WordSmith

Sounds like we're getting a real bargain in the US.

dunderhi

I had a case of sticker shock when I did the ED for my SL. I took these at the Mercedes Forum in Stuttgart. The price is in Euros.

emayer

Why not? Judging by the number of 100k+ vehicles I see on the road daily I can't see why this is not possible.

The topic is interesting, but most of us who spend time in Europe know full well that we are not comparing apples to apples amongst these vehicles. Compared to the U.S., what percentage of European passenger vehicles sold have 8 cylinder engines? Given fuel costs, insurance, VAT taxes, etc. we all know such vehicles represent the minority. People in the market for such an SUV in the EU aren't going to necessarily quibble over the cost. Seems like Canadian sales aren't struggling either.

WordSmith

I understand that the ones sold in France only drive in reverse.

oknish

I doubt if this forum has membership anywhere near 30K so I don't see how that decision can be made here. I am sure MB has a customer database and polling them via a survey would probably yield more accurate results. But then again MBUSA knows the best so why bother asking customers, right?

pmb600

The fact is that we in the US pay the least for Mercedes anywhere in the world, including their home country of Germany. We recently had an MBUSA product manager speak at my school, and he said that every time the dollar falls in value by one cent against the Euro it costs them about $20 million a year. They are trying to compete in the very competitive US luxury car market, and so they can't raise their prices to be what they really should be. As many have stated, this is because of volume. Outside of Germany, no country sells as many Mercedes in a year as the US does.

oknish

You make an excellent point. However, this is applicable to all luxury car makers not just MB. So, IMO, that has to be built in to the cost of doing business. You can't expect to have a large market such as US to have the same characteristics as other smaller markets.

GL Fahrer

What would you say that?
What has MBUSA done that implies they don't consider the customer?

There are more choices for Luxury automoblie than ever, and >250K Americans chose Mercedes last year.

The German word: "verzogen" comes to mind...by starting this thread, I was attempting to highlight how lucky we are, to be in a position to buy the least expensive Mercedes-Benz on the planet.
Now, believe it or not, very few Americans can afford a +$150K vehicle; of any make. By selling the GL at $56K to $77K, more Americans can afford to experience the best luxury SUV in the world.

By extension, you're implying that selling the GL550 >$150K (with ORP) is what customers REALLY want and demonstrates that MBUSA actually listens to the customer.

It's a volume game, if you want everything and are willing to pay for it, get a Maybach.

GL Fahrer

The cost of production for Mercedes-Benz is currently higher than its competition.
Couple that with the declining value of the dollar and extreme competitive pressures of the U.S. market...pmb600 is correct.

pmb600

Mercedes is one of the few that still makes most of their vehicles in Germany where the cost of labor is high. Audi makes a lot of the cars in Mexico and elsewhere, and BMW has made many in South Africa for years. Mercedes is only now making some US bound C-Class in South Africa. The rest are still made in Germany. (Except as we know the R, GL, M.) The G is made in Austria by Magna Steyr as are some 4Matic E-Class. But Austria has a high cost of labor like Germany.

oknish

Why would MB offer a customer based outside of US a choice of picking thread color for their interior stitching? Don't think customers in US can even dream of such flexibility.

We are lucky!!!!!! WOW......talk about "verzogen". MB can stop selling their vehicles in US anytime they would like to. Why don't they? And, for some reason, I don't get the feeling that MB is pricing the cars out of generosity so "more Americans can afford to experience the best luxury SUV in the world.". They are trying to gain market share. That is perfectly understandable. What is not understandable is that why more choices/options are not made available for those in US/Canada, even if these few are willing to pay a premium for this choice.

No, I wasn't implying that. What I have been implying is that it is A OK to have a base 550 model for majority of customers. However, for those few that do want to have flexibility/more choice, offer them that. Charge them a premium the way EU folks pay but, at least, allow the choice.

Let's stay on GL here since the debate started about GL and should remain about GL. If a customer is willing to pay a premium to get certain options on GL then they should be allowed that choice. Unless, of course, MBUSA is telling the customers that Maybach is the only car if you want everything the way you want it. Wonder if that will be a worldwide message or just to those in US.

oknish

So MB should look at reducing costs of production. Moving to US was probably a good move in that direction. One can't complain about high production costs and then lament that product has to be priced competitively. I am not a business guru but I think even I can tell what will work most to increase the bottom line.

And, previous questions still remain open, viz. -

1. How much does shipping/duties/EU Taxes add to the cost of a US made GL being sold in EU?
2. What about German made MB cars sold in EU? Do they also sell at twice the US costs?

GL Fahrer

This horse is dead...it has been explained every way since Wednesday. Apparantly, you can afford a +$100K car..I can't. So I am gratefull that there is a GL at $56K.

