MBNUT1

The flaw in this argument is that Audi isn't really building a better car. Just because a Mercedes is a better deal doesn't make it a worse car. The reason Audi is growing in perception is that it is building a good car but it also started out from such a low relative point. Mercedes on the other hand has had no where but down to go on a relativistic basis given that they were far and away the best.

K-A

Audi has grown to higher worldwide sales over Mercedes, with a considerably smaller lineup (not sure if M-B has caught up yet, but it was a huge fall-behind as Audi being much less versed and smaller passed them).

I think one of the reasons that is improving Audi's appeal is that they don't resort to such discount-brand, mass-volume tactics and let the products speak for themselves (at least in USA). It's one of the reasons why they're leading the way in aspirational-value with the new generation. People who grew up with M-B's and BMW's of yonder, didn't remember them leasing for economy car prices and making mockery's of their own MSRP's by way of desperate pleas to get people into showrooms. If E Classes, or 5 Series', etc. are being discounted 20%, that means that the market values them much less than the manufacturer originally did. And if Audi's are getting nearer to MSRP and not considered primarily rentable, then it creates a higher perception of the product (i.e while they may be priced similarly, Audi is selling for higher, and probably has a higher buy-ratio, meaning that the market values the products at a higher price and finds them "worthy of buying"). Perception sometimes rules the market.

Of course, if BMW and M-B didn't have to meet such sales quotas in the U.S, they probably can discount less and raise the market-perceptible value of their cars as well, so the whole situation is obviously fairly complex, i.e different business models also contribute to the perception and prestige of the brand and cars, etc.

I agree that Audi doesn't generally make better products. But their perceptible growth is rising much higher than the other two. For the reasons you mentioned, as well IMO as how they don't seem to "dumb down" their sales tactics as much, at least not in the U.S. Basically, it's a tool to build cachet (one that Mercedes and BMW used to dominate).

Trancebolt

BMWs have just ad many ugly irrelevant garbage extra models as benz does now. So does Audi:Volkswagen.

K-A

Lol. Yes, M-B and BMW are both seemingly in a race toward ugly irrelevant garbage models. That's actually one point toward Audi: They don't "need" to put as much garbage under their brand name as they have VW to take up the brunt work. The VAG empire has proven a good place to be for select car makers.

Germancar1

Serious question, why do you keep repeating this? You don't you get that Audi still sells previous generation models in China and that they have cars like the A1 that Mercedes doesn't even compete with? For the few sales that Mercedes gets from a SL or S Coupe, Audi more than makes up the difference with cars like the A1 and previous generation cars (like the A4) that they still sell. Outside of some very low volume models, Audi and Mercedes are evenly matched across the board. The SL, G, and S Coupe are about the only models that Audi doesn't have a direct competitor for. Those MB models don't sell in such numbers to where Audi is at a disadvantage sales wise.

M

K-A

Fair points. I usually use that argument vs BMW (which I think is more accurate there). Audi specializes in lower priced cars vs MB, though in the U.S I wouldn't be surprised if they hold a higher transaction price.

Germancar1

Here is the latest, it isn't close. Audi still doesn't move anywhere near as much at the top end as Mercedes does and it reflects in the ATP:

"Audi bested Mercedes and BMW in one more category last month. According to the Kelley Blue Book, Audi’s average transaction price rose 0.8% in May to $51,696. Mercedes’ fell 0.1% to $58,669 between the two months, and BMW’s dropped by 2.3% to $52,104."

http://247wallst.com/autos/2014/06/0...cedes-and-bmw/

Mercedes just kills it in the U.S. in this regard. BMW and Audi just don't have the top end sales. Mercedes unlike Audi and BMW are expanding both both ends. CLA, GLA and then the S which sold over 2500 units last month. Mercedes has the right approach IMO. AMG GT coming as is the Maybach S600 and the S Cabriolet. They aren't just expanding at the bottom like you keep saying.

M

K-A

I should've clarified that I think Audi should have higher transaction prices per segment (maybe not counting the S Class, etc. class/es). Is that study based on MSRP or actual price after discounts? I know that the A6 sells for considerably more than equal MSRP E Class or 5 Series as they just don't discount them so much and most of all don't push you to lease with ridiculous discounts and artificial residuals (they lease basically un-incentived, at least relatively speaking). I gotta say that I respect that and I think its gone a long way into building Audi's brand cred, especially to the younger markets. And I'm by no means an Audi lover. I'd still choose a BMW or Mercedes probably, though if I was staying in this segment I'd probably pick an S6 over an E or possibly even 5 equivalent.

