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Old 02-25-2004, 07:48 PM
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rant on brand erosion

A friend sent this to me a few weeks back. Reflects many of my own concerns...

From autoextremist.com, here's the first half:

-----

Brand Erosion Hell: How To Tell If Your Favorite Car Company Has Started To Lose Its Way.

Birmingham, MI - Following-up last week's column about the importance of brand image in today's cutthroat automobile market, I thought it would be a good idea to provide a handy guide for automakers and auto enthusiasts alike - so that they can tell when their favorite brand has started to lose its way.


Last week, we sent several Honda and BMW zealots into apoplectic fits because we had the temerity to criticize their favorite car companies in our "On the Table" column. We stand by our criticisms of those two "sacred cow" brands, however, because this business of protecting brands is such a fragile endeavor that even the smallest of missteps can end up derailing a so-called "bullet-proof" brand down the road - even if their current lineup of cars seems to be stellar. I will say that I lumped the BMW 1 Series in with other recent BMW atrocities, and that wasn't accurate or fair. If anything, the 1 Series is shaping up to be the first authentic BMW in years - that is if Helmut Panke and Chris Bangle and Co. can restrain themselves from screwing it up.


So, how can you tell if your favorite automaker has started to lose its way? Well, sometimes it's obvious - whether it's major product gaffes or playing in segments that the automaker doesn't really belong in or fire-sale prices, the big things are easy to see. But other times it's the "little things" that are harder to see and that pile up over time until, all of a sudden, the attitude of "good enough" has replaced the old way of going the extra mile to make things right - and then slowly but surely, little bits and pieces of brand character end up falling by the wayside.


Here are a few examples...


1. If car company executives seem to be spending and inordinate amount of time justifying their actions, that's your first clue that something's wrong. We've seen it countless times since we started this publication (and long before that in the ad biz - ed.), but usually, the more car companies blather to the media and to everyone else about "getting their story out" and the more defensive they get about certain aspects of their new products - it's because there has been an inexorable shift in the wrong direction. For instance, the moment Chris Bangle unleashed his "vision" for BMW's future design direction, BMW executives were put on the defensive at every auto show and at every media event they attended. All of a sudden, the traditional traits that made BMWs so attractive - the inherent goodness of the handling, the sweet motors, etc., became an afterthought. All because BMW had departed from a logical, evolutionary design sequence - in favor of a jarring exercise in visual excess and unabashed

2. If an established luxury brand all of a sudden feels compelled to become more "approachable" - watch out. At certain times during a luxury automaker's life, there always seems to be a point where a really bad combination of doubt and greed sets in - and heretofore well-meaning executives get it in their heads that if they extend their brand downmarket just a little bit, huge profits await. The problems begin when they actually start talking themselves into believing that these forays into new, lower price point segments can't possibly have an adverse effect on their brand images. And they would be dead wrong for believing that, too. You only have to look at two brands that have embarked into territories where they don't belong - Jaguar and Mercedes-Benz - to see what I'm talking about.


The X-Type has been a disaster from the get-go for Jaguar - no matter what they say to the contrary. The official Ford/Jaguar company line is that the X-Type has accomplished what they set out to do - which was to bring younger buyers into Jaguar brand consideration. The reality is that since the X-Type's very survival in the U.S. market is solely dependent on heavily-supported factory leases, the car has taken the Jaguar brand off of its pedestal and plunged it into payment hell - cheapening the brand in the U.S. market immeasurably. And it's really too bad, because the new XJ8, on the other hand, is a superb car. But when Jaguar is having to shove X-Types out the door with tainted, distress-sale lease prices, while at the same time telling customers that the new XJ8 is worth every penny - a giant disconnect occurs. And what message does that send to the customer, exactly? That some Jaguars are better than others? Probably. Or worse - that some Jaguars aren't "real" Jaguars at all - and those are the on

As for Mercedes-Benz, some M-B purists will argue that the last great Mercedes was the previous S-Class, that everything since has been cheapened or corrupted by technical and electronic overkill, reduced build quality and poor reliability. And I'd be hard-pressed to argue that point (except for the AMG cars, which are still worth owning). But for me, the moment M-B really lost its bearings was the decision to introduce the now infamous C-Class Coupe - a car that featured a retail price of around $26,000. Overnight, M-B dealers found themselves having to sell these cars against loaded VWs - and any shred of "specialness" attached to the Mercedes-Benz brand literally went right out the showroom window.


