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High End Luxury Cars

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Comments

  • rgswrgsw Member Posts: 333
    1967 Toyota Century....
    http://www.toyota.co.jp/Museum/Tam/Car/Toyotacentury/
    I hope the new one does not look anything like this one.
    Here is a more current picture.
    http://www.automotiveforums.com/vbulletin/showthread.php?t=14773
  • michael_mattoxmichael_mattox Member Posts: 813
    Love the interior....HATE THE EXTERIOR...Looks like a large version of the old Buick Centry I once had (The one that had the same body style for 20 years, may still have that style)
  • merc1merc1 Member Posts: 6,081
    1. I'm not going to get into the reliability thing again, yes Mercedes has a problem, a pretty good size one at that. I meant that all the negative press has been a sales handicap, not the problems themselves, they are just that problems. I'm sure Mercedes has lost more than a few sales with the survey worshiping crowd.

    2. Your second point is dead wrong and has no basis simply because if Mercedes has, according to you 3 cars that cost less than the cheapest Lexus, then they surely have at least 10 that cost way more than any Lexus, CL55, CL500, CL600, S500, S55, SL500, SL55, SL600,
    S600, and the E55. You're telling me that all these much higher priced cars don't count?

    I clearly stated that the ES330 outsells the C-Class.

    "If the ES shouldn’t be added to the IS when comparing to C-Class sales, then what does the ES go up against?"

    First of all the C-Class variants are of the same car, with different engines and trims etc. The IS300 and ES330 don't share anything, not even the same engine or platform, so it would be merely reaching to try and lump their sales together. The ES competes with the C-Class to a degree, thats why I stated before that it does outsell the C. I personally find it's biggest competitors to be Buicks, which is what it rides/handles/drives like, although it's much better built. And probably the I35, which is about the only other foreign car playing the fwd card in this price class now. The Acura TL has moved towards being sporty.

    3. So basically you just proved what I said, out of the whole Autonation group you found 4 base C230s, yet according to you they're so plentiful to the point of pumping up Mercedes' sales numbers. Right. Remember I never even mentioned Lexus' MSRP's vs what they actually had available, you're just now mentioning that.

    Now again what does the price relationship of the IS and the base C models have do with the entire Mercedes lineup of cars compared to Lexus'? Do you not see that Mercedes is just as loaded with big $$$ cars as they are with cheaper ones? Especially compared to Lexus. No because that wouldn't fit in with your theory.

    "The point is (as I tried to indicate with wording like "the ENTIRE product line" and "the total lineup") that the totality of MB's line (all cars, all SUVs) starts at a lower price point than Lexus."

    That simply doesn't mean much because Mercedes sells a good number of E, S, and SL cars, relative to their competion, and like unlike Lexus, Mercedes sales gains of the past few years weren't made on just one car and 2 SUVs, they were made on nearly everything they sell, except the ML and SLK. Plus, plus the C's starting priced compared to the IS300's isn't repeated anywhere else in the lineup of these two brands. The E320 surely doesn't base for less than the GS300, the S430 most certainly doesn't base for less than the LS430, ditto SL500 vs SC430. Again, we see who's cars really costs more.......

    "yet Lexus still outsells MB (total product line). "

    Yes they do because of SUVs!! You keep stating this while trying to show me sales numbers for C-Class cars, of which only the ES330 manages to outsell it, WHAT ABOUT THE E vs the GS, S vs LS, SL vs SC, C vs IS........the relationship in each case either a) Mercedes outsells the Lexus, or b) they are in a dead heat.

    You're trying to attribute Lexus' sales lead to cars, and it isn't. Then on top of that you're claiming that because 3 Mercedes' are cheaper than the IS300, that Lexus has made some kind of stunning achievement based on car sales, when the reality (cold and the hardest of numbers) of it is that Mercedes outsells or sells the same amount of cars as each competing Lexus car model. The one and only exception to this is the C-Class vs the ES330. The sales dominance you keep harping on isn't based on Lexus' car sales!!

    What you're doing is like comparing a company like Ford to Honda, and claiming that Ford outsells Honda, which is true, but like you know who, Ford's truck sale numbers are extremely impressive, while Honda sells more Accords........its the same exact scenario.

    The bottom line is that if you going to look at how many cars Mercedes has that are cheaper (3) than the cheapest Lexus, then you have to look at how many they have that are more expensive than any Lexus, without even looking at the MB website I count 10. Ten compared to Three!!!

    I agree that ultimately the SUV vs CAR things is really irrelvant because in the end total sales is what will be counted up for the press releases due Jan 1, 2004. I'm only using the seperation of the two because you're trying to act like Lexus sales lead is due to moving more cars which couldn't be any further from the truth.

    michael_mattox,

    What I do understand is that you had nothing factual to back up your previous claims.

    M
  • oac3oac3 Member Posts: 373
    Great point. And I have to echo your voice of reasoning here on the SUV_vs_CAR sales [non-permissible content removed]-for-tat. GM would be out of business today if it were not for SUV's. Ditto FoMoCo. What the heck is Merc1 smoking these days, anyway ? Lexus outsells all luxury brands in the NA market. Period. No amount of armchair quarterbacking and excuses is going to change the situation unless other lux makers address their weaknesses and compete better against Lexus, wether it is in price, quality, reliability, customer service, etc.

