M are already much better suited to handle 400hp+ than the IS and GS.
The Skyline GT-R has never been anything close to a luxury car, which is why I think Nissan ultimately decided to go the way they did with the badge. I think it will be more like a mega-Elise than a R8 or 911, but I could be wrong. Calling it a Nissan does leave the door open to create a more luxurious Infiniti version of the car, as with the Z/G35 coupe.
The only clue we have on that question would be the number of people buying GS450h over GS350. They are literally signing up for that, no?
June '07 combined sales of the 430 and 450h were just 141, down 68% compared to June '06 and down 51% YTD v. 2006. They don't release individual numbers for the 450h alone, but assuming half buy the 430 and half buy the 450h, about 3.7% of GS buyers are signing up to have their trunks chopped in half.
Life must suck for convertible owners Once again, there's SUV's for the times when cargo capacity is needed. The way we travel, there's no way three people's luggage can fit in the trunk of a 5 series. Taxi costs less than airport parking anyway.
As for diesel, lung cancer must be a lot of fun.
Actually, I've got a decent 10cu.ft in my XK convertible, so my life is pretty good. Midsize sedans are supposed to be at least somewhat practical, but the 450h's trunk is so small that it's stupid. A days shopping for my wife and I at Zabar's and ABC would not fit in that, and if we took friends with us we'd have to strap them on to the roof. Why buy something as boring as a midsize sedan if that's all the trunk space you need? Why not buy something like a S4 Cabrio instead?
That must be how "clean" diesel works, they route the NOx back into the cabin so it doesn't get out into the atmosphere.
I have not get to test drive a GS450h yet. However, I can state that the GS350 engine is still not comparable in torque smoothness feel compare to my old v8 5-speeds GS430 at low speed. Also, from what I have read, the real life experience of GS450h is much better than the printed specs on paper. If the GS would be my only car, then the 350 or the up coming 460 would be my choice. TM knows this as well, so they are not making a ton of these GSs, or otherwise we should see big discounts on them by now. A days shopping for my wife and I at Zabar's and ABC would not fit in that, and if we took friends with us we'd have to strap them on to the roof. Take you SUV if you guys knew that shopping is on the card. The automatic rear hatch would be very handy when you are carrying that many bags in your hands.
The "lung cancer" comment is totally uncalled for. If you have something to say about emissions, or whatever it is on your mind that prompted that comment, certainly do so, but lung cancer is neither "fun" nor a joking matter.
Assuming half-half between 430 and 450h is probably not a good assumption. In any case, the combined 7.4% shows that most people buy the less expensive model that is almost as good. No big surprise there. 535i sales probably outnumber 550i sales; likewise, 750 sales outnumber 760 sales, by a wide margin.
Come on, if 10cu.ft is "decent," what difference would two less make? Isn't that a little like kettle calling the pot? Why not buy something like S4 Cabrio? Perhaps the person wants a real roof in parts of the country that snows and rains a lot? Perhaps he needs four doors? I'm trasitioning my garage to SUV/wagon and convertibles only myself, in fact I have not had a midsize sedan or any sedan among my cars for half a decade . . . for my own purpose, sedans are stupid, for a couple thousand bucks more wagons (SUV's are wagons) can provide double the cargo space and more . . . but I'm not about to second-guess other people who buy midsize sedans.
Sure "clean diesel" . . . just because the phrase exists, there must be a real product. I will have more faith in "flying pigs," or at least "hybrids with small batteries." If you want to decry performance hybrids because current technology involves a big battery, well, current technology make diesel dirty. And for the forseeable future, "clean diesel" is a relative term compared to really dirty diesels, not to normal gasoline cars. Compared to the normal gasoline cars, even the "clean diesels" will still be dirty.
For the record, I'm against any and all causes that can lead to lung cancer. Lung cancer is a very debilitating and painful ailment. I know because one of my wife's aunts has lung cancer. It's not fun at all; that's why the irony in my ealier statement. That's why I'm against diesel. Diesel use is one of the leading causes of lung cancer in the world today. The socalled "clean diesel" will be a product that still produces far more lung-cancer causing particulates than normal gasoline engines.
Sales of the GS haven't been too good, have they? If the GS450h was indeed making a significant dent in GS sales, wouldn't we be seeing a big spurt upward in GS sales?
People are just not that stupid. The GS450h happens to be a sedan, with two-seater sports car trunk room; only 7.5 cu ft; half the size of a normal trunk. You have down played the amount of the GS450h trunk space in a previous post, but for most people the amount of trunk space is significant.
The mpg of the GS450h is mediocre for a hybrid. 25-28mpg estimated is pretty bad for a hybrid.