Seasoned German auto executives will tell you that Mercedes has always played in a wide range of segments back home and that it shouldn't be such a big deal for M-B to play in a wide range of segments in the U.S. But that logic falls apart when you take into account the image that had been pounded into the American car buyer about Mercedes up until about ten years ago - and that was that Mercedes-Benz cars were "engineered like no other car in the world." Not only did people really believe that about Mercedes - the cars seemed to live up to that reputation, even if they were a bit stodgy.


But when Mercedes-Benz shifted their brand image strategy from one of "technical superiority" to one that revolved around the concept of being "more approachable" in the marketplace, they began a downward spiral that they've yet to pull out of. It didn't help, of course, that the cars seemed less solid, featuring cheaper-looking interior materials for the first time, while suffering from the same German predilection for electronic overkill that plagues BMW.


Despite the current sales numbers and an attitude emanating from their U.S. and German executives that everything is just peachy with Mercedes-Benz, this brand remains as the most classic example of brand erosion in the market today. And I've yet to see any evidence that they a.) get it, or b.) are taking steps to do something about it.


3. Yes, as a matter of fact, in the car business, it is about the "little things." Several years ago, Honda redesigned the front suspension of the Civic, replacing a classically elegant "wishbone" design derived from traditional racing car practice with a cheaper, lowest common denominator McPherson strut design - typically used in more mundane econo-cars. Honda executives breathlessly described (see point #1 above) how these struts wouldn't compromise the Civic's sporty character and said that basically people would not only get used to it, they wouldn't give it another thought after they drove it. But Honda purists went ballistic - and justifiably so. Here was Honda, which built its reputation on building brilliantly innovative racing motorcycles and eventually with creating equally brilliant championship-winning Formula 1 engines - not to mention an impressive array of creative street machines - "copping out" by opting for a cheaper, less creative suspension design to save money. It was

But it remains a significant development, because it seemed to be the "tipping point" from which the Honda brand began a gradual walk away from its previous reputation. No, it did not mean that Honda started churning out inferior products overnight (the S2000, and Acura TL and RSX remain some of our favorites), but it did alarm the Honda purists for all of the right reasons. Where else was Honda cutting corners? What other pieces would Honda determine to be "good enough" - when its previous stance would have never allowed such calculated mediocrity? In short, what else was Honda not doing that they used to do on a regular basis - the things that made Honda, well, Honda.


The Honda Motor Company that was on display at the media conference at the Detroit Auto Show earlier this month was simply not the same car company that once was. Instead, we saw a car company wallowing in "me-too" SUTs, while using a gimmicky robot to represent Honda's creative research into mobility. The previous Honda - that innovative car company that once wowed the rest of the industry on a regular basis, was nowhere to be found.


Now, Honda finds itself being attacked on all fronts by innovative car companies that haven't yet yielded to "good enough" thinking - ones who still believe that the "little things" are absolutely crucial when it comes to brand integrity. Something Honda has either forgotten or at least misplaced, apparently.
Old 02-25-2004, 07:48 PM
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And here's the second half:

---

Creating a brand image in the car business is an exceedingly difficult endeavor - even when a car company has all of the ingredients in place. It can take literally years to get it right. And yet, maintaining the right brand image "formula" is like juggling a volatile and unstable mixture - and it becomes an endless, day-in, day-out struggle to protect the integrity of the brand, especially with the kind of sheer inertia that these car companies operate under.


That's why when BMW got off track with its Bangle-ized design language and its obsession with electronics - to the detriment of the brand - it's folly to suggest that these missteps won't matter. Yet, when you listen to BMW executives like CEO Helmut Panke, you can tell that they're scoffing at any suggestion that they have somehow lost their mojo and insisting that absolutely nothing can derail them from keeping their title as one of the most sought-after brands. But I argue that it has already begun for BMW, that the slow but sure erosion of BMW's brand image is well under way. BMW will have to stop being obsessed with sales numbers and start worrying about the authenticity of their cars before I believe that they understand what's happening - and what needs to be done to stop it.


