DerekACS

Ooops ! The figures I quoted were based on 'Desrosiers Market Snapshot' for October sales. There was no mention in this report that the Sprinters were included in MB sales figures.

Thank you for the correction ! But good that MB still leads BMW in Canada !

pamiboy

I agree with KA that maintaining brand aspirational value is more important than discounting to improve the sales numbers. I don't know why in US this seems to be the trend among luxury automakers but in rest of the world they aren't resorting to such tactics.

DerekACS

The reality is that the USA is the most competitive market for auto manufacturers in the world. This results in the lowest pricing of cars anywhere for many brands, including MB and BMW.

Many of the Japanese manufacturers (and now Korean) subscribe to the motto : "shower the market". They have successfully applied this philosophy to the marketing of electronics and automobiles. Toyota has been especially aggressive in chasing the Number 1 position for automobile manufacturing.

Other auto manufacturers have followed suit in chasing volume, the Germans being perhaps some of the last ones to do so. The net result is that there is too much inventory chasing too few buyers of luxury cars, resulting in deep discounts and incentives. The American buyer of German luxury cars gets the best deals on the planet !

K-A

The reason why I think (err, know, as it's already started) this will be damaging to the long term aspirational value of these cars is because nobody every wanted a Mercedes or BMW during their rise to grace, because "I can get a huge discount on them". If that was their motto decades ago, they would've never gotten to the level of cachet they have, regardless of product quality (let's face it, these days especially, you can get pretty cheap cars that offer competitive packages).

Of course, I understand the business standpoint. But I think their chase to volume won't benefit the quality or long term standing of these businesses. Especially if margins shrink, because historically, lower margin brands put out lower quality products (high margins when used wisely are supposed to be what fund products to maintain levels of superiority that lower margin products can't catch).

That's another reason why you start seeing brands like Porsche, Maserati, Rover, etc. starting to carefully expand into being a liiitle more attainable, yet without going too far. IMO, the trend in the automotive business might go toward Mercedes and BMW, and probably Audi being basically the German Toyota's and Nissan's of the future (at least in U.S, as they're practically that in Europe anyway) with a few high market, lower volume vehicles (there will always be an S Class selling in volume for one), resorting to increasing discount-brand tactics. Then Porsche, Maser, maybe even someone like Ferrari one day, trying to be what M-B and BMW were pre-2000's, like moderate volume brands that don't go after mass market consumerism in order to maintain their luxury and high margin status. Just a hunch. Put Tesla in that pile too.

Arrie

Simple reason for low prices in the U.S. market; U.S. auto makers. If the European cars were priced here as they are in Europe their sales would be next to nothing. Pricing would be close to twice of what it currently is.

But, they make tons of money selling them as it is here in N.A. market. Sales pricing basically is close the same as it was in Europe before the Euro. And they made money then too.

El Cid

[QUOTE=Arrie;6224138]Simple reason for low prices in the U.S. market; U.S. auto makers. If the European cars were priced here as they are in Europe their sales would be next to nothing. Pricing would be close to twice of what it currently is.

It's probably more the dealers than the auto makers themselves. The dealers need to sell lots of cars to make their profit goals-and to insure lots of high profit business for their service departments. Service is most profitable part of any dealership; new cars sales is lowest profit area.
Major part of reason for deep discounts on some luxury models is they are way overpriced to start with. Gives the dealer a lot of room for discounts.

ddeliber

+1 but to an extent.

Pretty much everything in Europe is more expensive. The consumer and business mentality is very different there. In the US consumers generally have more disposable income so they buy more toys but are not necessarily willing to spend more for their stuff/toys. Plus on the business side of things the mentality is more towards trying to sell a higher volume -> harder work but with that hard work comes greater rewards.

I know it sounds like a bit of a conflict, but that is just the way that it is. I guess it has to do with the capitalistic American way. In Europe, the businesses just need/want to make a higher profit per unit sold. Same for restaurants, to clothing, to household items. By way of example, In Germany and Switzerland a set of Henkle knives at a Henkle store (as well as a dept store) were almost 50% more expensive than the exact same knives at Macys. It is similar with cars or any retail item for that matter. The phrase "make it up in volume" just doesn't resonate over there for some reason. One would think that market forces would drive the prices down somewhat, but for some reason it just doesn't happen.

