High End Luxury Cars

syswei · January 2006

It is fairly well known that a number of mostly-Hollywood celebrities own Prius hybrids. I think of it as basically an environmental "statement". Here's one list: article. There are a couple of notable "business celebrities" that drive Prius too: article

Whether an LS600h will have the same "statement" quality when it comes to environmentalism is dubious, though, since the mpg will still be worse than some compact/subcompact ICE cars.

michael_mattox · January 2006

Tagman:

My LS is an 01 The new LS has all the features you mentioned and much more. I am talking only about the LUXURY Marques...S..LS..7

STYLING...I have long thought the Mercedes was tops in that area..However in recent months I have grown Tired of their look...I think it is a mistake for them to have the same look on their cheap cars as they do on the S Class. I am very comfortable with the much more conservative styling of the LS, I truly don't want or need a flashy car, Not a standout on the Beautiful or Ugly side is just right for me.

Driving Characteristics A very nice short Turning radius of 37 Ft. Plenty of power, and good handling is what LS offers...It does not offer the BMW Driving experience but then how often would most of us use the full extent of the BMW Capabilities...I would rather not trade the Nice comfortable Quiet ride of an LS for the 7s handling, which I would never fully use anyway. I know that LS currently matches or betters the Acceleration of The S and 7 even with less horses, I suspect that is also true of braking, and am not sure about Slalom but I doubt there is much difference especially with the shorter turning capabilities of the LS.

Reliability..An area that most German Car Guys don't usually add to their Preferences...But I do.

It is a small thing but in 5 years I have never had to change a light bulb of any kind inside or outside. the only repairs I have needed were paid by Lexus...An Amp and an outside mirror that would sometimes stick when opening or closing.

tagman · January 2006

STYLING...I have long thought the Mercedes was tops in that area..However in recent months I have grown Tired of their look...I think it is a mistake for them to have the same look on their cheap cars as they do on the S Class.

I don't personally like cookie cutter cars in different sizes. But, it would appear that quite the opposite is developing. If anything, the new S-Class's styling has somewhat distanced itself from the other Mercedes models . . . but, on the other hand, the Lexus lineup looks more and more similar all the time.

I am very comfortable with the much more conservative styling of the LS, I truly don't want or need a flashy car, Not a standout on the Beautiful or Ugly side is just right for me.

Well, I agree that the LS is NOT a beautiful standout and NOT ugly either. The word "conservative" is the word that Lexus fans almost always seem to use for the styling, instead of "boring" or "plain". It sounds better, I guess.

I would rather not trade the Nice comfortable Quiet ride of an LS for the 7s handling

The BMW comparison doesn't negate the fact that the new S-Class also has an incredibly nice and quiet ride.

Reliability..An area that most German Car Guys don't usually add to their Preferences...But I do.

Mercedes has a long history of reliability. Statistically, in recent years, it has dipped slightly, but the truth is that NO ONE has the reliability of a Toyota/Lexus. So does that mean that Lexus becomes the only car to consider? Or that if someone chooses any other car, they suddenly don't care about reliability? That's an absurd argument always thrown at the German car fans and owners, as if to imply that they don't give a hoot about reliability because they didn't buy a Lexus. That, my friend, is a bunch of . . . well, you know.

TagMan

oac · January 2006

It is a small thing but in 5 years I have never had to change a light bulb of any kind inside or outside. the only repairs I have needed were paid by Lexus...An Amp and an outside mirror that would sometimes stick when opening or closing.