BMW's big problem is that they've forgotten who they are. They've gone from being the thinking-person's sport sedan to becoming almost a caricature of themselves in the marketplace. Bloated, terminally electronically-assisted "luxury" cars have nothing to do with BMW's brand image. We'll have to wait for the 1 Series to see if they can get back on the right track.


Half the battle for a car company in creating a brand image is knowing who they are and what their brand stands for - or at least what they'd like it to stand for.


Honda's problem is that they've forgotten who they are. Or maybe it's that they don't want to be who they once were anymore - they're more comfortable with aiming a little lower. After all, mediocrity is bliss for a lot of car companies. It's a lot easier to be a "me-too" car company than to live up to a past reputation.


In Jaguar's case, it seems to be intent on trying to be something it's not - which is a manufacturer of "near-luxury" automobiles. That's not brand erosion - that's brand delusion. People want beautiful, elegant and even fast Jaguars. They don't want Jaguar poseurs running around, "faux" Jaguars with similar design cues but with none of the substance of a proper Jaguar. Why is that so obvious to everyone but the Jaguar brain trust?


And Mercedes-Benz actually believes they can do whatever they want in the market and it will work out. They remind me of the "old" GM - a company that acted like the world still revolved around them a good 15 years after that ceased being the case. There's a whiff of arrogance hanging from every communication and statement emanating from Mercedes-Benz, and it's still obvious they believe that they can enter any segment without impunity - and with no brand erosion to speak of.


But they're flat-out kidding themselves.


There's a time lag at work here - in that a car company's bone-headed moves have a cumulative, negative effect. Mercedes-Benz has now been mired in poor quality ratings for three years running. They have unleashed a series of very "un-Mercedes-like" cars that have neither the presence nor the street "cred" of their previous cars. In the midst of straining for more sales volume, Mercedes has eroded its brand equity by building more vehicles that seem to play to the lowest common denominator. And now, the biggest sign of real brand erosion for Mercedes? Their resale numbers are spiraling downward.


In other words, Mercedes-Benz has forgotten who they are and what got them to this point to begin with. It's not brand erosion in their case - it's more like brand implosion.


This industry is littered with car companies that have been doomed to Brand Erosion Hell - to the names mentioned above you can add names like Buick, Chevrolet, Ford, Pontiac, Saab, Saturn, Porsche and a few more. At one time or another, they either lost it, found it or couldn't find it if you laid out a trail of bread crumbs to help them find it again.


And all of these auto manufacturers that have found themselves in Brand Erosion Hell share the same basic things:


Either they forgot who they are, don't remember who they are, or can't, for the life of them, figure out who they want to be.
Old 02-25-2004, 09:54 PM
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Very good article. Unfortunately I agree with the stuff said about Mercedes-Benz.
Old 02-26-2004, 10:39 AM
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I agree with Noble, however there were somethings with the article that quirked me. Specifically that Mercedes can't enter every segment. Oh but they can. They have, and they are creating even more segments to enter a la four door coupe (CLS) and the elongated roadster (CL).

Porsche had to create a Boxster for it's survival, and then the Cayenne for the same reason. Why blame them for brand erosion when they are just a company trying to survive?
Old 02-26-2004, 03:10 PM
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hey guys,

like most industries the automotive industry goes through its changes as well. in some ways MB's are better than they were 20 years ago and in some ways they are not. imho i feel MB is better today than it was even 10 years ago. i don't ever remember a time that MB's were considered faultless. i've always been under the impression that german autos were particuar but very advanced machines. at times i feel that there is some nostalgia in peoples minds that bring them to the conclusion that MB's are not what they once were. MB had to change to survive and also to please the market place. even through the past 20 years MB with all of it's short comings is still considered to be the premier auto brand. that's notto bad with all of the competition and the changes that have occured in global business.
Old 02-26-2004, 05:38 PM
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Originally posted by S55inPA
hey guys,