Someone elsewhere cited some study that stated that Audi buyers are the most wealthy out of the "big 3", wonder if that's true, but I can believe it.

Germancar1

These studies are based on average transaction prices, i.e. what the average price is paid for the car, period. Discounts, region and everything is taken into account. It is the average price paid for the brand. I know you think that everyone buying a Benz gets a huge discount, but it simply isn't true for everyone or every buyer. Thousands buy not knowing they can do better, i.e. people that don't post here lol.

I doubt it because of the more variants that MB and BMW has. The E Convertible for one sells pretty good and does so with out the level of discounts that the plain Jane E350 sedan does. I especially doubt it with the A4 vs the C-Class, especially the new one. S vs A8 is no contest, Benz kills Audi and everyone else in that class with an ATP of 95K.

There might be a segment or two where Audi is equal but I seriously doubt that they have a higher ATP in any segment over BMW and especially MB since MB usually has a higher priced variant than Audi.

I saw that wealth study also, a few thousand more earned per year is much ado about nothing IMO. These are all the same buyers. The biggest differences are between the Germans and say Lexus and then further down Cadillac.

M

K-A

While I think that MB are expanding downmarket in a more "trashy" fashion than BMW with already multiple FWD models with imo no redeeming qualities (checked out the GLA, truly find it reprehensible), BMW are letting their seeming too-short-term-shareholder friendly new approach get kind of dangerous to their brand appeal.

While I think Mercedes are expanding too much period (bottom AND top, it just leads to dilution), at the very least they are trying to balance it out (again, I still think they should kick back as it's relatively long term damaging). BMW are just putting out profit centers right now. MB is being a little more strategic. BMW is already getting a fallout by enthusiasts and that's never a good thing, as companies always eventually realize and about-face, then come begging back.

Germancar1

You do know BMW has a FWD minvan coming and a FWD 1-Series sedan coming right? They are no different and they dropped the ultimate driving machine title years ago. Lexus, Audi and even Cadillac have beat them at dynamics over and over. At least IMO Mercedes is returning to luxury and with great results, C and S. Yeah the CLA and GLA are a unfortunate reality, but MB realized that they can't beat BMW and Audi in sales by just selling C, E and S and high end SUVs. Cost of business I guess. I'm sure the next generation models will be better.

What I don't get is how you could think that bringing out a new 200K limo and a high end Cabriolet version of the S are going to dilute the brand, those are the segments that Mercedes should be competing in, wheel to wheel with Bentley. Does wonders for their image.

M

K-A

Cost of business is right. Unfortunately it generally spoils the experience of these brands for me, as somewhat of a purist enthusiast I guess, but as long as the products hold up to the brands core virtues (certainly the FWD Benzes don't, and FWD BMW's are bigger blasphemy) I can look past it to some extents.

Yes, agreed on BMW which is where I note the fallout from enthusiasts. Though I do think that right NOW (before the FWD Bimmer's come out) BMW is doing it more right with the 320i rather than a CLA competitor. As it was noted in a test that it won where the CLA came in last; the 3's RWD chassis and nature kept it in a different league from the MB (and with less product saturation), yet I believe it is more expensive....

The upper MB's are not an issue yet. Right now the upper expansion is good as it's necessary to keep up with downmarket expansion. But I mean that since they seem the most overzealous in expansion, there will be a tipping point if they keep pushing. IMO this should be the limit, and the rest just perfecting all the existing lines. The upper cars should remain concise as well, I think they've got that area well rounded after the "S Maybach" and AMG GT.

On the other hand, BMW is just looking like they stopped having fun. They need some passion projects. MB at least seems aware of the repercussions of becoming too much of a "bottom line" brand.