Having said this, I don't believe that American dealers are making as small of a profit as many people think. Simple math dictates that no business can keep the lights on let alone pay barristas, geniuses, detailers and sales managers on a $500-$1000 profit for a $50k item. Remember, this is retail. The invoice price is just a mythical baseline that dealers use to pay their sales team comissions and convince customers to part with their money. Sure billing is based on it as well, but the much more guarded sales volume/dealer bonuses offer significant discounts from invoice. Sure, they buy one at invoice price, but buy 50/mo get x back, buy 100/mo get y back etc. And x, y and for that matter z are bigger than they would ever want anyone to know. This is also one of the reasons why many dealers will go below invoice before published incentives on deals at the end of the month/year. Another is the unpublished dealer incentives or trunk money.

petee1997

The reason these premium brands have doubled their sales has nothing to do with discounting. What's an extra 5K discount on a 70K car? The main reason for high volume is low, low interest and leasing. Furthermore financing is available from some banks for as long as seven years. People are driving premium cars for 500 to 600 per month. Anyone can drive these cars but this phenom will not last forever.

Once interest rates go back to normal, residuals on leases will go down because the used buyer payment will be excessive. All these factors will cut into sales and people will return to the cars that will fit their budgets.

The people that can afford these cars will keep them much longer because of the high cost of trading. Besides the quality is such that a ten year cycle is very doable on a well maintained car.

In the next ten years many of the posters here will be on the Toyota boards.

Trancebolt

I drove a 540i 98 for my first car at 15, for awhile; Couple years... Maybe until around 17-18 ish. Drove a bunch of other cars incl acura and mazda, and have driven multiple MBs.


I own two of them and I can comfortably say the price had zero to do with my choice. BMW vs Mercedes is purely taste of style and taste of driving functionality. Perspective.


Many gentlemen made the obvious point here, a humongous drop in sales from one month to the next, can not be related to a tale of horror of a cars reliability of some flash-mob twitter style message spread about a blown up valve or something on all new models.... just not feasible;


It has obviously more likely something to do with an availability issue of course. I shopped every single car brand period. under my price range, above it and around 40k(CPO) is where I landed. Not because I had only that much or wouldn't drive a car worth less, but because the one I chose happened to cost that much. I LIKE the older models WAY more. This new space age styling is what got me to buy FAST.... cant get stuck with these minority report cars theyre making today


Cars are like computers, diff brands use same hardware, exact same models exhibiting ranges of different problems and positives....


Tires, Suspension, Shocks, brakes, steering mechanisms I mean god how much of our cars can be degraded by our own misuse, and most people will claim COMPLETE ignorance to their own involvement in its destruction....


Not to say there are flukes of horrible happenstance from any car.... took my boss to pick up his Toyota Avalon hybrid (service) and a gentleman there said a BRAND NEW Tacoma fully loaded needed two tranny rebuilds in the first 6 months. (considered a camry hybrid fully loaded (37k ish ) and those trucks they say are the most reliable and last forever...

champaign777

Same here
Moved from 2010 BMW 550i M Sport to 2010 MB E350 Coupe .
NEVER a new BMW for me , so much trouble ( but still own E39 just because its so GOOD car )

MBNUT1

I'd be on a Toyota board now if they made a car that drove like a Mercedes.

K-A

I drove a CLA and honestly can't imagine that there's a if not some Toyota/s out there that can't feel (inside) or drive better than it.

El Cid

I'm sure there are Toyotas, Nissans, Mazdas, Hyundais, etc. that drive like MB's. In many respects. The Hyundai Genesis is very competitive with "E" Class for instance.
As for CLA/GLA-lots of Asian cars out there that are very competitive-and have far lower maintenance costs.
Beginning to think that DAG should have created a new, lower cost make rather than creating (for US market) lower priced vehicles. Europe and US consumers have different mindsets about cars.
One of the things that contributed to Packard's demise was creating a mid-priced line of vehicles. Even when tried to change mid-priced to Clipper make, it didn't work. At one time, Packard outsold Cadillac. But with the mid-priced line, people no longer saw it as a prestige make and stopped purchasing the expensive models. Moved over to Cadillac or Lincoln.
BTW, the Toyota boards are BORING! Very little activity on them-not as much passion about the vehicles.

DerekACS

Surely, you are not serious about there being many Japanese cars that drive like a W212 ?!!!! For starters, the vast majority of Japanese cars are front wheel drive, whereas most MB models are RWD or AWD. Never mind comparing how their construction and quality of materials compares to an E Class !