The GS450 is not a weekend toy car. Most people would be using it every day as their daily driver. It happens to be too impractical for that.
Just as I predicted here a while back that Hyundai is the company to watch, I have another prediction:
The GS450h will become O B S O L E T E just like the Accord hybrid and will be withdrawn within the next two years.
Modern clean-burning low sulfur diesel engine technology is an unstoppable force which will finally put the absurd hybrid technology to bed and will be the first major significant answer to not delivering our money into our enemies' pockets.
In that case Europe should be blanketed with an alarming lung cancer epidemic with significant increased mortality. Many more modern ULSD diesels there than here. Can you produce a study indicating such a positive correlation with modern ultra low sulfur diesel engines and lung cancer? Do you hear or read anything in the media about lung cancer being a serious uncontrollable disease in Europe?
I think 25MPG is pretty good for a 330+ HP sedan weighing close to 2 tons.
I believe Lexus will produce another GS Hybrid when it is redeesigned. And it would need to get 30% better fuel at a minimum.
Lithium-Ion batteries will probably be used next time, and maybe even can be stored under the rear seat, like the Highlander Hybrid, since cargo space in a sedan is so precious.
The GS Hybrid concept just needs some fine-tuning, that's all. Lexus didn't save the world on this one. And that's ok. Just gettin' warmed up.
the combined 7.4% shows that most people buy the less expensive model that is almost as good. No big surprise there. 535i sales probably outnumber 550i sales; likewise, 750 sales outnumber 760 sales, by a wide margin.
Brightness is correct on this point. BMW breaks down their sales performance in great detail: BMW June 2007 sales
Come on, if 10cu.ft is "decent," what difference would two less make? Isn't that a little like kettle calling the pot?
A pretty big difference actually. One set of golf clubs or two, a big suitcase or not, etc. 7.5cu.ft is really small. I like the LS because its extremely comfortable for four (five is generally doable without complaints), and there's also plenty of room in the trunk, should I need it for anything. The X3 is a great commute car for my wife, but its a bit cramped in back, and she doesn't need\want something enormous like a Q7.
Well, the 350 HP 2007 BMW 535d also weighs close to two tons (3652 lbs) has a normal-sized trunk of 14 cu ft and gets 35.3 mpg estimated.
3652 lbs. isn't really that close to two tons. The GS450h is actually over two tons (so, close to two tons from the other side) to the tune of 134 lbs., making it a tubby 482 lbs. heavier than the 535d.
In fact, the GS350 is 52 lbs. HEAVIER than the 535d! Explain to me this "great" hybrid system again
Now we know why the big european carmerks are pushing diesels in the US . . . because their diesel cars are being banned and taxed by recent emission regulations in Europe.
535d is not legal or available in all 50 states. The mileage cited uses a different testing method than 2008 EPA method, and the gallon unit is also different (by 20% or thereabouts). So there is no real comparison. Vaporware is always better than real products, on paper :-)
"The Sunday Times, citing unnamed sources in London, said the decision to sell Volvo was made in the past two weeks, but that the timing of the sale had yet to be decided.
No bank had been appointed to handle the transaction, the newspaper said, adding the deal could be worth $8 billion.
Messages seeking comment on the report were left Sunday with Ford spokesmen.
Ford acquired Volvo from Sweden's Volvo AB in 1999 for $6.45 billion."
At least Ford can be happy that they didn't vaporize $38B with Volvo.
When the 50-state clean diesels arrive here (possibly as soon as Sring '08 - as a VW 2.0 L TDI), the mileage difference between gas counterparts and the diesel alternatives will be significant.
In the case of many hybrids, the advantage over the gas counterpart will not be as great.
Over time, the math will prove once and for all that the comparison between same models with gas vs. hybrid, and gas vs. diesel, will show that the diesel will achieve a better savings, and cost less at the pump as well.
The further irony of the hybrid will be that it is more effective in saving any significant fuel compared to its gas counterpart, when it is in a smaller lighweight vehicle. The diesels however will have advantages in vehicles in all weight categories.
I didn't hide the number, 3652 lbs. The numbers are close enough to say the 535d is superior to the GS450h. Better mileage, more horsepower and twice as much trunk space.
Looks like the 535d will be debuting a bit too late for me. Since the demand and price will be quite high and the fuel availability, low, for this new model, this is just as well.
My philosophy has always been to deal from strength when obtaining a vehicle. I will let the BMW diesels be "out there" for a while and take another look 2-3 years down the road when I have a better chance at dealing on my terms, when the inventory gets stacked up and diesel fuel is found at most gas stations.