Germancar1

I dunno man, I think you're going to miss out thinking that way. When me and friend drove/rode in the S550 Coupe a few weeks ago, the CLA was matterless and judging by the sales numbers most buyers feel that way. You do realize that all these same concerns have been around since the 190E was introduced in 1983. People said MB was lost. I've always maintained that as long as Mercedes isn't defined by a car like the CLA or GLA they can get away with this, especially since they've dramatically increased the premium content and presentation of the next model up, the C-Class. Mercedes has the deck stacked with premium vehicles that far outweigh them selling the CLA and GLA. Most will see the GLA and CLA for what they are, shameless ploys to gain new and younger buyers, but they also see that stunning S550 or GL63 or SLS or SL65 or E63 on the same showroom floor and the GLA and CLA become matterless to the overall brand. Mercedes will never be known for a car like the CLA or GLA. Anyone that knows Mercedes knows they aren't what has defined the brand for the past 120 years.


BMW has bet on their i brand to be their edge, the i3 and i8 are selling ok I guess, haven't really checked and it's early, while Audi and BMW don't have anything to really answer the i brand. Mercedes would be wise to use their relationship with Tesla to do a shared vehicle that is a dedicated hybrid or electric IMO.

They both will have to deal with the billions upon billions of dollars that the VAG group has to leverage though Audi. The tech they're introducing in their latest prototype and concept is staggering.

M

K-A

That's one area where Audi can really use to their advantage, if they play their cards right. Being under the VAG empire can (already is) prove to be a huge benefit as they don't have to be as desperately singularly viable as Mercedes and BMW (and I do really think that the effects of that are largely what are contributing to their rapid rise in brand cachet). Apparently Porsche is going to be tapped to make the chassis' of the next A8 and various other VAG sports cars and maybe uber luxury cars. I've heard that this has caused internal conflict as Audi feel the deserve to build their own chassis', but if it all goes smoothly and wisely, VAG cars can benefit from focusing on what they do best while not having to resort to such shameful tactics (such as Porsche having to release an originally intended VW like they did in the 80's, etc).

I get the business apparent necessity, but strictly speaking by numbers, MB will be selling a much higher average of cheaper cars in the future than upper cars. I can see them being looked at as less of a strictly premium brand if it goes too far (talking many years) especially to younger generations, and more of a mass volume one with some high end cars. A lot has to do with how their newer upper range models do, thus last in the market. Right now everything is so and new and experimental it's hard to tell.

I saw the new S Coupe as well, actually seen several on the roads. Kind of perplexed by it, sometimes it looks majestic, sometimes it leaves me a little cold. The front 3/4 while driving view is something to behold. The rear I think is not good at all. The interior is very nice (and extremely cramped for my height which is frustrating) but the all black color just didn't bring it the opulence I think the interior has within it (it's a luxury interior more than a sport so all black doesn't serve it so well). Walking around it, I guess "perplexed" is the best way to put it, i.e mixed emotions with some lacking emotions. They had a CL right next to it, and while I won't say it's nicer, there was something "grand" about it.

Sat in a CLA next, and indeed, obviously on a much different level. Though I will say that I HAVE mistaken a CLA for an S Coupe from the front (initial look had me think it's the Coupe, then when size finally registered and the sides came into focus, obviously realized it was the CLA). IMO their exterior cues are very similar.

The C I agree is a smart step up. And expensive too, but we'll see if MB start to take it to even more insane levels of necessary discounting than they have with even the W212. I've seen several and sometimes I think it looks absolutely awkward, weird and terrible, and sometimes I like it fine. But looks are all subjective. It drives like like a fine Mercedes, not what I'm looking for but is comfortable commuter car, the interior is class revolutionary and brings back old world MB ambiance with no shame.

BMW is doing a smart, future-proof and serious (and risky) bet with the i8. And I agree MB needs to get serious there too. But I don't know if their ties are strong with Tesla anymore (maybe because they want to compete) though Tesla opened their patents anyway. But BMW can use to have some more fun than the future cars and X derivatives. MB are tactful in going strong right now with the upper segment stuff. We'll see how the CF heavy 7 Series is. It better be segment leader for BMW's sake, even though the 7 isn't as important to the brand as the S is to Mercedes. I don't think it'll have a problem in the dynamics department if rumours hold any weight. If it can get some bespoke styling then that could really give it a leg up this gen as I'm noticing even guys on the W222 forum talking about their S's giving a sort of a passive or "larger C Class" presence.

The AMG GT I think is the nicest MB to come out in a while. But I think the imo aping of the 911 rear portion is shameful and Jaguar must be pissed that MB are imo invading on their stylistic turf as well. The proportions are almost comical with the insanely long hood and backwards cab, pushing the limits there. But the car's got me curious. This is where BMW aren't delivering.... "fun" cars that don't make sense to the bottom line, and it's helping MB balance their image.