like most industries the automotive industry goes through its changes as well. in some ways MB's are better than they were 20 years ago and in some ways they are not. imho i feel MB is better today than it was even 10 years ago. i don't ever remember a time that MB's were considered faultless. i've always been under the impression that german autos were particuar but very advanced machines. at times i feel that there is some nostalgia in peoples minds that bring them to the conclusion that MB's are not what they once were. MB had to change to survive and also to please the market place. even through the past 20 years MB with all of it's short comings is still considered to be the premier auto brand. that's notto bad with all of the competition and the changes that have occured in global business.
I agree that MB is still considered the global leader, but I wonder if that's mostly because of the reputation it built up in the past. The industry is changing because of all the competition that's out there and the growth in the numbers of people able to afford these luxury marques. However, I feel Mercedes built its name on luxury, safety, and reliability. Luxury seems to be going downhill and reliability is clearly a problem nowadays. The latter problem is usually attributed to the technology they're trying to cram into these machines and the lack of QA testing. The problem I see is that to remain "luxurious" many automakers feel they need to pack all the latest technology into these cars, but then they, like MB, neglect to make sure everything functions as it should.

Anyway, I'm definitely worried about where MB is going. Cadillac was the undisputed leader up into the 70's, and relied on their name and reputation without responding to market forces. The same thing could easily happen to MB if they don't improve their cars...
Old 02-27-2004, 07:50 AM
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Oh but they can.
No they can't Vraa. In the USA MB has an image to keep. They are destroying it painfully. There is a bit of elitism in owning a Mercedes-Benz. I don't mean to sound snobby buts its true. If any average joe can afford one, then thats great for the average joe, but the brand loses its exclusivity. MB is trying to do wayyyyyy too much at once. They will destroy themselves sooner or later, if this keeps up. I dont know I guess its better diluting the brand and survive, then to have Ford complete the monopoly of owning every car company including Mercedes-Benz. *******s!

Last edited by Guest0001; 02-27-2004 at 07:55 AM.
Old 02-27-2004, 08:12 AM
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Interesting read, thanks.

However, it seems like this writer doesn't like ANY car brand any longer. He fails to mention a single car maker that makes him happy.....Everyone has their opinion about things, but this strikes me as excessive ranting.

I prescribe some Midol and a couple good nights sleep
Old 02-27-2004, 09:12 AM
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good point chappy.

he does seem hard to please

i prescribe he open the nearest door and
slam his head into it at least 3 times:p

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Old 02-27-2004, 10:47 AM
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Originally posted by Noble C320
No they can't Vraa. In the USA MB has an image to keep. They are destroying it painfully. There is a bit of elitism in owning a Mercedes-Benz. I don't mean to sound snobby buts its true. If any average joe can afford one, then thats great for the average joe, but the brand loses its exclusivity. MB is trying to do wayyyyyy too much at once. They will destroy themselves sooner or later, if this keeps up. I dont know I guess its better diluting the brand and survive, then to have Ford complete the monopoly of owning every car company including Mercedes-Benz. *******s!
LOL! I see what you mean, with the coming of the A-Class and the new R (or is it D?) Class as a big ol' wagon...

I was more specifically talking about the new four door coupe, that idea in itself still irks me.
Old 02-27-2004, 11:09 AM
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Originally posted by Chappy
Interesting read, thanks.

However, it seems like this writer doesn't like ANY car brand any longer. He fails to mention a single car maker that makes him happy.....Everyone has their opinion about things, but this strikes me as excessive ranting.

I prescribe some Midol and a couple good nights sleep
exactly what i was going to say... whoever wrote that article talks as if he owns or runs some amazing, perfect auto brand that has no flaws... I'd be interested to find out what kind of car he drives for all the **** he's talking about basically every mainstream car company out there,,,
i disagree with a lot of what he says about mercedes and especially porsche,,, I mean what is wrong with porsche's quality?? As for mercedes, 10 years ago, people were complaining that the s-class was too heavy and the e and c-classes were too boring and now that they've have added a little flavor and shed some pounds, people complain about technology and quality?? Honestly, I'd like to know what makes people like this author happy...

Old 02-27-2004, 01:54 PM
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I agree with the complaints about Mercedes-Benz and many of the other car companies. I like the path that Mercedes is taking in general, but overall I feel their sales division is suffocating home office to keep making more and more money without regard to what happens after the car is originally sold. Mercedes needs to take the time and finances to thoroughly test out the vehicles with the components.

I personally feel that Mercedes is a "niche" brand repected world-wide and are known for luxury and quality. I feel that it is ok that they are expanding into other markets, AS LONG as they fulfill their obligations to the core values that have made them what they are, Quality and their position as a global automotive leader. As hard as it is to admit, time and time again you hear of forum members becoming fed up with their Mercedes vehicles and their dealers not standing behind them, eventually going to others brands such as Lexus.