Looks like I just may have to settle for a 2008 MDX Sport with those fabulous variable-adjusting shocks.
So there is a diesel conspiracy about to be perpetrated on the USA by the big bad European auto makers because of tough emission regulations over there? ... but ...
US emissions standards are becoming much stricter too are they not?
Sounds like fiction to me ... perhaps a good plot for a future movie.
Brightness, for an otherwise seemingly intelligent person I am having trouble understanding your bias against diesels and for hybrids.
My perception is that when someone shows an irrational bias for or against anything, there is usually a money trail to follow in order to gain understanding.
The plot is actually quite easy to understand. The European market was almost 50% diesel last year. With the new emission restrictions, that market share is going to decline, leaving the manufacturers with significant diesel overcapcity. That overcapacity has to go somewhere in order to avoid production line shutdowns.
I do not invest in Toyota or any other carmaker, or battery maker, or anything else related to gasoline hybrids, nor do I short any diesel carmaker or diesel, if that's what you meant. To me, the whole industry is just too regulation-dependent to be safe and sound investment. BTW, the heating of my house is diesel . . . a decision made by the previous owner. I'm not planning on staying in this house for very long, so no plan for change yet.
The VW 2.0L TDI will show no advantage over Prius whatsoever. Diesels currently enjoy one advantage: they are vaporware, so advocates can project whatever their dream is onto it (kinda like any "heaven on earth" system before it's tried out in real life). Once the real cars are here, they are bound to disappoint.
"Once the real cars are here, thet are bound to disappoint."
How can you be so sure. I've personally seen, heard, driven, and smelled(cancer free, thanks) the new VW/Audi diesels in Germany. They're exemplary to say the least.
I'm not sure I follow your comment about them having no advantage over the Prius whatsoever. Do mean in terms of mileage? Longevity? Whatever the case, the new diesels are for sure coming and will make a bold imprint on US soil, like it or not.
And I can bet they won't disappoint and boast around about something they're not, like em, the obsolete GS450h, the now obsolete RX400h, and the soon to be obsolete, LS600hL.
You seem to be positioning the Lexus Hybrids as being deceitful, somehow.
Are they not something that Lexus said they were? Have you spoken to "disappointed" Lexus Hybrid owners? :confuse:
If you go to the GS450h forums, for example, reports from 22-30 MPG are common. For a 339HP vehicle, I don't see the source of any "disappointment".
VW's 1.9 diesel has been here, intermittently, for many years, and has been passed, in economy and drivability, by the Prius, for the last 3 years.
Diesels will get some play, but Hybrids are the right move, and by the time Diesels gain traction, Lithium-Ion batteries will keep Hybrids ahead of the curve.
Gee, when we get away from the skirmish line between the Germans and the Japanese fans, things get a lot better, more interesting and more diverse.
A quick review of recent posts indicates a lot of variety, covered fairly deeply: Briteness weighing in on business models, a lot of back and forth on clean vs. dirty diesels (note: if all you mean when you say a "dirty" diesel is diesel particulate matter, that isn't really toxic and is easily cleaned up with "particulate traps"), expensive mid size sedans vs. expensive mid size wagons, hybrids, etc.
Incidentally, before anyone runs out to buy a 5 Series AWD wagon for 67K because you occasionally haul three people with luggage to T F Green Airport, consider a local limo or black car service. For roughly $100 it is convenient, cheaper per person than riding in one of those 18 passenger airport vans that stops at every subdivision, and there are no parking fees.
I agree that obsolescence is taking place rapidly in hybrids technology. Buyers are therefore reluctant sometimes for fear of poor resale (at least those who can think in hard core financial terms like I do :-) instead of being carried away by the green marvels. On the other hand, what does rapid obsolescence mean? The technology is tangibly improving rapidly! It's like the caculators of the 70's, and spreadsheet programs of the 80's. Sure, the early adopters took a big hit financially in a few years as the technologies progressed beyond the first generations. However, how many people are still using abacus/wooden-tallies or paper spreadsheet today??
VW 2.0TDI consumes more fuel than Prius . . . and in terms of reliability and longevity, diesel engine is not the limiting factor in a contraption made by VW. Soot traps are like bandaids, when underlying problem is a big puncture wound. Just because there's a song and dance performed to placate the gods of particulates doesn't mean the problem is solved.
