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Comments
BMW is working hard to give us consumers good deals. Tag's sentiment is spot-on: where do I sign? ;-) Too bad I don't have time to go to Europe right now for Euro Delivery.
Looks like we are heading for another stock market melt downs. Get your cash ready for the bottoms (or start shorting, buying puts for those that are brave).
You mentioned the 335i convertible. I hope you're not expecting a deal on that. The 3-series convertible always sold at a premium and now that it's a new model, forget it.
Depends on what you call competitive. I don't think the R8 will be priced competitively. They say it might start at $110K and it is said that there is a two or three year waiting list. That isn't competitive IMO. The Z06 at $65... that's competitive, but not to those who want Euro. The German cars will be up there in price and I think the best deal you will get will come as a result of cars being overproduced and not moving. This means you might get an extra $5K off a 911.
Now the GTR. They say they're going for the Nurburgring record and the car is already a legend. That should be priced similarly the Z06 Vette. But I wouldn't count on the Germans being competitive. Whatever comes from them will have lofty price tags. We've seen nothing but high prices over the years and people keep paying them. The German bargains are cars more like the Boxster and Z4, but the people who spend money on highway sports cruising garage queens still want to pay double for the panache and glory of the high-ticket items.
The LF-A? I don't think there will be much of a demand unless it proves its performance mettle. It's got its work cut out there. People who spend more than 100 grand on sports cars are looking for more than bargains.
You have a 911, right? would you have bought a z06, euro factor aside?
My wife actually gave me a very interesting idea. She told me to rent one of these vehicles for a month each summer and enjoy them without paying for the whole thing. Remember, this would be my leisure vehicle anyway.
As a 911 owner and admirer, I want to make the point that the 911 is an icon, and has been one for a very long time. This is not to say that it is untouchable. Heck, for that matter, some buyers that would have purchased a 911, purchased the Cayman instead, and not just because of the money. While the Cayman is still a Porsche, and that is an extremely important factor not to be overlooked, it demonstrates some degree of vulnerability, IMO. But the 911 is the "one" to beat. It's the icon.
The Audi R8 will only come in a small metered dose initially, with limited dealer involvement. It's definately a winner, IMO, but the impact on the 911 will be limited... at least initially. This car has does have "THREAT" written all over it, in capital letters, IMO.
Here's some additional perspective on that: link title
What BMW will do upstream is not clear to me, but if we look at history, the Z series obviously has shown us that Porsche can be vulnerable, as the Boxster sales must have been impacted by the BMW Z series.
Infinity, well, it may be Nissan that gets the GT-R, and what about Infinity? Yes, what about them? And I am not a believer that Nissan can be a genuine threat, although I expect some will disagree.
Lexus, on the other hand, as always can be a serious threat. Even sports car die-hards can appreciate reliability... but in this category, the car must perform, and Lexus hasn't shown us anything that can do that yet. If the new concept that was shown at the auto show becomes a reality, and if it has the well-engineered guts to go along with that incredible body style, then I'd say the gloves are definately off, and we can welcome Lexus into a new category.
I haven't seen anyone mention Honda/Acura, unless I missed it, but the next NSX is a wild card, IMO. I have a bad feeling about this car, though, that if it's even remotely like the bits and pieces that have leaked out so far, I think it's doomed. But, it's still too early to know anything with certainty here with regards to the next NSX. And given Honda/Acura's poor marketing when it comes to sports cars, it's doubtful the next NSX will matter much.
The 911 itself is slated for a major update within the next few years. If this next 911 isn't the homerun that I expect it will be, then its vulnerability could come at the perfect time for the competitors.
On a side note, Porsche will need to make sure that the final production version of the Panamera is not a diluted luke-warm vehicle. And it had better not give too much the impression of a Cayenne or other model Porsche that's been melted into a sedan by some clever computer-design software. The Panamera must have legs of its own... and deliver serious chart-topping performance in its class, if it expects to have any chance of being successful, IMO.
Topple the 911? I guess I would have to sum up by saying that, IMO, Porsche's very own "next 911" will have more impact on that than the competition itself.
TagMan
So, if BMW Finance pumps them up a couple of points, it won't really hurt them.
True, some lease companies have taken a beating on residual, but BMW seems to be in a pretty good position.
BMW has a very dtrong brand position, stronger than anyone except maybe Porsche.