Anyway, that's my take on all of it. Things should play out interestingly.

Sportstick

A small comment on your larger discussion. BMW actually does have a direct CLA competitor in addition to having an entry level 3 Series. If one is not restricted by door count, as I was not, thereby allowing for cross-consideration and competition, the 2 Series is priced and sized similarly to the CLA. Having reviewed the options among CLA, Audi S3, and 2 Series, I chose the 2 for the fabulous dynamics and manual transmission, sacrificing the rear doors. As the 3 became "too Mercerdes-like" with a softer, more isolated feel, the 2 has been very well received as the spiritual flagship of the BMW brand, winning Top Ten from C&D and All Star from Automobile, displacing the 3 (in both, I think). Other than interesting design, the CLA falls so far short in this segment in this 3 way competition. If the S3 had a stick, it also would have been a preferred choice. For those who used to appreciate more BMW models, one can only hope, as C&D suggested, that future vehicle (such as on the upcoming 35UP Platform) follow the lead of the 2, just in a larger size. Their latest round of holiday tv ads certainly focus on the "Ultimate Driving Machine" position. They just need to realign the higher series products to fit the statement again.

El Cid

MB does have the "A" and "B" Class cars that are sold everywhere but North America. To some extent, DAG (MB) still relies on sale of Smart cars as well for this niche.
I do think one thing that contributes to Audi sales increases is many dealerships are joined to a VW dealership and this helps their pricing. Not to mention, someone goes in to check out VW and sees an Audi he/she can get for a little more per month. Of course, they are also producing some excellent cars with ever increasing reliability.
MB has always had a large range of very expensive cars and the "S" Class has been around a long time in one variation or another so MB is not expanding its higher end lines. AMG is now a division of DAG/MB, but it has been around a long time with direct DAG cooperation and support.
"What I don't get is how you could think that bringing out a new 200K limo and a high end Cabriolet version of the S are going to dilute the brand, those are the segments that Mercedes should be competing in, wheel to wheel with Bentley. Does wonders for their image." That was rationale behind the Maybach brand. It was only a couple of years ago that DAG gave up on the Maybach Rolls Royce/Bentley fighter after billions in losses. They are bringing the name back as a more upscale, luxurious version of the "S" Class.

beshannon

This was not my experience when recently shopping for a new car back in June.

Germancar1

I know the A and B are sold elsewhere, neither of them are micro cars like the A1 so I don't know what your point is in mentioning them.

The S-Class line is indeed expanding, there hasn't been S-Class based cabriolet in many, many years, that is clear expansion to fight Bentley. The Maybach S600 is also a new vehicle. The Pullman is not.

Everything else you mention is already widely known, not sure what the point of mentioning it is.

M

Germancar1

Yeah it is just pure speculation, I just don't see it that way when they're making the every other car they have outside the CLA and GLA the luxury choice in every segment. The next E will up it's game greatly if the S and C are any indication. The GLA and CLA won't outsell their entire upper range and even if they did, those upper cars are still there and are no less awesome because of that.

M

Airmousam

Great thread!

Wig

I agree Audi appears to be growing, but I'm not sure which models their growth stems from.

From my observations on the road (and not actual stats) the only vehicles Audi sell in large numbers are base A4s and the Q5. The Q7 seems also seems to be fairly popular. There are very few A6s and A8s, and their other models are largely invisible.

The much praised A6 doesn't seem to translate into sales.

K-A

That's a good point. IMO this is an exact, perfect example of where BMW is keeping it "real" and Mercedes is going full bottom line (an opposite of what they're doing in the top range, as I pointed out before). The 2 isn't gonna be a volume seller, it's sort of a niche car. But it's RWD, and probably the most BMW of all BMW's out right now. While the CLA has really no Benz-esque redeeming qualities, but is made as a way to perfectly pander to volume sales. This is one reason why I think that expanding at the bottom for BMW is less "dangerous" while M-B still struggles to find ways to give their lower cars any said redeeming qualities. Therefore M-B starts pushing harder at the top to counter (smart and necessary given the circumstances). BMW seem to find it unnecessary to push so hard at the top, probably for these reasons.