From personal experience I love my w210 and I hold it in high regard as one of the best looking sedans on the road today, but common issues such as the seat rails making noises, MAF sensors on the 98-99 E300's going all the time, and the common harmonic balancer issue with the I-6 3.2 are issues that should not be related to a mark representing the best in engineering, safety and quality.

Mercedes-Benz makes some of the best looking motor vehicles, and some of the safest. Mercedes-Benz, bring back the reliability of the w123 cars throughout your entire line-up, have the dealers stand behind your products, and many many many people will be opened up to Mercedes. So many people have been turned away by the reliability issues throughout the various models. It is sad to see Mercedes-Benz evolve into a European GM :-(
Old 02-27-2004, 02:47 PM
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There are a number of seperate issues at play here that many people are trying to bunch together inorder to prove that MB is falling.

1. When I was growing up everyone complained that MB's were boring and way, way overpriced. In response MB redesigned their cars and brought down the price to make themselves more accessible. They achieved this buy building their cars to a price point, if they didn't would anyone be willing pay the price of admission?

2. MB past sales volumes would have left them open to a takeover, plain and simple. They are a very prestigious brand and would have been taken over. How would everyone feel if Chrysler, Ford, GM, Toyota, etc. owned MB? Take a nice, long look at the Jaguar x-type. Mb has done the right thing in expanding their offerings.

3. MB purchased Chrysler. This was one of the biggest mistakes in automotive history. Good for Chrysler/bad for MB. Many will argue Chrysler was doing just fine before MB came along. This is only partially true. Yes, Chrysler had a lot of cash, but one bad quarter would have wiped it out. Chrysler has something like 17 new models coming out in the next 3 years. I think they will eventually be ok, but right now they are draining MB big-time.

4. The above three have lead to major cost cutting at MB. The quality of interior materials does not exist.

5. The vast majority of MB dealers suck. Their service is well below average, they are way overworked and most don't have the facilities/manpower to handle the amount of cars MB is now selling. This is something that MBUSA doesn't seem to care about.

The good news is there are some changes going on with MB brass and I personally feel that the CL, SL, E, & CLK have made great strides in quality. I can tell you my parents drove a 2000 E320 and recently purchased an 04 E500. The interior quality of the 500 is strikingly better than the 320, it's not even close. I asked them their feelings of the new car and they stated that it is much, much nicer in every single way including more comfy, higher quality switches and buttons, smoother, and overall a great car.

On a personal note, I've driven cars such as the new 7, 3, ES, LS, Saabs, Toyotas, 911, as well as the full line of MB's including almost every AMG. To say MB is falling behind or being outdone by their competition is just untrue. MB still builds some of the greates cars available to the public. They have their problems, but I do believe they are aware of them and will address them.

Sorry for the long post.
Old 02-28-2004, 12:48 AM
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MB MAKES JUNK!

MERCEDES-BENZ
Mercedes Hits a Pothole
Owner complaints are up. Resale values are down. And competitors are gaining ground. Is Mercedes-Benz losing its shine?
By Alex Taylor III


Spend $25,000 on a car that doesn't run the way you expect it to, and you get pretty angry. Spend $50,000 or $100,000, and you get really angry. Just listen to the anguished howls of Mercedes-Benz owners on websites like troublebenz.com, lemonmb.com, and mercedesproblems.com, as they vent about the latest mishap to afflict their Benzes. Depending on the model, the complaints range from faulty key fobs and leaky sunroofs to balky electronics that leave drivers and their passengers stranded. Regardless of the severity, a single sentiment runs through the gripes: This shouldn't be happening to a Mercedes.


http://www.fortune.com/fortune/inves...517706,00.html
Old 02-28-2004, 02:56 AM
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Originally posted by Gekko
MB MAKES JUNK!