BTW, I agree that taxi ride to airport is much more preferrable to parking cars there . . . as I mentioned earlier in my previous post. Parking a week at Logan can easily cost over $200 . . . and it's a real hassle to wheel and carry all those luggage bags thorough the multi-level parking towers to the curbside check-in, which the taxi driver would have taken care of for you. Frankly, when having a lot of luggage, using taxi is second only to FedEx pickup delivery overnight to destination.
huh? Not sure what you mean. I'm not for diesel heating at all. Diesel heating is not my friend :-) It's also a carcinogen. I haven't got around to change it for my house yet, because it takes a lot of time and effort . . . the location where it is may entail tearing up the garage on top of the utility room to get the diesel unit out . . . and I do not plan on staying in the current house for long.
Don't get nervous. The diesels coming here are low sulfur and much more clean than what used to be. They will help put less money in the pockets of those that hate us through their efficiency. I haven't read anything about any serious health epidemics in Europe where there is a preponderance of diesel engines.
Relax ...Brightness04 ... and inhale the vapor or the roses.
Haven't I heard all of this before somewhere? Super-Doc to the rescue!!!
Doc, c'mon, even you know that trying to find the rare customers that were suckered into buying a GS450h is hard. Not to mention if they like the car or not.
You know that I'm not canning out Lexus hybrid vehicles as deceitful. They're just decidedly useless and pointless.
So to give up half of your cargo room, add a considerably amount of weight to an already weighty platform, get maybe 10-15% better mileage and in the process add needless complexity to the car is the "way Hybrids are on the right move?" Get with it Doc, please.
If this was so good, then why all mainstream automakers, both foreign and domestic(Chrysler, Ford, GM, Honda, Hyundai all are on tap for diesels within 5 years) all going diesels? Honda was smart at abandoning the "performance-hybrid" market and leave it all to the Civic hybrid. Smart move, maybe some should take notice.
Lung cancer rates have been on the rise in Europe. So far the political chattering class has been focusing on smoking . . . but smoking hasn't been on the rise, whereas diesel cars have been.
According to "Winding Road", the first new BMW diesels will be arriving in the USA by December 2008.
My diesel 5 series purchase is confirmed and will be booked. But I will wait for the diesel engine to be put in a future generation 5 series since my wife currently drives the current 5 series touring.
Thanks for the good sales job. You've persuaded me and its a done deal.
Every other maker is also now on the Hybrid bandwagon.
Hyundai is rushing a hybrid to market. Ford isn't going anywhere with the Escape. Cadillac will have a whole fleet of Hybrids in the next 3-4 years. Honda will look to compete with Prius shortly. And Toyota will be 100% Hybrid by 2020. Even mighty Mercedes will sport Hybrid power shortly.
Diesel is fine, but it has been left in the starting blocks, and won't pass Hybrids anytime soon.
Toyota has caught planet Earth flatfooted, and in awe, of what can be done. And it will only get better from here.
Highlander Hybrid has been very popular, a Consumer Reports Top 10 pick, and is being redesigned for the 2008 model. Toyota is very happy with it's performance.
Regarding the "performance-hybrid", the market doesn't see it, and that's fine. Never said it was a cure-all.
I don't look for clouds on sunny days.
Progress is never "useless and pointless". A 270HP, 30MPG luxury car maybe more to the market's liking....
12,549 June 2007 YTD MB S Class Sales 17,572 June 2007 YTD Lexus LS Sales
Approximate Sales price per LS sale 71K Approximate Sales price per MB S Class 97K
*I have used an approximation of actual average US transaction prices provided by my posts with the Wall Street Journal data. As we all know by now there are apparently no great lease deals for both the S Class and the LS. And please dont look at my figures and immediately think that I am assuming that nobody in USA is leasing either and S Class or an LS. The whole point of this exercise is to show that the S Class makes up for its volume shortfalls with their higher prices.
Using the above figures we can compute the approximate revenues from both cars.
Approximate June 07 YTD Total Revenue of LS sales $1.248 billion Approximate June 07 YTD Total Revenue of MB S sales $1.217 billion
So the more expensive and lower volume S Class sales are pathetic compared to the Lexus LS ? :confuse:
Toyota has postponed their lithium ion dates and now the arrival of such batteries from Toyotas/Lexus looks indefinite . So indefinite that GM's future fuel efficiency prospects which is currently spelled as V-O-L-T looks pretty damned good compared to Toyota's prospects.
I dont know why but the more we discuss hybrids and EVs the more excited I am about a manual tranny turbodiesel BMW 535d . I wonder why? :shades:
VW's 1.9 diesel has been here, intermittently, for many years, and has been passed, in economy and drivability, by the Prius, for the last 3 years.
Man, show some up-to-date reading. The 1.9 L engine is to be replaced by a significantly improved 2.0 L with more HP and more torque, as well as better fuel economy.
When similar cars of similar weight start being compared between hybrid and diesel powertrains, you will start to understand, Doc.