My '99 LS has 110K miles. Besides the normal maintainance services (last was at 90K miles), normal wear n tear items (brake pads, oil changes & tires), the only issue was a sticking mirror fixed at Lexus expense. That is 7 years (Nov 13, 1998 start date), 110,000 miles later. The car drives like new. The leather seats are unblemished, no rips, no tears, no rattles, no squeaks, none whatsoever.... The sound proof is outstanding, even when my music is loud (as my teenagers often do turn up the volume), the engine is still silent as ever. Just an incredible car all around. As to styling: it is solid, graceful and timeless.... I fully expect my '03 LX470 to be equally outstanding in reliability. So far so good.... That is why I keep going back to Lexus products, and why I am in line for an LS460 SWB model. I put my money where my mouth is.

lexusguy · January 2006

I think its a question of priorities. For my daily driver, every day reliability is a top priority. iDrive on the fritz causing the car not to start is simply unacceptable, thats why I drive an LS to work every day. When it comes to my weekend car, reliability isnt nearly as important. I'm not willing to buy the boring, tub-like SC430 just because its more reliable than any other luxury convertible.

tagman · January 2006

By chance, did you ever see the pics of the new S-Class in its S 65 AMG derivative on the HEELS forum that merc1 posted back on December 28th? . . . post number 420. I thought those pics looked impressive. Even you may like them.

TagMan

tagman · January 2006

I think its a question of priorities. For my daily driver, every day reliability is a top priority. iDrive on the fritz causing the car not to start is simply unacceptable, thats why I drive an LS to work every day. When it comes to my weekend car, reliability isnt nearly as important. I'm not willing to buy the boring, tub-like SC430 just because its more reliable than any other luxury convertible.

C,mon now, it's not as though the entire "non-Lexus" world spends all its time in the shop facing vehicle nightmares, and ONLY the Lexus folks are happy with their car's reliability.

In fact, the "non-Lexus" world might suggest that the "daily" driver should be a fullfilling experience, given that it's driven so often. Why save the fun just for the weekend?

oac · January 2006

You mean this car ?

Awesome look ! Now if all S-class looks like that, the LS would not hold a candle to the S-sedans, IMO....

garyh1 · January 2006

And again what does anyone care about this? We know this, we've been known this for years and years when it comes to Toyota and their production costs, skills etc., but what difference does it make to anyone who doesn't live for pointing it out day in and day out? ... This is nothing but the old buyers-care-about-profits type stuff which is irrelevant.

Let me try this one more time. Here is the line from Len that started you off on this tirade:

But if you have a lower cost to build you use that to your advantage on pricing and they continue to have a huge edge on the Germans in build cost.

Len said absolutely nothing about people buying cars because of fascination with Toyota's profits. We are talking (really speculating at this point) about how the new LSes will be priced as against the Ses and the 7s (and the A8s for that matter). The point is that if Company A can build a car for $50,000 that can compete in the marketplace against another car from Company B that costs B $60,000 to make, Company A can potentially charge anywhere up to $10,000 less than Company B and still stay in business. If A can sell as much as it wants at the same price as B sets for its product, it will. But if it can't meet its sales goals at that price, A can come down and sell the car for anywhere between $50,000 to $60,000 that it needs to to get the job done.

The relevancy right now? Len has been suggesting that Toyota has been moving up the price of the LS towards the S and the 7 for the last few years, and will be doing it again even more forcefully with the new versions of the LS it will be introducing. So if his surmise is correct, THE CUSTOMERS WHO ACTUALLY BUY THESE CARS WILL BE EXPERIENCING A SHRINKING OF THE PRICE DIFFERENTIAL BETWEEN THE BRANDS. Understandably, if someone is only interested in the history, or the technology of these cars, PRICING IS IRRELEVANT. But for those people who are actually looking at buying one of these cars, PRICING STRATEGIES ARE EXTREMELY RELEVANT.

Now, you just have to accept that some people who frequent this forum are actually mostly interested in possibly purchasing one or more of these cars and want to learn about them. Others may be more interested in the business side of building these cars. Still others (and I assume you fall in this category) are only interested in appreciating these cars for their individualized approaches to beauty and amazing implementation of technology. Hopefully you agree that there is room in this forum for all of these folks.

Pricing is very relevant to people in the first two categories. Pricing is totally irrelevant to people who only fall in the third. [For example, the fact that MB is dropping the price of the S500 by about $2K likely is not very significant to your interest in the car; for people in the first two categories it may be VERY interesting.]