The only way their sales would drop is if they suddenly built undesireable cars(people are even buying the Bangleized cars) or if the underlying economy suffered a recession in which case BMW's woes would be the least of everyone's problems.
They don't benchmark off ANY finance co.
If they did, then Volvo's residuals would be just as high!
What about opening the door manually? Have you tried that??
BMW in the next two years are launching new products:
1. E72 X6
2. F05/F03 Minivan-type product to rival the R- Class
3. Z8/Z10
4. Z2
5. Baby Rolls Royce
6. 8er/9er are being considered.
These product onslaught indicates a healthy state of affairs in the company.
New models can often be a good thing, but as I look over that particular list, I can't help but wonder how many of those new models might ever sell in any significant volume. I mean an "R" competitor? Baby RR? How many folks will really want 'em?
TagMan
Heck, Mercedes hasn't even barely launched the BlueTech yet, and they are planning on ditching it already?
This is all too bizarre. Here's the link:
http://benzinsider.com/2007/03/all-future-mercedes-models-to-get-hybrid-option/
TagMan
TagMan
I don't think anyone has demonstrated that. I think what has been said and what can be agreed upon is that consumer demand is high, that BMW can recycle many of the off-lease returns into high margin CPOs (Bimmer charges $1200 for the paperwork, the dealer throws in what little maintenance that wasn't done by the owner under the "free maintenance" deals, and the dealer can add roughly $3500 to the "retail" for a CPO), and everything is swell. BUT, if just a small percentage of people stop buying BMWs as "fashion statements" (see post 300), or is unable to afford them, or simply has passed thru the demographic that is the Bimmer buyer, then bad things could happen in BMW land.
One doesn't have to forecast a meltdown in the economy to say that there could be a slight shift among consumers toward saving instead of spending money and that the aging boomers may have other priorities than buying a Bimmer as they did in their 40's. (I think that a thoughtful boomer might choose the maintenance free MB Bluetec to buy and ride out retirement in. Or the the less status conscious retiring boomer would buy one of Volvomax's products to ride safely off into the sunset.) In any case, I sure wouldn't want to be a BMW dealer who now in mid 2007 was being strongarmed into putting his entire net worth back into the game by building a new BMW faciliity.
Speaking of new dealer facilities, as a business person who is very much aware of overhead costs, I'm amazed at the size, number, and all glass mode of construction of many many new dealerships. Here in New England where we have two seasons, cold and hot, I marvel at what the heating/cooling costs must be for these gleaming glass structures with huge entrance foyers and atriums. (Much like a McMansion.) I love the faux quonset huts that the Hummer dealerships had to build. I think you will be able pick up a Hummer quonset hut cheaply in a year or two. They would make marvelous buildings for industrial distributors, what few Harley dealerships and lawnmower dealers will be left, landscape material suppliers, boat dealers, etc.
I agree and think both of them are milking it for everyting it's worth.
If that was true BMW would be making way - and I mean way - more money incrementally then they are making on their base. They are not and in fact they are making substantially less and more often than not nothing at all. They need to sell 8-10% more cars each year just to earn what they did year. The financials show that BMW is flat for 5 years and it's year to year flat not flat at each end with spikes in the middle. That means they are making nothing on the added volume sales. Nothing speaks louder than money and the money says very clearly that BMW is hurt on residuals. That doesn't mean they are in trouble. It means they are growing volume without growing profit and that seems to be what their lease program is designed to do. It's clear as day to me, if it's not to others so be it. Again there is nothing wrong with a market share strategy and it could well be part of a bigger broader strategy that none of us can see.
But to be logical just think about it - why would you charge less depreciation in a lease than the market charges. Put another way if you were a retailer why would you have a 40% sale when the market has a 30% sale. There are only two answers, the first is you have to do that to move inventory (I certainly don't think this is the case with BMW) and the second is that it's a designed program to grow share.
Increasing residual values, which is the equal of depreciating a car less is a charge less, price dump, keep the risk with the seller model. How many businesses are willing to accomodate you that way? The guy that uses the greatest lease depreciation is the guy that is actually charging the most. It's simple math.
Maybe there has been a huge breakthrough in battery technology that has yet to be announced? Bizarre.
2013 LX 570 2016 LS 460
Now that MB seems to have found a way to catch up on hybrids, the charade can be torn down.