    All we hear from MB fans are excuses why OVERALL MB sales are declining against the competition. Only a little less than 5 years ago, MB was the #1 selling lux brand in America, now they are about to fall to #4 and all we hear are excuses why Lexus sales are dominated by SUV's and not cars.... blah blah blah... I hope MB execs are not listening to these stuff from fans like Merc1, lol !

    I am sad to report that there has been little buzz out here in Tokyo (the city I visited) about Lexus. A couple of people I talked to say that the news is kinda low key and they remain skeptical of Lexus in Japan. A few who are huge BMW fans say they are not affected by the new faces of the 7- and the 5-, and want to own BMW's regardless. From my little, unscientific probe here in Tokyo, I think Toyota/Lexus needs a lot of marketing ad campaign to sell Lexus in Japan. Maybe they'll wake-up the populace here to the merits of a Lexus brand in Japan. Maybe they won't. I guess we'll see.

    Oh, my company VP here in Tokyo drives an S500, and I got to ride with him (chauffered, of course) to dinner on Friday. Car was black/black and drove like a dream. Creamy smooth, and very luxurious. I sure felt good in the back seat. Plenty of leg and elbow room. The Nav in the car looked so good, almost Lexus-like.
  • merc1merc1 Member Posts: 6,081
    You mean to honestly tell me you can't see where syswei is pointing to Lexus' entire product line as the main factor as to why Lexus' sales are so high? My only point about that is that their entire product line doesn't sell like all the hype in here would suggest it does. He acts like every Lexus model is a star seller like the ES or RX, and it simply isn't true.

    Seriously, all these facts go right past you?

    If you can't understand that a much higher set of sticker prices would hinder #1 sales status then you're not dealing in reality. There is no way the brand with highest sticker prices can be a bestseller in todays market. When they did accomplish this it was the introductory year for the CLK and M-Class, two models that were arguably cheaper , especially the ML, than most (not all) other Mercedes' at the time. And ironically it was the ML (an SUV) that did most of that sales growth, proving once again this the hottest segment and what drives you know who's sales machine.

    You're saying that other automakers need to address their weaknesses in order to compete with Lexus, like Lexus has no weaknesses. Hopefully for Lexus they aren't thinking that way about the GS and IS.

    This was all brought about by two things. The implied notion that Mercedes' cars weren't good enough to sell better, forgetting that that cost more. Secondly, that Lexus cars are better so they sell more, when in fact they don't sell more cars. They do sell more vehicles total, because they do sell a better collection of SUVs, but going by the first point it would seem the implication is that Mercedes' cars are better, at least going by syswei's more sales = better car theory. Since this theory is based on the assumption that everyone who bought a Lexus looked at a Mercedes and decided on the Lexus.

    It's amazing that I'm often accused of not able to see anything good about Lexus, but I do give Lexus it's just credits on reliability, quality, service etc. Yet the fact that Mercedes sells it's more expensive cars at an equal or most often better rate than Lexus does, it says nothing about their market presence or penetration and is lost on everyone...and therefore means nothing.

    Boy if Lexus had a more expensive car than a Mercedes that sold better, you'd never hear the end of it!

    M
  • b4zb4z Member Posts: 3,372
    I don't know how it is where you guys live but I have noticed that all of the Lexus dealers I have been to in SC and NC keep a fairly low inventory
    of new Lexus vehicles.
    I am suppose this is done on purpose and creates a since of urgency.
    They typically have 2 to 3 times more used Lexuss than new.
    The MB and BMW dealerships I have been to typically carry more new inventory.
  • sysweisyswei Member Posts: 1,804
    Let me try to put this in better perspective. Lexus full product line runs from $30k-71k. If competitor xyz’s line runs from 80k-300k, it would be easy to see that xyz “should” sell fewer vehicles. If xyz’s line runs from 40k-140k, it would also be easy to see that xyz “should” sell fewer vehicles. But if xyz’s line runs from 26k-140k, as MB’s does, just why should they be selling fewer vehicles that Lexus, which runs from 30k-71k?

    To my "yet Lexus still outsells MB (total product line)” you replied “Yes they do because of SUVs!!”. So? If, 10 years from now, MB outsells Lexus in total vehicles, but does so on the strength of SUVs, does that make the achievement less significant?

    You accuse me of "trying to act like Lexus sales lead is due to moving more cars" and I don't see how an honest reading of my posts could result in that conclusion. My posts have including wording like "ENTIRE product line" and "the total lineup" and "the totality of MB's line (all cars, all SUVs)" and, a few days ago, "poor-selling GS".
  • merc1merc1 Member Posts: 6,081
    "But if xyz’s line runs from 26k-140k, as MB’s does, just why should they be selling fewer vehicles that Lexus, which runs from 30k-71k?"

    Because they only have a few cars at that 26K price point you keep pointing to, did you not see all the ones that list for more than 71K? Mercedes has more cars that list over where Lexus tops out at, and there is no way those three cars below Lexus' cheapest model could sell that many to make a difference. There are at least 10, count them TEN Mercedes' that list for more than 71K, compared to only 3 that you listed that cost less than 30K. Six of those list for over 100K, a place where Lexus isn't represented. It's very simple. You keep talking about the C-Class, which again, like I stated earlier is the only Mercedes that has a base MSRP less than a Lexus. One Class of cars compared to 6 other models lines of MBs that sticker for higher than their Lexus competitors. How in the world can one model line (C) offset this? It can't.