As long as the context of the discussion is "High End Luxury Marques", a mention of pricing strategies available to a manufacturer about to introduce a new HELM car is indeed relevant and appropriate - and to some of us, even (dare I say it?) interesting.

I rest Len's case.

ljflx · January 2006

Well you'd need to dress the LS up in sport gear like that and decide. I think it would look great. This pix avoids the worst part of the car - the trunk, and it minimizes the wheel arch view. Sport gear makes every car look great. It does look great on this angle but I'm still far more impressed with the existing S design.

ljflx · January 2006

Thank you again Gary. Merc1 has missed points I've made or taken them far out of context for a while now. Witness my comment that celebs will buy up the LS hybrids being viewed as an MB status downturn.

grandaddy · January 2006

Just expect your LX 470 to get better as it ages. My '00 is still perfect and still a pleasure to drive. I will buy another one in a heartbeat when and if the time and need ever arises. Only cost has been routine maintenance. I really think I could drive this thing for 10 more years and it would still be like new. I don't know if you have noticed this but the paint and finish on the LX 470 is the best I have seen, bar none.

big3forlife · January 2006

Never though id see the day when people would say Lexus is as good as Mercedes-Benz or BMW

hpowders · January 2006

The reliability issue with BMW's is old news.
CR has recently upgraded the 5 series to satisfactory reliability.
Writing from my own experience, I have had 3 BMW's since 1993 and have only had to have regular oil changes paid for by BMW, and of course, new tires.
I don't believe I am the lucky exception to the rule here.
BMW had a reliability problem. They listened. They fixed it.

tagman · January 2006

Len has been suggesting that Toyota has been moving up the price of the LS towards the S and the 7 for the last few years, and will be doing it again even more forcefully with the new versions of the LS it will be introducing. So if his surmise is correct. . . . .

IF,IF,IF,IF,IF . . . his surmise is correct . . . then I must say the "value" equation would be altered!

Now, IF, IF, IF, IF, IF the "value" factor changes, then we can further surmise that the Lexus buyer will weigh less on the "value" as it relates to the historic price advantage. That, therefore leaves the "other" factors related to the buying decision.

Well, that leaves "reliability" itself. That's pretty much the majority of what you hear from the "Lexus camp" nowadays. To me, that's important, but it's "thin ice", if it becomes the ONLY factor by itself. The other HELM's are generally considered reliable "enough" to be considered by prospective buyers, that's for sure, and the styling and/or handling advantages of the other HELM's need to be considered, of course. The "new" model factor always helps, so we can expect that to assist the sales of the S-Class and the LS for a while.

In the long run, I think Lexus can in fact close the price gap, somewhat, due to their historic sales momentum, social acceptability of their cars, and "reliability" statistics . . . but I do not think that those factors are enough for Lexus without a "noticeable" price advantage. If the prices were about the same . . . yes, there would be those that would still buy the Lexus, of course, but, IMO, those numbers would SHRINK, and more buyers would then choose the other HELMs as the preferred choice.

Let me conclude, though, by saying that I do NOT actually believe that Lexus will give up their price advantage, and that they KNOW very well what their formula for success is here . . . and you can expect them to continue with their winning and BRILLIANT formula for years to come. Hence, the Lexus price advantage MUST stay.

TagMan

ljflx · January 2006

The price advantage will continue but it will narrow just like it did in 2001. But in the p&L world Lexus unit profit is rising and MB's is falling. I'd say by the next redevelopment of the cars in 2014 or so there will be minimal or no price differences on the cars at all. It's a natural busines cycle and it gives both brands the chance to accomplish strategies to raise prices (Lexus) and cut costs (MB) and improve weaknesses on quality (MB) and car line development (Lexus). Have seen it many times in my career - this is just a different product line.