One of the most anticipated diesels to come will actually be from Honda... alongside of Mercedes, BMW, and VW. I guess Toyota will have to get theirs from Isuzu perhaps, since they made that strategic purchase of majority shares recently.
Comments
A couple things about price:
(1) asking price is not market clearing price. I can put a $100k price tag on my 6-year Saab tomorrow for sale. . . it doesn't mean the car is worth $100k, or even $50k, or even $25k, or even $15k. Likewise, how dealers would like to decorate their lots to facilitate new car sales has nothing to do with real used car market clearing price.
(2) price does not equal value. Price only reflects supply and demand. I might just be able to auction off the same Saab wagon 10 years from now (16 year old by then) at a charity event for $50k, with something like my signature or a business/stock tip or whatever in the glove box. It may be able to fetch that price because it's a one-off product, and I'm not keen on expanding sales volume. That transaction price does not mean all 16-year old Saab wagons have a value of $50k.
If MB only wants to sell 10 S class in a month, they can ring up a price tag of $200k . . . but, $2mil a month over a production cycle of 5 years, or $120mil toltal revenue is not nearly enough to provide enough engineering funds to work the bugs out for the next S class. That's why MB is bound to introduce S430, S350 and even perhaps a S240D at some point to help amortize R&D. That's what will kill S550 resale . . . that, and people who choose to buy LS460 and save a bundle.
The only clue we have on that question would be the number of people buying GS450h over GS350. They are literally signing up for that, no? I would too if I were looking for a midsize sedan. Midsize cars like the 5 and GS are commute cars. If I need to carry a lot of stuff, I'd get an SUV . . . well, actually I do. I switched from 5 series to a wagon six years ago precisely because midsize sedans are quite hopeless in terms of cargo capacity. When my car need went beyond one-person commute and some grocery shopping (for one person), I switched from the 5 series to the wagon; Saab over bimmer was because I started dating someone in the snowy hills, where the previous 5 series did not do well . . . that and some grevious stock market losses that I suffered in 2000 . . . losing the value of a brand new 5 series in a single day, on several days in spring 2000. So frugality became a new mantra.
Say you need to take 3 to the airport. How amused would your passengers be if you said "sorry you have to hold your luggage on your knees, but I'm saving 2mpg!"
Life must suck for convertible owners :-) Once again, there's SUV's for the times when cargo capacity is needed. The way we travel, there's no way three people's luggage can fit in the trunk of a 5 series. Taxi costs less than airport parking anyway.
As for diesel, lung cancer must be a lot of fun.
I doubt LS sales would drop 20% in the second model year like S class has done. LS has never done that, after so many model cycles. In fact, it would not surprise me at all if LS sales stay more or less level or even increase slightly, because all the cautious would-be buyers in the face of a rather dramatic step forward for LS, which has seen far more radical changes this model cycle than the corresponding S class has.
"Before anyone thinks that there is a free lunch, there is a lot of empirical data showing the impact of new car incentives on used car pricing. The price of a used XC Wagon just went down a lot because of this lease program. "
What that means is that the real market clearing price of CPO cars would have to go down in lock-steps, either through outright price adjustment, or through padding of additional services and service contracts (underwriting insurance); i.e. more liability.
What's really happening here is classic book-cooking. We went through BMW annual report here a couple months ago. If one has the patience to dig through the first 60 or so pages of the report, it's quite clear that the company is booking profit by turning cash into "leased car inventories." An inventory value that will have to be written down someday as the residual is way out of wack with real auction value. It's no different from other types of aggressive vendor financing that we have seen in the past decades: e.g. Lucent vendor financing to worthless telecom startups in the late 90's . . . and most recently, all the worthless mortgage papers. The trick is short term booked profit based on predicate future cash inflow (be it residual or expected mortgage payment) without properly accounting for the risk associated with such future cash inflow. Assigning a grossly inflated residual is worse than grossly over-estimating the foreclosure sale value of a house: people turning cars in at lease end don't need to seek bankruptcy protection . . . it's an legitimate exercise of a put option underwritten by the banker/manufacturer.
1. Seems like all cars are dropping in transaction price . . incluidng the top-ranked CRV and Fit. Is that because of equipment level difference? or perhaps even model year aging?
2. average APR 10+%?! Are people nuts? How low is their credit worthiness anyway?
All of the Germans do, Cadillac has its "V" cars, Jag has its "R" cars, and Lexus will soon have the "F" cars. I'm sure Infiniti will feel the pressure and create something eventually, especially considering that the G and M are already much better suited to handle 400hp+ than the IS and GS.