    "If, 10 years from now, MB outsells Lexus in total vehicles, but does so on the strength of
     SUVs, does that make the achievement less significant?"

    No of course it doesn't. I clearly stated in my previous post why I made the distinction. But you refuse to see the reason why Mercedes will probably never win the sales race...and really can't be expected to win a sales race.....their MSRP's are much higher overall.

    "My posts have including wording like "ENTIRE product line" and "the total lineup" and "the totality of MB's line (all cars, all SUVs)"
    and, a few days ago, "poor-selling GS"."

    Again, I said anything to the contrary because you initially stated that Mercedes' cars didn't sell more because they were poor cars, and I responed that Lexus'cars must be lesser because Mercedes sells more cars. If Lexus dominates in SUVs, Mercedes does in cars, based on your more sales = better car theory. I know you were implying overall, including cars and suvs, but that goes back to you ignoring the price differences.

    M
  • michael_mattoxmichael_mattox Member Posts: 813
    Specifically what claims do you want me to back up...The quality claim?...The total sales claim? (even though Lexus has fewer product lines then Mercedes as you have pointed out.)
  • sysweisyswei Member Posts: 1,804
    You wrote “Mercedes will probably never win the sales race...and really can't be expected to win a sales race.....their MSRP's are much higher overall” and my comment is that you seemingly refuse to recognize that MB’s higher prestige SHOULD allow it to maintain higher MSRPs.

    Put it this way, suppose Timex 14 years ago had introduced a new, luxury watch brand, called Lex, lets pretend. And let’s say that everyone in the world recognized Lex as being EXACTLY as desirable as Rolex, Cartier, Brietling, etc., EXCEPT for prestige. Don’t you think that Rolex should be able to command higher prices, but still sell the same number of units as Lex?

    Also, your statement flies in the face of two facts:

    1. MB’s higher prices have – in the PAST – not prevented it from being the number one unit seller

    2. On an individual model level, some MBs, such as the E, outsell the relevant competition, despite the higher prices
  • footiefootie Member Posts: 636
    Just so we all understand, even though MB would llike to be able to charge a prestige-based price premium alone, they unfortunately have to add a very significant warranty cost to the price of each car due to their lower reliability and much higher incidence of service calls than Lexus, Infiniti or Cadillac.

    Some consumers may be thinking that they are paying for prestige with that higher MSRP, but in fact, they are prepaying the service requirements that their vehicle is most certainly going to have during the warranty period.

    Lexus and Infiniti are in the enviable position of being able to sell very competitive offerings at a lower price with similar services and warranties and still make very good profits because they don't have to spend near as much of their gross margin on warranty work.

    I think the other part of the 'prestige' pricing difference goes into MB's relatively huge merchandising and advertising campaigns.

    It's all about money.
  • ljflxljflx Member Posts: 4,690
    The SUV sales are also more profitable and are increasing the average sales dollar of the whole line. The RX now averages over $40k and the GX averages over $50k.

    To an enthusiast the SUV doesn't count. To a car manufacturer the enthusiasts who thinks like that is irrelevant. Lexus will add the HPX soon and I'll bet it will be a smash. The enthusiast will diss it and Lexus will laugh all the way to the bank. I also think that the new GS will be a big seller. Saw a new 5 series in person today. Awful!
  • sysweisyswei Member Posts: 1,804
    I read years ago...and I'd like to know if this is true or not...that decades ago some guy at GM figured that getting the customer to (in essence) do final quality control checks would save GM money versus doing it in the factory. Save money at the factory..but I guess they didn't count the cost of losing customers down the road.

    Not saying this is true of MB or anyone else today, as I think all car companies understand the importance of quality. But I think its an interesting story.
  • sysweisyswei Member Posts: 1,804
    http://www.auto-g.jp/special/2003_1014/toyota/lexus_lf-s/index.ht- - ml

    http://www.toyota.co.jp/en/event/auto_shows/lexus/index.html
  • ljflxljflx Member Posts: 4,690
    I'm trying to figure out how Automobile magazine sees Lexus imitating BMW with that next GS. Either someone had one drink too many over there or someone really knows how to stretch their imagination. On the other hand maybe they think it should have been a BMW.
  • sysweisyswei Member Posts: 1,804
    We are going to know alot more in less than a month:

    http://www.lexus.com/about/press_releases/popups/2003/pr_12_09_a.- - html

    Merc1, will you be going to this show?
  • pablo_lpablo_l Member Posts: 491
    I don't get the discussion about sales volumes here - what's that got to do with cars' qualities? If sales volume proved anything, heck, buy a Beetle while you can.

    On the sales volume side, the Beemer 7 series lost 10% volume to 40k up to last September, while the S-class shipped 56k. Jag XJ and Audi A8 shipped 22k and 13k, respectively. So Merc's doing alright in the luxury segment. All numbers courtesy of http://www.autobild.de/aktuell/neuheiten/artikel.php?artikel_id=5334.