On the business side there is another important thing to consider here. Many of the same people own these prestigious brands as dealerships. But the Lexus dealerships are far more profitable than the MB dealerships. There are a number of reasons for this including the much better price elasticity Lexus gives their dealers on MSRP to dealer cost. We all should know well the power of the retailer in the distribution chain of any business segment and cars are no exception. I would expect the MB dealer network to bring a lot of pressure on MB for changes in the years to come and they will use Lexus as a big wedge.

ljflx · January 2006

Tagman - The $71K LS ultra was a more expensive lease than a 75K S430 in 2001 and it was only $100-150 less a month than the S500. I priced all of these across the board in 2001 and looked close again in 2004. That battle on value was already fought and is over. As far as I am concerned the new battle is just escalating up now to an 80-85K car and a 100-110K car in this 2007 go round. I don't see the big if's that you do.

rjlaero · January 2006

I just saw the new 2007 S class in person and was quite disappointed. The body shape doesn't look any better up close than it does in person. And I'm not a big fan of these "ATM" dashboards that seem to be growing in popularity. Mercedes stays on the path of poorly stlyed cars that reek of Chrysler and Cadillac

Give me the current Audi A8 all day long over any new body style S class.

tagman · January 2006

I do agree, as it is my understanding, that the profit margins are indeed greater for the Lexus dealers themselves than for the Mercedes dealers. I was told a number of years ago that Mercedes had for some reason changed (narrowed) those margins. They had deliberately made the MSRP much closer to the dealer's invoice. My recall on this is a bit fuzzy at this moment, but it sticks in my head for some reason that there was a deliberate action by Mercedes on this.

I understand your points that are well taken, but I still think that the price advantage needs to be perceived by the buyer. Even if it translates to leasing programs that favor the Lexus for high residual values and smaller depreciation payments. So, yes, as the gap might close, there would still be buyers. Heck, if the Lexus was MORE expensive there would still be buyers (enough of them? that would need to be determined IF IF IF the gap is truly closed) . . . but in my opinion, the wider the gap (less expensive the Lexus is) = more Lexus units sold. And I believe Lexus will continue to embrace that (price advantage) strategy.

OMG, I need to be thinking about football!

TagMan

tagman · January 2006

The body shape doesn't look any better up close than it does in person.

????????????????????????????????????????????? :confuse:

lexusguy · January 2006

I'm not saying that all non Lexus vehicles are shop hogs. The cars that compete specifically with the LS though, particularly the 7 and A8, are not exactly known for setting the world on fire when it comes to reliability. A friend of mine's '04 Audi A8 needed a new engine. It was in the shop for weeks. Some people are willing to accept that, I'm not. My daily car has to work, 24\7, 365. Who but the LS can say with 100% certainty that they can do that?

garyh1 · January 2006

I was told a number of years ago that Mercedes had for some reason changed (narrowed) those margins. They had deliberately made the MSRP much closer to the dealer's invoice. My recall on this is a bit fuzzy at this moment, but it sticks in my head for some reason that there was a deliberate action by Mercedes on this.

I not sure of the exact year, but I think it was somewhere between model years 1996 (when the new W210 came out) and 1998 (when they switched from the I6 to the V6). They wanted to be able to advertise it to appeal to a larger audience, and decided to cut the MSRP. I know when I bought an E in '94 there was a ton of negotiating room, but when I got my next one in '98 they were selling very close to MSRP, although the net price did not go up very much.

ljflx · January 2006

Tagman - re MB price policies - From what I know and it's first hand, it's that MB wanted to control discounting through lease subsidies and it's own discount programs. It didn't want dealers running the show on that. It's also partly a false prop up of prices and allows one to say cars are still commanding full MSRP when they are not. It did not make the dealer network happy. From a consumer standpoint it tranlstes to lease and buy at the end of the lease rather than buy upfront if you are MB shopping. Some MB buyers who leased in 2001 must have surely got some great lease end negotiated deals given the big price differences between the lease buyout and the real market prices 3 years later. Brightness exaggerates the leasing aspects too much but he is right on many of his points to a degree.

Time for Football - my predictions Steelers and Panthers. Let's see.

tagman · January 2006

Steelers 24
Broncos 3

. . . at the half . . .