The Skyline GT-R has never been anything close to a luxury car, which is why I think Nissan ultimately decided to go the way they did with the badge. I think it will be more like a mega-Elise than a R8 or 911, but I could be wrong. Calling it a Nissan does leave the door open to create a more luxurious Infiniti version of the car, as with the Z/G35 coupe.
June '07 combined sales of the 430 and 450h were just 141, down 68% compared to June '06 and down 51% YTD v. 2006. They don't release individual numbers for the 450h alone, but assuming half buy the 430 and half buy the 450h, about 3.7% of GS buyers are signing up to have their trunks chopped in half.
Life must suck for convertible owners
As for diesel, lung cancer must be a lot of fun.
Actually, I've got a decent 10cu.ft in my XK convertible, so my life is pretty good. Midsize sedans are supposed to be at least somewhat practical, but the 450h's trunk is so small that it's stupid. A days shopping for my wife and I at Zabar's and ABC would not fit in that, and if we took friends with us we'd have to strap them on to the roof. Why buy something as boring as a midsize sedan if that's all the trunk space you need? Why not buy something like a S4 Cabrio instead?
That must be how "clean" diesel works, they route the NOx back into the cabin so it doesn't get out into the atmosphere.
If the GS would be my only car, then the 350 or the up coming 460 would be my choice. TM knows this as well, so they are not making a ton of these GSs, or otherwise we should see big discounts on them by now.
A days shopping for my wife and I at Zabar's and ABC would not fit in that, and if we took friends with us we'd have to strap them on to the roof.
Take you SUV if you guys knew that shopping is on the card. The automatic rear hatch would be very handy when you are carrying that many bags in your hands.
Come on, if 10cu.ft is "decent," what difference would two less make? Isn't that a little like kettle calling the pot? Why not buy something like S4 Cabrio? Perhaps the person wants a real roof in parts of the country that snows and rains a lot? Perhaps he needs four doors? I'm trasitioning my garage to SUV/wagon and convertibles only myself, in fact I have not had a midsize sedan or any sedan among my cars for half a decade . . . for my own purpose, sedans are stupid, for a couple thousand bucks more wagons (SUV's are wagons) can provide double the cargo space and more . . . but I'm not about to second-guess other people who buy midsize sedans.
Sure "clean diesel" . . . just because the phrase exists, there must be a real product. I will have more faith in "flying pigs," or at least "hybrids with small batteries." If you want to decry performance hybrids because current technology involves a big battery, well, current technology make diesel dirty. And for the forseeable future, "clean diesel" is a relative term compared to really dirty diesels, not to normal gasoline cars. Compared to the normal gasoline cars, even the "clean diesels" will still be dirty.
People are just not that stupid. The GS450h happens to be a sedan, with two-seater sports car trunk room; only 7.5 cu ft; half the size of a normal trunk. You have down played the amount of the GS450h trunk space in a previous post, but for most people the amount of trunk space is significant.
The mpg of the GS450h is mediocre for a hybrid. 25-28mpg estimated is pretty bad for a hybrid.
The GS450 is not a weekend toy car. Most people would be using it every day as their daily driver. It happens to be too impractical for that.
Just as I predicted here a while back that Hyundai is the company to watch, I have another prediction:
The GS450h will become O B S O L E T E just like the Accord hybrid and will be withdrawn within the next two years.
Modern clean-burning low sulfur diesel engine technology is an unstoppable force which will finally put the absurd hybrid technology to bed and will be the first major significant answer to not delivering our money into our enemies' pockets.
I believe Lexus will produce another GS Hybrid when it is redeesigned. And it would need to get 30% better fuel at a minimum.
Lithium-Ion batteries will probably be used next time, and maybe even can be stored under the rear seat, like the Highlander Hybrid, since cargo space in a sedan is so precious.
The GS Hybrid concept just needs some fine-tuning, that's all. Lexus didn't save the world on this one. And that's ok. Just gettin' warmed up.
DrFill
The first model arriving here will be the 535d!!
The 535d will be making an appearance at the LA Auto Show in November.
Brightness is correct on this point. BMW breaks down their sales performance in great detail:
BMW June 2007 sales
A pretty big difference actually. One set of golf clubs or two, a big suitcase or not, etc. 7.5cu.ft is really small. I like the LS because its extremely comfortable for four (five is generally doable without complaints), and there's also plenty of room in the trunk, should I need it for anything. The X3 is a great commute car for my wife, but its a bit cramped in back, and she doesn't need\want something enormous like a Q7.
3652 lbs. isn't really that close to two tons. The GS450h is actually over two tons (so, close to two tons from the other side) to the tune of 134 lbs., making it a tubby 482 lbs. heavier than the 535d.
