james_san

As our family delaying the E350 purchasing decision to the '06 model, the Euro has been steadily climbing up. Do you think there will be a price increase? If MBUSA maintains the pricing scheme (or with just a bit of increase), will they use less-quality materials or to delete some previously-included options? How about the ML class where they are built in the USA?

Open for discussion.

F1Fan

ML probably won't be affected however it is possible due to the number of german parts in that car model. 05 E series (W211) was recently decontented, or removed of some features so MB could still make some profit without raising the prices. Material-wise it seems to have stayed the same. My guess is that they would not skimp on the materials since the cars are always compared with their competitors. But some of the fancy features might not show up in future vehicles. I would speculate that the current models including the next gen S-class is somewhat safe from any serious cheapening of the line. The dollar's weakness against the Euro only hurts Americans trying to buy foreign products. Conversly, it's probably a great time to buy American products in Europe now.

If you are looking into a ML, the next generation ML is due out some time next year I believe.

MBenzNL

the EURO is NOT climbing up...the USD is tumbling down...that is something completely different (yet with the same unfortunate results)

greetingz,

SAguirre

I actually took graduate courses in International Business and Economics in Maastricht (NL) Aachen (D) and Gainesville FL. While in Maastricht, we used VW as a case study. In the end, Mercedes is hedging between two markets. They really had a golden age before the Dollar went down the tubes recently. Like it was said, the Euro has more or less stayed the same, the Dollar has really suffered.

As mentioned above, something has got to give. Either features and options, or our price will simply go up. We all know the famous economic phrase “there is no free lunch.” The problem auto makers have is that some cars take a long time to go from the factory to the dealer’s lot. The window sticker is printed and then it is a hassle to change them, sometimes they do.

If you are delaying your purchase, you are assuming that all the market fluctuations are already factored in to current pricing (which is old now). Then, you are gambling that if the Dollar gains value that Mercedes will then lower the prices (not likely). During the recent boom years when the Dollar was strong, you might recall that Mercedes cars were selling at sticker (for the most part) and the dollar was giving MB great profits. American consumers were still paying top dollar because they could and wanted a MB. Unless you have been plotting charts and analyzing the world currency market, your delay might has a significant possibility to backfire.

When it comes to cars, they are a lousy investment! I would probably wait for the E350 simply because of the engine update, but not to save a few Dollars on speculation. Buy what you like and will be comfortable with. Your car will depreciate so much in the first couple of years that a few percentage points in exchange rates will mean nothing!!

I do not think that car pricing is dynamic; sticker prices are set for a while. Exchange rates change every second!

I stated these opinions with the assumptions that “all other factors are held equal” (c. paribus). Don’t hang me on what I said; I am talking simply from past experience and present opinion. I have not researched these markets in 4 years.

Hope this adds some perspective,

Steven Aguirre

james_san

Agree with you folks. Just a clarification that we are not delaying our purchasing decision because we are betting that the value of USD will stop erroding or starting increasing. We are simply waiting for the updated E350 which is also due for some minor facelift in the '06 model. We are just a bit worried how current developments in the foreign exchange market would affect the future pricing strategy for MB and MBUSA.

True we *should* buy what we want and what we like. A Merc commands a price premiem because of its reputation, quality, performance, status, safety....etc. and we are very willing to pay for those. However where does that line drawn? If MB decides that they need to maintain their margin by increasing USA-bound car prices by 8% and making some previously-standard items options, will the car still stand *that* much above its competitions?

Just food for thoughts...

SAguirre

There have been worse global economic problems that were survived by MB. As you might see on the History channel. Mercedes Benz was Adolph Hitler's favorite car. Every time he is driving somewhere you see that star on the hood of his car. If MB survived that image tarnishing, I think that they will survive things to come by competitors. I would not worry about it at all!

I would have waited for the E350, but I was forced on the car buying market when my 300E was totaled in July. I was not going to be back to only one car. My other car has 262,000 miles on it and I am beginning to think that I should not trust it (even though it has not given me any reason no to).

Look at us; we spend tons of time writing to each other about a bunch of metal! There is some intrinsic thing in this brand that we seem to like.

Steve A.