    Far more interesting: http://bilder.autobild.de/bilder/1/41404.jpg

    2005. No one can accuse Benz of design mis-steps with the S class. And Merc also has CLS and GST (R-class) on its way. If I were a one-product competitor, I'd be very concerned.
  • ljflxljflx Member Posts: 4,690
    The HPX styling has the GST beat in my opinion. The rear of the GST doesn't measure up to the looks of its front end. Inside - it finally looks like MB is getting up to par.
  • gscoupegscoupe Member Posts: 30
    New S class pics in the link, nice front end, ugly rear end.
    The CLS is not a good looking car at all IMO, but I have seen pics of its interior which is very nice. So are we going to get both of these new models by the end of next year ?
  • michael_mattoxmichael_mattox Member Posts: 813
    Those head lights look like they came right off a lexus.

    Is Mercedes now buying parts from lexus to save money??
  • merc1merc1 Member Posts: 6,081
    "1. MB’s higher prices have – in the PAST – not prevented it from being the number one unit seller"

    That happened for ONE year, one single year. Hardly proof of anything. It's seems as though you're determined to forget certain key points that I have already listed in previous posts. The year Mercedes was #1 in the luxury market, they did it with a (at the time) brand new SUV. JUST LIKE LEXUS DOES IT NOW. They never did this with pure car sales. I honestly don't know why that is so hard to see.

    Now, after about 6 posts you clearly recognize that despite Mercedes higher prices they outsell Lexus on certain models, but yet you expect them to be able to outsell Lexus totally because of that..........again you're ignoring the SUV component.

    You also keep ignoring the fact that MB has at least 10 cars that costs more than any Lexus. You're acting like 3 C-Class models priced under Lexus are going to make up for the 10 that are priced way above any Lexus and put Mercedes first in sales. Thats backwards. It 3 vs 10. You can't see that MB's lineup is skewed towards the middle and top end?????? They sell most of their cars for 45-50K or better, right where Lexus tops out, average sales wise. Only the SC430 and LS430 consistantly sell for a higher average price than 50K. The GS430 sales as if it's about as rare as a M5 or AMG product.

    Like you stated earlier the "what if" and now "lets pretend" stuff is silly but... The answer to your overall question is NO because unless the "Lex" costs the same as a Rolex, Brietling there is no way the higher priced brands are going sell in the same numbers. What you're reaching for doesn't exists. Curiously enough you left price out of the "pretend" scenario. Rolex's and Brietling's watches costs as much as some of these cars we're talking about here, how in the world would they every sell in greater numbers than a much cheaper brand. That doesn't make sense.

    I mean in all seriousness you should really research this. Since anyone can remember Cadillac was #1 in unit sales. Why? Becasue their best selling car, the DeVille used to costs about what the ES330 costs today, that combined with lots of fleet sales put them over the top year after year. The SUV (Lincoln Navigator) is what caused Lincoln, for the first time in the modern era to surpass Cadillac for #1 in 1998. Cadillac was so devestated by this they actually tried to lie about their sales numbers. Mercedes was never, ever in the running until the ML came along. Mercedes' best year prior to the intro of the ML was 1986!!! Even in that year, they didn't sell more than 100K units. True they outsold BMW for years and years, but that too changed in the 90's because BMW became red-hot (with the 3 and 5) and they too costs less, in most cases, not all. Nor does BMW try to sell so many cars at the top end. BMW has only one car over 100K, the 760Li. The Z8 is winding down now, and it never did more than 300-400 units a month. The ML and to a much lesser extent the CLK (20K in a good year), which is a lot cheaper than the previous E-Class based Coupe got Mercedes into the sales race. Only since 2002 did they decide to add so many C-Class variants that I sometimes can't keep track of all of them.

    Detroit? Oh yes, I'll be there, it's the single most important autoshow in America. There is so much debuting there (Corvette, Ferrari 612S, SLR, 6-Series, surprises from Audi, BMW and others) this year that it should be mandatory for anyone that even remotely likes cars....lol.

    footie,

    Yep those are the only reasons a Mercedes costs more and a Lexus or Infiniti costs less. It has nothing to do with most of those Lexuses and Infinitis being based on much cheaper every day cars to begin with. Nor does Lexus advertise as much, and Toyota's total advertising couldn't be more expensive for having to advertise for both Toyota and lexus compared to singular advertising for Mercedes-Benz. It's amazing what you can come up with when you only look at half the picture.

    ljflx,

    "To an enthusiast the SUV doesn't count. To a car manufacturer the enthusiasts who thinks like that is irrelevant. "

    And likewise enthusiasts reguard Lexus as being irrelevant. And these enthusiasts do count, other wise BMW, Audi and to a lesser extent Mercedes wouldn't sell as many cars as they do. Your assesment works both ways.

    M
  • pablo_lpablo_l Member Posts: 491
    To each their own, I see now Lexus similarities whatsoever. And I have no emotional investment in either brand. I think the future Benz S looks refreshingly sporty, far less bulbous than its competitors have become. Of course you have to see the car in person to make sure it's not just a flattering angle.