I'm a Raiders fan (which can prove challenging at times), so I HATE Denver. This is good.

BTW, thanks for confirming my fuzzy memory about the MB pricing constraints. Your explanation is appreciated.

TagMan

designman · January 2006

Lexusguy, just curious. It seems you have a taste for cars with panache. If reliability wasnt a consideration, which daily ride would you go for?

By the way, I ran into a Lexus family at a party recently. The ol man drove an LS and mom had a GX. She was on her second tranny and it needed to be taken in again for the same symptom the first one had. She said when idling at a stop it felt like a car was tapping her rear bumper.

tagman · January 2006

I'm not saying that all non Lexus vehicles are shop hogs. The cars that compete specifically with the LS though, particularly the 7 and A8, are not exactly known for setting the world on fire when it comes to reliability.

OK . . . a moment between football games . . .

Looks like Len and I are happy campers so far with the Steelers big win. But, I'm looking for Seattle to win the next one, which puts me out on a limb a little, but that's OK.

In the bigger picture, I'm sorry that I haven't considered that the A8 is that significant a competitor to the Lexus LS.

ljflx · January 2006

Tagman - I had the Steelers 30-20 as my prediction. I thought they should have been 7 point favorites. In the next game I like the Panthers and I love the coach - John Fox. But this is not a cut and dried game to me. Superbowl - I love Bettis and want badly to see him win it as he exits. Pitt will be favored over whoever wins here.

lexusguy · January 2006

Very good question. I think I would have to say, Quattroporte. Its a car that speaks to the soul, in a way that the LS just cant hope to emulate.

Interesting about that GX, I guess they cant all be perfect. Probably an '03.

merc1 · January 2006

And like I said before, who cares? I at no time said price was irrelevant. Pricing structure, whatever you want to call it.....nobody cares about how a company arrived at the price they're asking, well no one except Toyota devotees. As long as the price seems right to the buyer I can't how or why they would care about any of this. Like I said before this pricing structure stuff is just that irrelevant, never said the pricing itself was irrelevant. Pricing is only irrelevent when it comes to sales around here.

M

merc1 · January 2006

LS460:

A tuned IS350 that was on display - the info read "well over 300hp":

cont....

merc1 · January 2006

Rolls-Royce Phantom:

cont....

merc1 · January 2006

Maserati:

Love this shot!

Such a beautiful car this Quattroporte is. Just gorgeous.

cont...

merc1 · January 2006

The Maybach 57S:

This is what the Maybach should have been from the start, but without the white leather!

cont.....

merc1 · January 2006

Mercedes-Benz

S65 AMG:

SLR:

CLS55 AMG:

S550:

SL55 AMG:

M

merc1 · January 2006

Jaguar:

Aston-Martin:

Ripade Concept:

I'm not thrilled about AM having taken an DB9 and splicing in 2 more doors, but it did make for a lot of oohs and ahhs.

Lamborghini Murcielago Roadster:

M

merc1 · January 2006

Last but not least, Audi and BMW:

Audi:

Q7:

The S8 with the big grille everyone hates and one regular A8:

RS4:

S6:

BMW:

A few more from Mercedes-Benz:

M

designman · January 2006

Wow, that looks like a lot of work. Great job and thanks.

ljflx · January 2006

I never had the consumer in mind or what he thinks as he walks into a dealership when I posted that. I was simply mentioning the flexibility Lexus had in pricing because of their lower and more efficient build costs and that they would continue to use it to their advantage in pricing the car. I don't know how you even began to see it in a twisted way. We are trying to guess the unannounced price and when you do that pricing strategies and build costs are way more relevant to many people than you imply. Maybe your not being a buyer here skews your thinking.

merc1 · January 2006

Being a "buyer" doesn't give any extra insight into "guessing" where Lexus will price the LS460. We all know they'll price it right below the S-Class as usual. That is Lexus' "pricing strategy".

M

hpowders · January 2006

Hey Merc1-thanks for the comprehensive photos-a lot of work, for sure!