Third party banks lost hundreds of millions of dollars using ALG numbers back in the late 1990's. They have stopped using ALG numbers altogether. The captive financing arms of the carmakers still use and license ALG numbers, for a very good reason :-) It's a symbiotic relationship just like magazine review of new cars and carmakers. We hardly ever hear any faults with new models; yet when the next model is introduced, the last one suddenly becomes riddled with faults. ALG numbers are designed to help manufacturers to push new car sales, just like magazine reviews are.
I like the 335i, but I suspect it might just be a flop: the car looks like a coupe with top up, not exactly the cup of tea for extroverts, which account for the majority of convertible purchases. I like it only because the wife wants a convertible since she never had one in long-term owner/driver-ship, and I think she will hate a real convertible after a couple months. It's just a matter of throwing away extra $10k (compared to a coupe) to satisfy her curiosity; well, actually $3k or so in a two-year lease.
IMHO, I will be able to get one for less than $550/mo in a year or so.
From the little bit of info that's been leaking out, the whole darned thing is a mistake. It's all wrong from front to back.
The original NSX was as you desribe. I agree. But that car is history. It's all over. The next one isn't following in any footsteps at all. It's the one that will count, and so far, it sounds like it's going to be all messed up... more like something that might compete with a Viper or Corvette than a 911. I know it is very early here on this model, but I've got a bad feeling about it.
TagMan
Yessirree Bob... something strange about it. Almost unbelievable. I agree.
TagMan
Heck no... there's no catch up at all... the even more bizarre part of this is that MB doesn't have performance-enhancing hybrids. They have "mild hybrids" in the works, along with BMW. These are only partial assist hybrids, sort of like the IMA (integrated motor assist) approach that Honda has taken. No performance, just fuel savings.
I just can't believe that Mercedes would do an about face like this, and change its direction from BlueTech to a hybrid... and a mild hybrid at that. I'm in shock.
It can't be true. My guts are telling me it's just not true.
TagMan
Better get out of this guy's way!!!
It might be slow, but it's got one helluva passing gear!!!
TagMan
Whether the electric motors are allowed to move the car while the ICE is dormant, that's simply a matter of programming. Personlly I'd prefer a car that can, simply because I have a small garage and a 10-car drive way that entails moving cars a few yards to allow snow ploughing. That kind of operation in winter really kills the ICE.
Do you consider the Prius performance? The Camry hybrid is also focused on saving gas, not performance. Both very successful in terms of sales and demand. The Accord hybrid focused on performance and was a flop.
There may be a niche market who wants hybrid for performance but it would be (Honda discovered) microscopic. When you can get all the 250+ hp sedans you could desire, why spring the extra for a hybrid?
Ferrari 360 Spider - $4,999/wk 700 free KM, Insurance - $99.00 per day unless stated otherwise
Security Deposit of $7500 is required.
Aston Martin Vantage - $3,999/wk 700 free KM, Insurance - $99.00 per day unless stated otherwise
Security Deposit of $7500 is required.
Porsche GT2 - $2,799/wk 700 free KM, Insurance - $99.00 per day unless stated otherwise
Security Deposit of $7500 is required.
Porsche 911 GT3 - $1,799/wk 700 free KM, Insurance - $99.00 per day unless stated otherwise
Security Deposit of $5000 is required.
Corvette C6 Convertible - $1,399/wk 700 free KM, Insurance - $99.00 per day unless stated otherwise
Security Deposit of $5000 is required.
All these are in CAD. They have daily and weekend rates as well. Do you think this maybe worth while?
What really sells hybrid in the luxury market segment is something like the GS450. If people have no desire for power beyond 250hp, why should there be any V8 luxury car at all?? Power is what sells. Hybrid as a technology delivers power instantaneously on demand.
"Hybrid for fue efficiency" was a very clever bit of marketting for the time when the technology was relatively immature and the motors were too small to deliver enough power to make much of a difference in performance. When the ciruits are tested out for reliabilty in real life use, the electric motors will get bigger, and bigger, as we know, sells :-)
I argued a long time ago on the Hybrid forum and other forums about the performance being a major advantage of hybrid, not just fuel economy.
BTW, do you remember the Audi R10 TDI that won LeMans? I hate to break it to you, but it wasn't a hybrid. So, to be fair, the diesel technology has advantages as well, especially the latest BlueTech.