    It'll be interesting whether it pays off for Benz to offer as many higher end models : S, GST, CLS... though I am sure it's part bin magic and they've kept the cost down. There'll have to be come cannibalization of model sales - I suspect the additional models will eat away at E and S sales, and not only at rivals' models. I guess the overall increase in market share, even at increased cost of sales, is the strategy there. It's good for buyers, though, one's got to commend Benz for offering more choice.
  • ljflxljflx Member Posts: 4,690
    Of course the enthusiast counts but the pure bred enthusiast is a miniscule percentage of car buyers. Otherwise why would anyone buy an Accord or Camry when a 3series or C-class is also within reach.

    You miss my point. My point is that good business plays to where the money is not where the enthusiast is. MB and BMW missed the whole change to the SUV market badly. Maybe they cared too much about the enthusiast.
  • pablo_lpablo_l Member Posts: 491
    I am not sure the 3 series or the C class represent "enthusiast" cars. To me, an enthusiast finds a way to wing a 911, or something more unique. The 3 series and the C class and all of their equivalents are mass cars. In Europe, this is the number 1 selling car category by sheer volume, and the US is heading that trend as well. They days when people bought Taurus-like cars en masse are over. Semi-luxury is the standard these days.

    As to MB missing on trends, last I checked the M class actually initiated the image urban SUV trend. All Lexus had at the time was the LX, and that was not and is not a high volume car, highly competent SUV as it is.

    Finally, if revenue is a validation of anything, Daimler Chrysler's revenue was $160B last year, Toyota's $100B. Financially, the DC/MB recipe seems to work.
  • michael_mattoxmichael_mattox Member Posts: 813
    Hmmmmmmmmmmmmmmm
  • ljflxljflx Member Posts: 4,690
    makes more profit than the rest of the industry combined.

    If the 3 and C are not enthusiasts cars (which I question as well) than merc1's claim has no basis. If they are mainstream cars so are about 80%+ of the German offerings. I think the Europeans as a whole missed the boat on SUV's. It's partly because of European gas prices and mainly from misunderstanding the American market. Then they built an awful M-class and BMW has poor reliability with the X5.
  • pablo_lpablo_l Member Posts: 491
    Only a short time ago, Toyota had a huge loss, which makes me take their one year profit streak with a grain of sand. Business Week and industry analysts love to declare short term stuff a "trend" - we'll see. I will not forget they were in deep crisis a shot time ago, and that companies these days can temporarily sanitize their future results with huge write-offs taken at the right time. They are doing a lot of things right, and mostly it has to do with high efficiency cars, and little to do with their luxury offerings - this is straight out of Business Week, which covered them recently.

    As to SUVs, again, Merc started the cute-SUV trend with the M class, like it or not, and did a great marketing job with placement in Jurassic Park and such. People scooped them up like mad, and it has been a very profitable model for Benz. And the BMW X5 still wins fair amount of tests, and sells quite well (I've never liked it, though). We own an M, I just view it as a mere utility because to me all SUVs are actually garbage as fun transport. It amazes me some would call any other SUV in this class vastly superior - the overal differences are utterly irrelevant... isn't this a sedan board, anyway?
  • gscoupegscoupe Member Posts: 30
    The financial market is certainly much more bullish on Toyota's future than you are. Toyota's market capitalization is much more than Daimler Chrysler, Ford & GM combined. You don't get into such a lofty position in the industry by being a one year wonder. They have enough cash resources to take over the entire industry. Read the following link(might have been posted before here):

    http://www.detnews.com/2003/insiders/0305/05/a01-154360.htm
  • pablo_lpablo_l Member Posts: 491
    Yeah, they are now. It's all of a 9-12 month trend to declare Toyota and Nissan great. DC was the wonder child previously. This seems to go cyclically in the car industry, the next crisis in 3-4 years is pre-programmed. Seach the 2 year+ archives in Business Week and you'll find plenty of articles on Toyota's major troubles. With Nissan, the negative coverage is even more recent. Incidentally, the European car industry went through all of this in the 90s repeatedly - I remember the go-around of managers that were experts in cost reduction and model consolidation well.