Once the BMW FWD comes out, which is going to be a sad day, we'll see how far they go with the dynamics to hopefully at least give it some reason to exist, aside from being a volume panderer.

True about the A & B. I know BMW doesn't nor do I think Audi do (?) have specific "Taxi Vans" or whatever you want to call the, which is a huge benefit to M-B sales worldwide (and makes it even more curious as to how they got passed by both, clearly the A/B weren't enough).

IMO M-B needs to be careful in expanding too much in the upper range. You're actually right in that it isn't that much different. They always had the "CL", they used to already have a Maybach (not a Mercedes, but we all know it was), they have the SLS which I believe the AMG GT will replace (and those are specifically AMG models). I think M-B is handling the upper range "expansion" well right now as it's very slight, yet purposeful. They surely don't want to have too many upper range models sitting around dealer lots, which IMO means that they will hopefully control the lower range models to restore proper balance.

Which model was it? The example I mostly refer to is the A6. An example of my observations: On the 5 Series boards, there started a trend when the new A6 came out, as when people were asked "Why didn't you choose the A6", there were tons of answers that said "Because it's too expensive to lease/they didn't discount/no incentives/etc.", and then those lines were followed by "If they did, I probably would've gotten it". It's like you can see how that alone pushed people to think of the A6 in a higher light than the 5 Series. I.e: "I was simply shopping it for quotes, but once I realized that it's out of my reach and priced above the 5 even though similar MSRP's, I wanted it". That's definitely leading to a heightened brand cachet. People caught onto that and started saying "Since when was getting a BMW done because it was more discounted or cheaper, therefore 'settled on'". You could see Audi's brand perception rising right there. Sure, people were "settling on" the 5, but Audi was getting a more important metric, which is cachet factor, which translate into $$$$ in one way or another. Of course, having the VAG umbrella, they seem to be able to be able to keep a longer term vision like that, as M-B or BMW could never in this day and age sacrifice even a month of sales to focus on building cachet/desirability by way of decreased discounts or volume pandering.

Not sure about other Audi's, in terms of discounts. I imagine the aging A4 should be easy to get for "cheap". I haven't looked into what the A6 is going for these days.

Yeah, there aren't many Audi's that I see "everywhere". A4 obviously, but of course nothing near the 3 or C in the States (in Europe, you see Audi's EVERYWHERE, black A4's, A3's, Wagons, etc.). The Q5 is probably one that I notice as most ubiquitous (maybe just because it's more noticeable).

A6 is quite a rare sight. That actually helped made me want it (with "S Line" or better yet, an S6), as you see 5's and E's everywhere, it kind of hampers the specialness if you're an enthusiast (at least to me). There's someone who parks next to me now that has a black 5 that also has M Sport, lol. But I just can't sit in an A6 and feel that it's more special than the two competitors. On the other hand, the S6 imo looks (maybe partly due to rarity) and feels more special than any non-M or AMG 5 or E, but it's expensive for a car that you don't have a passionate connection to.

El Cid

Actually, as you say, Audi does not have the super high priced cars that MB does, so being only $7,000 shy of MB's Average Transaction Price tends to show that Audi is doing quite well and on target to do better than MB in the markets where they do compete. Mercedes is not "killing it," but rather fighting to maintain its share of the market.
The thread is about whether or not MB is losing sales to other makes-and it probably is.
Very few MB dealers are going to make it on CLS, S, AMG and SL sales alone. But they also need to make sure that the people purchasing an MB vehicle view it as worth the price paid and a lot of that relates to the status of the Star on the front.

Germancar1

Mercedes stomps Audi and BMW at the upper end, if you read the post. Who said anything about MB dealers making it on just CLS, S, AMG and SL sales alone? Do you know what you're talking about? Seriously, you sound confused. No where did I state that dealers would need to make it on just those sales alone.

You're right, Audi is doing quite well. MB's ATP has come down and Audi's has come up, now what ATP has to do with who has the most market share is beyond me. Confused again, two different metrics.

M

Germancar1

Last month it was Q3, A3, Q5 and Q7 that did the growing for them, everything else was down.

YTD it is the Q5, Q7, A6 and A7 and of course the new cars: A3 and Q3 that are doing the growing for them.

http://www.audiusanews.com/newsrelea...s-record&mid=1


M