In fact, the GS350 is 52 lbs. HEAVIER than the 535d! Explain to me this "great" hybrid system again
http://www.europeancleaningjournal.com/index.php?option=com_content&task=view&id=280&Itemid=61
Now we know why the big european carmerks are pushing diesels in the US . . . because their diesel cars are being banned and taxed by recent emission regulations in Europe.
Greater margin of safety in crashes, without gas penalty day in and day out.
No bank had been appointed to handle the transaction, the newspaper said, adding the deal could be worth $8 billion.
Messages seeking comment on the report were left Sunday with Ford spokesmen.
Ford acquired Volvo from Sweden's Volvo AB in 1999 for $6.45 billion."
At least Ford can be happy that they didn't vaporize $38B with Volvo.
In the case of many hybrids, the advantage over the gas counterpart will not be as great.
Over time, the math will prove once and for all that the comparison between same models with gas vs. hybrid, and gas vs. diesel, will show that the diesel will achieve a better savings, and cost less at the pump as well.
The further irony of the hybrid will be that it is more effective in saving any significant fuel compared to its gas counterpart, when it is in a smaller lighweight vehicle. The diesels however will have advantages in vehicles in all weight categories.
TagMan
I didn't hide the number, 3652 lbs. The numbers are close enough to say the 535d is superior to the GS450h. Better mileage, more horsepower and twice as much trunk space.
Looks like the 535d will be debuting a bit too late for me. Since the demand and price will be quite high and the fuel availability, low, for this new model, this is just as well.
My philosophy has always been to deal from strength when obtaining a vehicle. I will let the BMW diesels be "out there" for a while and take another look 2-3 years down the road when I have a better chance at dealing on my terms, when the inventory gets stacked up and diesel fuel is found at most gas stations.
Looks like I just may have to settle for a 2008 MDX Sport with those fabulous variable-adjusting shocks.
US emissions standards are becoming much stricter too are they not?
Sounds like fiction to me ... perhaps a good plot for a future movie.
My perception is that when someone shows an irrational bias for or against anything, there is usually a money trail to follow in order to gain understanding.
2013 LX 570 2016 LS 460
How can you be so sure. I've personally seen, heard, driven, and smelled(cancer free, thanks) the new VW/Audi diesels in Germany. They're exemplary to say the least.
I'm not sure I follow your comment about them having no advantage over the Prius whatsoever. Do mean in terms of mileage? Longevity? Whatever the case, the new diesels are for sure coming and will make a bold imprint on US soil, like it or not.
And I can bet they won't disappoint and boast around about something they're not, like em, the obsolete GS450h, the now obsolete RX400h, and the soon to be obsolete, LS600hL.
Are they not something that Lexus said they were? Have you spoken to "disappointed" Lexus Hybrid owners? :confuse:
If you go to the GS450h forums, for example, reports from 22-30 MPG are common. For a 339HP vehicle, I don't see the source of any "disappointment".
VW's 1.9 diesel has been here, intermittently, for many years, and has been passed, in economy and drivability, by the Prius, for the last 3 years.
Diesels will get some play, but Hybrids are the right move, and by the time Diesels gain traction, Lithium-Ion batteries will keep Hybrids ahead of the curve.
DrFill
A quick review of recent posts indicates a lot of variety, covered fairly deeply: Briteness weighing in on business models, a lot of back and forth on clean vs. dirty diesels (note: if all you mean when you say a "dirty" diesel is diesel particulate matter, that isn't really toxic and is easily cleaned up with "particulate traps"), expensive mid size sedans vs. expensive mid size wagons, hybrids, etc.
Incidentally, before anyone runs out to buy a 5 Series AWD wagon for 67K because you occasionally haul three people with luggage to T F Green Airport, consider a local limo or black car service. For roughly $100 it is convenient, cheaper per person than riding in one of those 18 passenger airport vans that stops at every subdivision, and there are no parking fees.
Holy exploding sunroofs!! :surprise:
VW 2.0TDI consumes more fuel than Prius . . . and in terms of reliability and longevity, diesel engine is not the limiting factor in a contraption made by VW. Soot traps are like bandaids, when underlying problem is a big puncture wound. Just because there's a song and dance performed to placate the gods of particulates doesn't mean the problem is solved.
BTW, I agree that taxi ride to airport is much more preferrable to parking cars there . . . as I mentioned earlier in my previous post. Parking a week at Logan can easily cost over $200 . . . and it's a real hassle to wheel and carry all those luggage bags thorough the multi-level parking towers to the curbside check-in, which the taxi driver would have taken care of for you. Frankly, when having a lot of luggage, using taxi is second only to FedEx pickup delivery overnight to destination.