    And, in any case, whatever that has to do with making better cars is utterly beyond me.
  • gscoupegscoupe Member Posts: 30
    besides, I always believe it's futile to argue which is the best or most desirable name brand, since different kind of buyers have their own criteria.
    Even the less successful luxury brands like Jaguar & Audi will always have it's own hard core loyal supporters that insist his/her own brand of car is the best thing in the world.
    Whatever anybody says here won't change anything that happens in the real world anyway.
  • pablo_lpablo_l Member Posts: 491
    While it is futuile to argue which one the most desirable brand is, whoever claims Toyota is that brand does not have a true car afficionado's definition of the word "desirable". That's why Toyota created the Lexus brand, and did not go for VW's long-winded effort to try to create a more upscale image over time.
  • ljflxljflx Member Posts: 4,690
    Just look at Toyota's cash position and low debt position. Forget that loss - that was a one-time writeoff that had nothing to do with operations and was primarily non-cash. The Balance Sheet is very strong. You can do all the tricks in the world with P&L's - even understate profits. Microsoft does the latter all the time by fiddling with deferred revenue. Then they ease that Balance Sheet build-up in a low sales quarter. That's why I feel sorry for the investor who buys on earnings news without looking at a Balance Sheet. You can't hide bad business decisions or faulty accounting on the Balance Sheet unless you create a host of illegal shell company's the way Enron did. Enron also booked revenue unethically. Anyway this is about cars but no one should forget that a well capitalized company has the ability to meet and anticipate market needs the best. Daimler is betting the ranch on RWD cars for Chrysler in the next few years. Bold move. But if it's wrong and there is a pretty good chance it is - look out below.
  • pablo_lpablo_l Member Posts: 491
    Very good points, but correct me if I am wrong: car companies' holding model -with a slew of companies locally and internationally- is perfect to finetune financials. I am not claimin there's anything Enron-like going on, but the huge one-time losses followed by quick high profitability sometimes makes me wonder whether part of those profits have been purchased previously, so to say. In any case, I don't think Daimler is weak fiancially, either, with the significantly revenue and near $6B in profits, if I recall correctly (I have held Benz stock for many years, with varying degrees of satisfaction).
  • ljflxljflx Member Posts: 4,690
    I haven't looked at Daimler in a while but the last time I did they had a pile of debt (I presume mainly from the acquisition, sorry merger of equals as it is being argued in court) and a week Balance Sheet. They got hit hard with Freightliner and Chrysler. I'm sure MB is doing fine but the strength of the Euro is hurting their US business. The weak dollar has much less of an impact on Toyota because it has so much North American production. Plus they engineered Lexus to be profitable at a Yen to dollar ratio of 90:1. So with the Yen in the 120's the last time I looked they are making a boatload of money with Lexus. By the way I bought Toyota stock a long time ago. Outstanding company and a great return. I did sell a part of my position though when they reported that colossal earnings a while back. Toyota does play games but they do it in a very legitimate way, They will vary cars they export out of the US and Canada based on currency fluctuations. Actually that is a form of hedge and is really smart business. I'm wrong to even call it a game.
  • c1rybickc1rybick Member Posts: 35
    Ferdinand Piech has said that he believes Toyota to be the best carmaker in the world. Frankly, I'm inclined to believe him.

    Toyota may not have quite as much of a lead today as it used to (back in 1985, really, what American made car could compare with a Cressida?), but they still have impressive engineering and superlative reliability.

    Even though I don't really care for my 95 4-cylinder Camry (I'd much rather have a RX-8).
  • c1rybickc1rybick Member Posts: 35
    The reference to American made cars being referenced to DaimlerChrysler, of course. Our 97 Grand Caravan is only 6 years old (120K) yet it has had to be towed THREE times already (and Mom is very scrupulous about maintenance).

    Then again, I had an aunt who in the early 80's bought a 10 year old Mercedes SL and said it was the most reliable and solid car she ever owned. Till she rear-ended somebody and totalled it. Then she bought a new Honda Civic (around 87 I think).

    That's a big jump, Mercedes SL to Honda Civic, but she was happy (and the SL she had was the same as the brand new models when she bought it, Mercedes being in the habit of not redesigning its cars too often back then, I figure).
  • footiefootie Member Posts: 636
    I can't find the "Big Loss" Pablo is talking about.

    Go to:

    http://www.toyota.co.jp/IRweb/corp_info/and_the_world/content.htm- l

    This is the 2003 Toyota Data book.

    Download the spreadsheet in Chapter 1.

    Sheet 1-1.6 contains financial results for 1994 - 2003. The net income is positive and growing every year. It hasn't been under $250million since 1996.
  • motownusamotownusa Member Posts: 836
    Toyota has surpassed both Ford and DC to become the second largest car company. Pablo, you must be smoking something illegal.
  • ljflxljflx Member Posts: 4,690
    They wrote something related to acquisition work off a few years ago. In international accounting that type of a writeoff doesn't always run throgh the income statement (I'm not knowledgable about Japanese accounting rules) and is simply a reduction of equity. In US reports it may have been restated to reflect US accounting rules since Toyota trades on the NYSE. From a business standpoint the writeoff was a non-event. Toyota is one of the strongest companies in the world.
  • pablo_lpablo_l Member Posts: 491
    Indeed, I smoke original Cuban Cohibas when the mood strikes.

    "second largest"... what criteria are you using? The revenue numbers can be easily checked... DC $160B vs Toyota $100B. Check it yourself.
  • ljflxljflx Member Posts: 4,690
    Toyota passed Chrysler in sales recently but it was either on a Year-to-date basis or on a quarterly or half year basis. It may also have been in unit sales rather than dollar sales but I'm not at all sure. It was well noted in the business trades and in the WSJ and NY Times.
  • footiefootie Member Posts: 636
    I can't find any record of any "losses" at Toyota whether on paper or not. So I am going to assume that whoever tossed that out here is confused. I also looked through the 'History' of Toyota and can't find any references to acquisitions in the last 20 years.

    Also, when I just rechecked the Toyota spreadsheet, I noted that the 256 number I quoted earlier, wasn't million of dollars, it was BILLIONS of yen. 1 Billion yen is approximately 10 million dollars. 256 Billion yen is 2.56 Billion.

    Toyota has recorded net income over 1.5$billion every year since 1994.

    FYI. There's no international 'accounting' rules that apply because those are national rules driven by national tax codes.

    There's Japanese GAAP and U.S. GAAP. (Generally Accepted Accouting Policy).