As the original article stated that I posted here... We may be at the point where Toyota has already influenced the perspectives of enough consumers. If this is true, then it doesn't matter whether or not the hybrid is better or worse than a diesel. That's an argument that I'm not going to have with you. They both have advantages that can be argued. You can have that argument with someone else... not with me.
I've posted about the merits of both technologies on different forums, and I know that they are both improving technologies that offer certain advantages compared to the standard gas ICE that has ruled for generations. I argued countless posts in support of hybrid, and I explained at length that the performance was the real advantage, not just fuel savings. So, I don't need any lecture about this from you at this late date.
It's about the consumers' perception and what the consumers will buy. Remember, advertising and marketing is my degree. I know all about situations like this. Originally, I posted lengthy arguments in favor of hybrid vehicles a long ways back, and I had long discussions that predicted the liklihood of the hybrid being the "accepted" alternative as the technology and familiarity gained traction.
The biggest single thing that contributed to this is that a number of years ago the head of Toyota announced and pledged that every single vehicle that Toyota would build would have a hybrid version available within ten years (of the announcement). I will never forget that announcement. And I have seen no evidence to suggest that Toyota is breaking that pledge. They are a huge marketing machine. That single pledge will ultimately end up having changed the automotive landscape forever.
I still believe that the diesel alliance will continue for a while, as it has barely gotten out of the gate. 2008 MY has been the target date for BlueTech in all 50 states. Without adequate marketing, I see little hope for BlueTech, and the marketing may be limited and short-lived, especially considering the possibility that corporate resources are becoming more focused on hybrids.
If you believe that this latest generation of batteries are an improvement, just wait until the nano technology batteries become mainstream. Those batteries could change everything... they are nothing short of amazing.
TagMan
Rent: Rental+insurance = 2385
$ per Km = 3.41
Lease: Annual payment = 17800, insurance =6000
Total annual fixed costs = 24000
Need to drive min of 7000 Km/yr to achieve the rental's $3.41/Km
Le Mans is an endurance race, so not having to stop and take on fuel as frequently is a huge advantage.
IMHO, there's more than consumer perception going on here. Hybids allow for a transition path towards fuel cell as power source, displacing ICE altogether. Meanwhile, the electric system allows much better integration of other electric/electronic subsystems. As we know, carmakers' profit comes from selling really over-priced leather recliners (with heating and cooling), stereo, A/C etc., etc. Whereas with diesel, there is no path to fuel cell, and because it's compression ignition there's very little electricity needed or produced in the drive train.
Banks DO use ALG's numbers.
Sometimes they even go above them, if they really want some business.
Of course there is. There are the actual technologies themselves, and then there are the perceptions of them. The article was making a point that consumers' perceptions of hybrids appears more favorable than their perceptions of diesels, as we look ahead.
We can easily look to the contrast between Europe and the U.S. where we can see that the public's perceptions make a huge difference in what comes to market and what sells and doesn't sell.
Again, I'm not interested in arguing the actual technical differences between the technologies. I am already aware of them. I was only discussing the article that suggested consumers' perceptions of hybrids are perhaps more favorable than their perceptions of diesel... in our market... and thus the re-focus on hybrid production by the auto manufacturers, in order to appeal to the consumers' preference.
TagMan
If the story is accurate, it doesn't really say that MB is "giving up" on diesel. It reads more like a change in emphasis and resource allocation. And when we finally see hybrids from MB, maybe they'll be diesel-hybrid, not gas-hybrid. Who knows?
I found it interesting that even though they're talking 2009/2010, they're still looking at "mild" hybrid. They seem to be further behind technologically in this area than I would have thought.
Also, keep in mind that BMW's advertised leases include a fair amount of cash down, plus the fees.
Or... granting themselves the ability to use the word "hybrid" which will for the most part satisfy the consumer appeal... while all the while still offering BlueTech diesels.
TagMan
I wonder how the BMW dealer's P & L looks? (I think I could live nicely on simply the utility costs a Bimmer dealer pays for his all glass-store. ) BMW dealer P & L compared to a MB dealer? You can't compare either of them with a Lexus dealer because the Lexus dealer has a huge AOR.
There's nothing magical about BMW advertised leases. They are derived from residual and money factor numbers, which are readily available on the internet. What BMW advertises on its website still leaves substantial profit for the dealers.