As for MB diluting the 'prestige' of the marque in North America, if we follow your argument, then MB should give up not only the CLA/GLA (and presumably the A and B Classes too ?), but also their fleet of commercial vehicles (trucks, vans and buses). IMO, being the world's largest manufacturer of commercial vehicles does nothing to diminish the Daimler's world wide reputation.

Daimler's high volume of commercial vehicles has allowed them to bring down production costs for shared parts and engines that are used in their passenger cars, e.g. diesel engines. No other manufacturer comes close to MB's reputation for chassis and engine longevity.

El Cid

DerekACS: I did not say "many" Asian vehicles. Also qualified it by saying "In some respects."
As for commercial vehicles, that is a separate division of MB/DAG which is what I was saying to begin with.
They don't really use the same engines in commercial and passenger vehicles do they?

DerekACS

In the case of the 2.1L OMD 651- 4 cylinder diesel, it is produced in about 20 different versions for both front wheel drive and RWD/AWD applications in many different markets. Basically the same block is used for all of these variants, including vans and passenger cars.

MBNUT1

I think that it is great that Mercedes has been able to sell as fine a car as an E-Class for what it can be bought for here. It's a great bargain particularly compared to the new C-Class. That said I think the pricing of the new C-Class is an indicator of where things are going which is back to the more premium pricing.


Regarding Toyota's I drove a 2015 Camry Hybrid recently and while it is no E-Class it is very good for what it is.

Sportstick

And in other news, chocolate ice cream outsold strawberry last month, reversing the sales leadership of the prior month. Both chocolate and strawberry fans cheered for each win, but neither could explain why it actually mattered.

For the record and for whatever it means, we now have a mixed marriage, as shown in our garage.

pamiboy

Best comment so far. There's nothing more to this discussion.....

ddeliber

Same here! The best of both worlds. Oh, and I prefer coffee and pistachio, I don't like running with the crowd.

K-A

Seriously. Car enthusiasts arguing over car sales in a way to justify their purchases makes us not enthusiasts at all, but fanboy lemmings.

Ferrari sells barely anything every year. What a crappy company.

schorert1

these manufacturers put a huge premium on being number one in sales, as do manufacturers in every segment of the industry. So in late Jan this will all resurface again as MB announces they're number one in luxury sales (though all manufacturers are now marketing down to take buyers away from other segments).

I think comparing the month to month numbers is silly, but I'm curious about the years totals because MB is absolutely carpet bombing New england with ads and cheap money... if they don't see a benefit from it I'd be amazed. I probably see four different MB ads per day on tv.

I doubt Ferrari is worried too much about market saturation. On that same note, a luxury brand that sells the highest number of cars would by default be the most common?

schorert1

Or just steeper discounts/lease offers!

K-A

Yes, MB has been going insane with the ads and incentives, more than any make I've seen. IMO it's annoying and overdone, just gives a classless image (they aren't all that tasteful either, just mass consumerism pandering and very unrepresenting the advertised models in many cases).

So while I wish they wouldn't at least give the image that they so desperately care, to maintain the type of image that made them aspirational to begin with; indeed, if they don't take top seller easily, it's a sign that something is wrong (because they're trying so transparently hard to now be a highest volume seller within their respective industry segment). Also, MB has a larger lineup of cars than any competitor, which makes their whole approach extra regressive, imo (having the largest lineup didn't work for years, so they just dilute with more and more? Then throw ubiquitous ads and fire sale lease discounts at marketed prestigious cars for good measure?).

They'll get sales up, they'll have to, but IMO the cost isn't worth it. IMO they'd be better off at cutting out the excess fat, discontinuing some dud models, getting margins up, and reinvesting that to make future models bar none best in class in nearly every metric. But of course, that's a long term approach and right now it seems unfortunately Daimler is pandering hard to investors, who are naturally short term minded.

Out of the "Big 3, Audi seems to be handling this the best. Their growth is high, their brand image in a premium element growing while MB and BMW's more likely declining to at least many enthusiasts. They purposefully don't incentives leases much so they culture buyers who can actually afford the cars, and probably more who find them worth actually buying. The result as studies have shown is Audi growing in every metric of brand perception AND numbers. Imagine that. They also apparently have the wealthiest buyers out of those 3 now. How quickly did that happen? In Audi's situation, being within a larger group of personal style vehicles has helped them.

MBNUT1

I think that in fact where things are going. IN the case of a C it is an American built car after all and should be priced accordingly.