    The Japanese GAAP is much more conservative than the U.S. so the amount of profit by their GAAP in any year is about 1/2 of what it would like over here.

    Toyota is indeed one of the most profitable, best managed, customer focused companies on the planet.
  • footiefootie Member Posts: 636
    1st half Toyota Revenue for their 2nd Quarter ending September 30th, 2003 = 8.2 trillion yen or 76.6 Billion US $. Profit was 4.9 Billion US $. Revenue was up 8% on unit sales increase of 7.3%, net income up 23%. More units, higher ASP and lower costs. That's how to run a company.

    Source: http://www.toyota.co.jp/en/about_toyota/outline/index.html

    DCX reported revenues of 119.3 billion US for 3 (three) Quarters about 39.7 $ billion per quarter. So for the same time interval, DCX would have been about 79.4 $billion.

    DCX's revenues are down 9% in 03 from 02. Their profits are pretty paltry too - most which is coming from Mercedes.

    Source = http://www.daimlerchrysler.com/dccom/0,,0-5-72986-1-149192-1-0-0-- - - - 0-0-0-1033-7164-0-0-0-0-0-0-0,00.html

    I think that almost everyone agrees that unless some miracle happens at DCX they will exit the Big 3 next year. Toyota already has Ford in its sights for spot #2.
  • ljflxljflx Member Posts: 4,690
    Regarding your post last night re funny accounting - It's not easy to fudge the books in manufacturing. The big cash outlays either reduce debt or they have to go somewhere else - capitalized assets (auto plants, new car model development etc) or it goes into deferred costs/work in process/inventory and prepaid auto supplies/parts or it just gets expensed directly. Revenue booking is always tied to cost matching - either on fulfilment or on percentage of completion basis. Service businesses can play games big time because they all define fulfillment differently. But manufacturing started it all so the accounting remains the most straightforward.

    Footie - I'm a finance exec so unfortunately I know a bit too much about US GAAP. As for conservatism in bookkeeping it really varies. The Europeans are very conservative on a day to day basis but they have - in the past - written off all intangible assets of acquired companies or the Goodwill attributed to the acquisition to Equity immediately. Technically European acquisitions would be accounted for by reducing cash (or increasing debt) and reducing equity to the extent of the intangible valuation. By American standards that is very aggressive accounting. So if an acquisition is a bad one there is virtually no writeoff risk. To repeat myself in a different way that is hardly a conservative practice when it comes to keeping track of how well acquiitions have done. Some of that is changing now as international standards are being adopted. The American manager always has to live with that potential large writeoff as intangibles are added to assets on the Balance Sheet. So if its a bad one the whole world gets to see it clearly. Plus those intangibles get written down each year against income. So in this vane it is the American system that is conservative. But I know nothing about the Japanese system. They may have "COPIED" the Europeans or us or maybe, just maybe they invented their own system.

    OK - enough about world economics - we should get back to cars. But it was great to hear about Saddam's capture this morning. No more luxury cars or TLC's for him.
  • pablo_lpablo_l Member Posts: 491
    ".. The Japanese GAAP is much more conservative than the U.S. .." Uhm, you have followed their banking system for the past 20 years or so? It's not only me remembering they had some negative financial news at some point in time in the past 3 years, otherwise I'd admit to being confused. Finally, glad that you are now on your former statement on revenues after doing some research of your own. The latter always pays when doing business research, the press tends to have very skewed views for the sake of drumming up newsworthy stuff.

    As to manufacturing making funny economics tougher, it would seem several secret facilities in the USA are full with over $50B of telecommunications gear that vendors wrote off their inventory. Supposedly it's in inaccessible storage facilities. That'll sanitize your books every time, especially if you find a way to get the equipment back into circulation. I am just very suspicious of big write-offs followed by very rapid recoveries, again, it gives me the impression people just buy their profits in advance at times - not that it is an accurate perception every time, but lots of very funny stuff has happened in the past decade. Again, I am not saying Toyota does anything dubious, by all means they seem to be a very healthy corporation.

    Talking Saddam - I hear he was one of the few buyers of one of the worst cars ever, that horrid Lamboghini SUV they build in the 80s. He supposedly had several of them. Those who criticize the Cayenne would have a field day if that lambo was revived... :-)
  • ljflxljflx Member Posts: 4,690
    That's why you just watch those accounts I noted. In your example they capitalized costs and built up equipment that was not sellable. In auto mfg - watch those new car development costs which are capitalized as the models may not do as well as expected (triggering a write-off) and then relate deferred revenue to deferred costs. A healthy manufacturer will have a near 1:1 ratio or higher on the deferred revenue side. Toyota had a higher defrred revenue amount then they had a deferred costs amount when I last looked meaning they needed to catch up to demand. They also had a healthy relationship of receivables to revenue meaning they were collecting quite quickly as well. Books looked clean as a whistle to me. Trust me - I check out the quarterly Balance Sheets of my investments all the time.
  • sysweisyswei Member Posts: 1,804
    The reason I like to look at sales is that if you consider just one person, then for that individual there IS such as thing as that individual’s “best” car. For me, an LS is “better” than an S430. For you, maybe a S430 or 745 or Jag is “better” than a LS. The key words are “for me” and “for you”. And if all we concentrated on in this board was “what I like for my own needs” there really wouldn’t be much discussion going on...once a model year, each of us would just post, “for model year 200X, the best car for my needs is abc, because of reasons x,y,z.” And that would be the end of it.