MERCEDES-BENZ
Mercedes Hits a Pothole
Owner complaints are up. Resale values are down. And competitors are gaining ground. Is Mercedes-Benz losing its shine?
By Alex Taylor III


Spend $25,000 on a car that doesn't run the way you expect it to, and you get pretty angry. Spend $50,000 or $100,000, and you get really angry. Just listen to the anguished howls of Mercedes-Benz owners on websites like troublebenz.com, lemonmb.com, and mercedesproblems.com, as they vent about the latest mishap to afflict their Benzes. Depending on the model, the complaints range from faulty key fobs and leaky sunroofs to balky electronics that leave drivers and their passengers stranded. Regardless of the severity, a single sentiment runs through the gripes: This shouldn't be happening to a Mercedes.


http://www.fortune.com/fortune/inves...517706,00.html
Gekko is the Lexus apologist I had in mind when I made that comment in the Audi thread...
Old 02-28-2004, 08:12 AM
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There's nothing to apologize for, nimrod. Lexus has the highest sales, highest quality, and highest resale values. Everything else is just conversation.

Enjoy.

http://money.cnn.com/2004/02/26/pf/a...tars/index.htm
Old 02-28-2004, 12:54 PM
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All I'm gonna say is that Mercedes needs to do something about this quality issue. I'll tell you right now I WILL NOT buy a post 2K Benz. I'm going to stick with the older models where the interior stays together and the electronics work. People can say what they want about the little things like electronic **** ups and crappy interior pieces are not a big deal. Truth is: they are. I spend that much money on a Benz, I want not only the reputation, but the quality of build it's based on. I've harldy seen a Chevy truck, or a Ford truck for that matter, where the electronics and interior don't, for the most part, to heavy abuse. If anyone wants to argue that with me they can come to the West Texas oil fields and take a good hard look at the fleet trucks out here. I know people will nit pick at this with "well my friend's this and my daddy's that", but I'm speaking for the majority I've seen. I just find it sad that you pay that much for a car and little things like that screw up all the time.
Old 02-28-2004, 01:05 PM
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Originally posted by Gekko
There's nothing to apologize for, nimrod. Lexus has the highest sales, highest quality, and highest resale values. Everything else is just conversation.

Enjoy.

http://money.cnn.com/2004/02/26/pf/a...tars/index.htm
Maybe you should look up the definition of apologist.

I wouldn't mind your existence so much if you ever had anything constructive to add. However, it seems you troll on this board solely for the purpose of touting Lexus quality, etc. Everyone knows that Lexus is reliable and luxurious while boring and floaty. Thanks for saying the same thing over and over again. If you would say something constructive every once in a while instead of posting propaganda, life would be much easier for you. Look at all the other criticism MB has taken in this thread. These are more meaningful critiques than just "Mercedes SUCKS!!!"

Nimrod, eh? Personal attacks are truly the way to get your point across. Nice job, buddy.
Old 02-28-2004, 03:12 PM
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Lexus has nothing to apologize for/defend. Better?
Old 02-28-2004, 08:26 PM
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Originally posted by Gekko
Lexus has nothing to apologize for/defend. Better?
Lick NOOTS!
Old 02-29-2004, 10:35 AM
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Don't turn this into a last Lexus vs Mercedes debate, last time that happened it went into so many different tangents..
Old 02-29-2004, 01:23 PM
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Originally posted by vraa
Don't turn this into a last Lexus vs Mercedes debate, last time that happened it went into so many different tangents..

Exactly. I think we luxury car enthusiasts should unite against the current threatening competition that is the new Kia Amanti.




Old 02-29-2004, 03:43 PM
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2014 E350S4
Originally posted by ajayz
Exactly. I think we luxury car enthusiasts should unite against the current threatening competition that is the new Kia Amanti.




You know, I've been thinking. What exactly defines a MB enthusiast? BMW enthusiasts seem to define themselves as not caring for the luxury/technology/image, but rather just want a sporty ride with excellent performance. It seems Audi enthusiasts generally seek even less attention to their car. What about MB enthusiasts? Luxury and high prices?
Old 02-29-2004, 05:37 PM
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Originally posted by Incendiary
You know, I've been thinking. What exactly defines a MB enthusiast? BMW enthusiasts seem to define themselves as not caring for the luxury/technology/image, but rather just want a sporty ride with excellent performance. It seems Audi enthusiasts generally seek even less attention to their car. What about MB enthusiasts? Luxury and high prices?
And a lot of patience to deal with problems
Old 02-29-2004, 05:39 PM
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Originally posted by Incendiary
What about MB enthusiasts? Luxury and high prices?
Perfection


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