Haven't I heard this somewhere before? It usually goes...
"Why, some of my best friends are ..." :P
So happy some of the posts have been so much more diverse and more to your liking.
Didn't realize we had a critic here giving us a review!
I will look for it in the Block Island Times.
Relax ...Brightness04 ... and inhale the vapor or the roses.
COUGH! COUGH!
Doc, c'mon, even you know that trying to find the rare customers that were suckered into buying a GS450h is hard. Not to mention if they like the car or not.
You know that I'm not canning out Lexus hybrid vehicles as deceitful. They're just decidedly useless and pointless.
So to give up half of your cargo room, add a considerably amount of weight to an already weighty platform, get maybe 10-15% better mileage and in the process add needless complexity to the car is the "way Hybrids are on the right move?" Get with it Doc, please.
If this was so good, then why all mainstream automakers, both foreign and domestic(Chrysler, Ford, GM, Honda, Hyundai all are on tap for diesels within 5 years) all going diesels? Honda was smart at abandoning the "performance-hybrid" market and leave it all to the Civic hybrid. Smart move, maybe some should take notice.
Year 1 June YTD 2006 S Class sales increased over 100 percent.
Year 2 June YTD 2007 S Class sales decreased by 20 percent.
If anybody considers the overall two year results above as pathetic then in that case it is a waste of my time to discuss S Class sales any further.
My diesel 5 series purchase is confirmed and will be booked. But I will wait for the diesel engine to be put in a future generation 5 series since my wife currently drives the current 5 series touring.
Thanks for the good sales job. You've persuaded me and its a done deal.
Hyundai is rushing a hybrid to market. Ford isn't going anywhere with the Escape. Cadillac will have a whole fleet of Hybrids in the next 3-4 years. Honda will look to compete with Prius shortly. And Toyota will be 100% Hybrid by 2020. Even mighty Mercedes will sport Hybrid power shortly.
Diesel is fine, but it has been left in the starting blocks, and won't pass Hybrids anytime soon.
Toyota has caught planet Earth flatfooted, and in awe, of what can be done. And it will only get better from here.
Highlander Hybrid has been very popular, a Consumer Reports Top 10 pick, and is being redesigned for the 2008 model. Toyota is very happy with it's performance.
Regarding the "performance-hybrid", the market doesn't see it, and that's fine. Never said it was a cure-all.
I don't look for clouds on sunny days.
Progress is never "useless and pointless". A 270HP, 30MPG luxury car maybe more to the market's liking....
The Pursuit continues......
DrFill
17,572 June 2007 YTD Lexus LS Sales
Approximate Sales price per LS sale 71K
Approximate Sales price per MB S Class 97K
*I have used an approximation of actual average US transaction prices provided by my posts with the Wall Street Journal data. As we all know by now there are apparently no great lease deals for both the S Class and the LS. And please dont look at my figures and immediately think that I am assuming that nobody in USA is leasing either and S Class or an LS. The whole point of this exercise is to show that the S Class makes up for its volume shortfalls with their higher prices.
Using the above figures we can compute the approximate revenues from both cars.
Approximate June 07 YTD Total Revenue of LS sales $1.248 billion
Approximate June 07 YTD Total Revenue of MB S sales $1.217 billion
So the more expensive and lower volume S Class sales are pathetic compared to the Lexus LS ? :confuse:
What a load of BUNK :mad:
and the delays and postponements continues too.
Toyota has postponed their lithium ion dates and now the arrival of such batteries from Toyotas/Lexus looks indefinite . So indefinite that GM's future fuel efficiency prospects which is currently spelled as V-O-L-T looks pretty damned good compared to Toyota's prospects.
I dont know why but the more we discuss hybrids and EVs the more excited I am about a manual tranny turbodiesel BMW 535d . I wonder why? :shades:
Since NO ONE is using Lithium-Ion yet, it's hard to call Toyota out on not using new technology fast enough, don't you think that's a bit of a reach?
I predict that one, maybe two, other makers will go to Lithium before Toyota! What do you think about that? :surprise:
DrFill
Man, show some up-to-date reading. The 1.9 L engine is to be replaced by a significantly improved 2.0 L with more HP and more torque, as well as better fuel economy.
When similar cars of similar weight start being compared between hybrid and diesel powertrains, you will start to understand, Doc.
One of the most anticipated diesels to come will actually be from Honda... alongside of Mercedes, BMW, and VW. I guess Toyota will have to get theirs from Isuzu perhaps, since they made that strategic purchase of majority shares recently.
TagMan