I definitely will be checking out the Q7 next time around.

tagman · January 2006

merc1,
As you know, I don't go near as far back in this forum as some of you other posters, but I've probably posted enough by now for you to get a sense of some of my views and opinions, as I have gotten a sense of yours. Your respect and admiration for the Mercedes line particularly has been interesting to me right out of the gate. Would you mind elaborating a bit for me as to the origins of this? I'd appreciate it.
TagMan

sv7887 · January 2006

Merc,
First of all, thank you for your excellent write-up on the auto show. The pictures were an unexpected plus! I'm excited to hear Mercedes is offering the S320 CDI. I only hope they can make it clean enough to pass MA emissions standards. It is a crime that these cars are not allowed to be sold when oil is in short supply!

I wonder if the S320 will be decontented to some degree like the E320 CDI. I would prefer a S Class without all these fancy electronics that will likely cause trouble over the long term. I'm almost certain a MB is as mechanically sound as any other car. The complexity of some of the new car's systems is what has me worried. I wouldn't mind an S Class with a standard suspension as opposed to an Airmatic one.

While I don't like the wheel flares, the new S Class has a great presence. It looks substantial and solid. I'm not the greatest fan of the center cluster, but I like the fact all the controls are flush with the surface.

Having seen the S in person, do you think it looks better or worse than in the pictures?

Thanks again for the reviews!
Sam

grandaddy · January 2006

What you meant is perfectly clear and relevant to everyone except merc1. And you are right on target.

hpowders · January 2006

What you meant is perfectly clear to me.
The Lexus strategy will be to price the LS 460 below the S-Class.
Why should they change a formula that admittedly has worked so well?
You are absolutely correct. One doesn't have to own an LS to figure out what is so logical.

ljflx · January 2006

The LS430 ultra was priced just below an S430 and is a SWB only car. Now we have 3 trims, a hybrid, a host of things that the car never had and 5 more very successful years and growth in status since the 2001 pricing guidelines were set. One needs to be a Lexus buyer to understand this it seems.

blckislandguy · January 2006

Merc1, thanks for the great photos.

I wonder though how relevant trade shows like this really are. They are hugely expensive, only a relatively small number of civilains (non-vendors, non industry types) actually attend (and many of them are just lookers), etc. The fact that a D-C exec drove a three wheeled motorcycle up some stairs last year may have caused a stir but I don't think sold a single car. I think that the manufacturers move more iron at the local or regional shows where dealer people are present.

tagman · January 2006

One needs to be a Lexus buyer to understand this it seems.

All others are ???????? :P . Gimmee a break.

It's Steelers and Seahawks.

merc1 · January 2006

Thank you. You clearly don't have to be a buyer to understand the most basic of Lexus practices - undercutting the Germans in price. The SWB LS460 will cost less than the S450 and the LS460 will cost probably the same or a little bit more than the S450 in order to undercut the S550. The LS600h is the only wildcard. It will likely cost the same or more than S550 to undercut the S600. Or the might price the LS600h at the same level as the S550. You have to be a buyer to understand this or make a guess based on past Lexus practices? Yeah sure. The only thing in question is the actual dollar amounts and the "buyers" are just as in the dark about this as anyone else.

M

merc1 · January 2006

Sure. I'm pretty embarrased to admit what my favorite luxury brand was up until Mercedes. For me it was the new for 1986 W124 E-Class. This car's engineering details - the single blade wiper, spring-suspended seats, different size rear-view mirrors etc. are what initially attracted me to the brand. Then I drove one and found out that they didn't drive anything like my favorite luxury brand at that time - the Mercedes drove world's better. That did it for me. The specific models that "did it" were the 1986 300E, 560SEL and 560SEC and then in 1988 the 300CE. Some of the best cars ever built by anyone and easily the best in their repsective segments at the time. I didn't really like the SL until the R129 or 1990. Thats the short of it.

M

ljflx · January 2006

I was replying sracasm to sarcasm. Too much of an over-reaction here.

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