    Implicit in many of the statements on this board is the notion that certain cars are OBJECTIVELY, not subjectively, “better” than others. Some would like to use their own notions of what is “better” and try to convince others of their belief. Others would like to rely on the writings of carmag reviewers who have driven a particular car, for free, for hours or days. Personally, I find value in looking at sales data (for vehicles in the same class, not Camry vs Rolls) because such data offers a huge sample size (statistically speaking) of what real buyers value and are willing to pay real cash for, encompassing all the factors that matter to them. I’m not saying that this is the determining factor in my personal choice of vehicle, just that it is interesting…and shows which company is doing a better job of meeting real market needs.
  • sysweisyswei Member Posts: 1,804
    I am honestly flabbergasted. You claim (post 3711) to believe that if 2 products are of identical desirability except for prestige, the more prestigious can’t command some level of price premium, and still sell the same number of units? Do you see that your view implies that if two products are priced the same, they will sell the same number of units, despite one being higher in prestige and equal in all other ways? Does this truly make sense to you? Prestige doesn’t have a value that people will pay extra for? Frankly, if I can’t get you to agree on something that follows from elementary economic theory, then I am very close to giving up discussing the whole sales/price thing with you. There has to be an agreement on basic principles for rational discourse to take place.

    You keep wanting to look at Lexus vs MB as on a model by model basis, saying that on a overall (all SUVs + all cars) basis, MB’s unit sales performance is explained by higher model-by-model prices, and that the higher prices aren’t simply compensation for higher prestige/heritage. Well, if that were true, wouldn’t we find that the model matchups where MB is most expensive (relative to Lexus) are the ones where MB sells poorly, and that the matchups where MB is priced similarly to or less than Lexus are the ones where MB sells well?

    In fact the exact opposite is true. It is the matchups where MB is priced similarly to or less than Lexus where MB has its greatest sales weakness. The C-class compared to the ES and IS. And the M-class, compared to the RX and GX. In the other lines, where MB is priced higher than Lexus, MB generally sells the same or higher numbers than Lexus…quite the opposite of what your theory implies. (The only exception is the G vs LX, where MB is priced higher and does sell less; but since the LX isn’t a big volume seller itself, the unit [as opposed to percentage] difference isn’t large, so this doesn’t go very far in explaining why Lexus outsells MB).

    Here’s my theory. I think that prestige/heritage has a value, and that people will pay extra for it. But people who are concerned about prestige will, if they can afford it, buy towards the high end…if they buy a C the neighbors will know that they’ve got the cheapest MB. So MB is able to extract a bigger “prestige premium” (pricewise) on the E and S than on the C or ML350, for example, and still sell well. And since people at the low end are not as concerned about prestige as those at the mid-high end, other factors become more important…like reliability, roominess, etc. So in my view it isn’t price that explains MB’s sales vs Lexus…it is PRODUCT (or product, reliability, service, etc). For the C, where MB sells fewer units than Lexus despite lower starting prices, maybe those factors are roominess, reliability, service. As for the ML…well, you’ve said yourself that MB has a product problem there, that the vehicle isn’t that desirable.

    Again, if your price theory were true, it would be the E and S with the (relative) sales problems, not the C and ML.
  • pablo_lpablo_l Member Posts: 491
    I think when people don't know what their own preferences are, they tend to buy what they think others approve of. That's why many buy a Rolex before they even bother to discover Audemars Piguet or Blancpain or some other brand.

    Personally, I avoid default choices. Whatever sells well is something I'll most likely avoid.

    And by the way, I have never bought a car because I managed to convince myself it was "better" than another one. My buying preference is not based on any such conviction. I just don't believe in that - I very much think different people will enjoy different things, and all the power to them. Finally, probably the most desirable cars in all of cardom are severely flawed in some way or the other when it comes to the practicality that characterizes the best-sellers. Whether a car brand does or doesn't meet mass market requirements is not a buying consideration that matters the least to me, that is for sure.

    Interestingly, it seems I tend to walk away from brands as they gather more market steam and success: I remember I really jumped through hoops to get my first 3-series ages ago - but then Beemers became omnipresent, and I haven't had one since, even though I know they are great cars. Same with Jaguar - as the S and especially X class started to make them more mainstream, I lost interest in owning a Jag very quickly - it had stopped being a bit of an oddball anglophile choice. And as great as Lexus cars are, I know I'll probably never buy one, because I simply don't find them quirky and entertaining enough.
  • pablo_lpablo_l Member Posts: 491
    Is the IS300 truly more expensive than a comparably featued C320? It would totally surprise me. I think every comparable Merc model carries a premium over almost each and every one of the true comparable competitors - what happens is that many people actually will compromise and get a more compromised car with the Merc badge. At least, that is my impression.

    And of course brand equity is money in the bank, and alows one to charge more. That is business 101, really. Many Merc models exemplify that to an extreme degree. But this is a segment where all offerings do that to some varying degree.

    As to car volumes, again, I am not sure how that proves the superiority of a brand. The best selling cars typically are insipid and bland.
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