A Maybach costs >$400K because you can get it any way you want. You want purple stitching on your Blue seats...sure.
A Mercedes SUV in the U.S. has to cost less than anywhere else in the world because the Luxury SUV market in the U.S. is more competitive than anywhere else in the world.
How do they do that? Packaging, reducing options and a commitment to high volumes; marketed to a public willing to pay between $50K - $80K. To market the car to a select few who can afford everything, would exponentially reduce the market share MBUSA needs to stay competitive. Mercedes-Benz cannot afford to be a custom shop. So choices have to made...what to keep, and what not to keep.
Lastly, most Americans want it cheap and simple. Few Americans want it complex and expensive. If I'm in business to increase market share, I'll choose the former everytime.

pmb600

Oh my god. Please take this back. Don't you remember the last time Mercedes tried cost cutting?? We got the unreliable W220, W211, and W203 and Mercedes JD Power rankings fell near the bottom. They have finally dumped Chrysler (which only impacted them badly financially, I know that they did not use Chrysler parts as many think) and are once again focused on bringing back quality. This is why Mercedes ratings have improved drastically in the past year and many of the new models like the GL, S, and CL even won awards. Also this has been some of the debate in the W204 forums, about moving more production of C-Classes to South Africa. Even if they are reliable, there is something less appealing about buying a non-German made Mercedes to me.

pmb600

I agree that I would like to see some non-US options and exterior and interior colors available. I don't see how it would be difficult to make them available since the cars are all built in the the same plant next to cars going to many other countries. I think that MBUSA should have some options available at least that are available to the customer to order if they wish. Obviously the dealer wouldn't order one with all these extras for their lot, but it would satisfy the customers that want some extra flexibility while costing Mercedes little to none.

WordSmith

I agree completely! I read one MB exec said that one of the main reasons MB dumped Chrysler after less than a decade was that they realized they were spread too thin and their quality was slipping. They recognized the problem and made drastic moves to correct the situation.

pmb600

Yes exactly. Too many people said that Chrysler caused the quality drop because they were using Chrysler parts in Mercedes when in fact the opposite was true. They used proven Mercedes parts in cars like the Chrysler Crossfile and the Chrysler 300, which really helped to get Chrysler on a better road.

Chrysler did affect Mercedes negatively because it showed the Germans a new way of doing business, trying to make a car for as cheap as they possibly can which is something Mercedes didn't know so well. Look at cars like the W140...that thing was a tank. Every detail was there because it was functional and intentional.

By the way, I heard that they are going to change the parent company to just Daimler AG. But shouldn't they really make it Daimler-Benz AG like it was before?

emayer

COME ON!

If I didn't know any better, I'd say you're a Yes man for MB...

Seriously, I appreciate the stimulating input you provide but we can again provide an existing example to invalidate the excuses you provide for MB not being able to provide a spec. optioned product. Being from Stuttgart originally I've been around Firma Porsche and MB my entire life. They use many of the same suppliers in their manufacturing. Yet Porsche builds the Cayenne in Germany (Leipzig), can be ordered to any customer specification, remains competitive in the U.S. segment, and oh by the way is presently the most profitable manufacturer.
The reason MB cannot follow suit right now is that they are still recovering from market losses suffered by diminished quality and increasing Japanese luxury auto market share during the late 90s coupled with a weakened dollar and the costs associated with the Chrysler fiasco. I think MB is on the right track presently, but don't kid yourself, we're paying the cost associated with all of this.

GL Fahrer

Give me a break...
Remind me again how many Porsche's were sold in the US last year.
Remind me again how many different models Porsche sells in the U.S.
It's a different company with different market pressures.
Like it or not M-B (in the U.S.A) is a volume business with 43 different models.
Since when is understanding the business model of a Manufacturer being a "mouthpiece"? If you can't have it your way then the business model is wrong?

emayer

Porsche- 16 model variants not including the upcoming Panamera.

Perhaps we are addressing different things. I thought we are discussing profitability. Are you only concerned about market share and number of units sold? I don't think MB will get far with this approach given the fierce competition and emerging players like China and India...

I'm not saying M-Bs business model is wrong. But clearly the logic that an auto manufacturer cannot provide spec. order products and be highly profitable is flawed. I've given a great example of this and others exist.

GL Fahrer

With SUV's, M-B (in the U.S.A.) has chosen a volume-based scenario rather than a per unit scenario for profitability.
This makes sense, because Americans (in general) want a clean and easy-transaction. They walk into a dealership see what they like, and want it now. Therefore dealers have to pre-order most of their cars. Because... if the car isn't there, the customer will indeed walk accross the street to the competition. (unlike Europeans, who have less competition are more brand loyal)

emayer

How is it that MB has a volume based approach when most of us have to wait 3-4 months for our SUVs to arrive? It's not as though there is an abundance of these sitting on lots as compared to US manufacturers. I would argue that if you need an SUV today you will have better luck finding a US or Japanese produced vehicle. If we have to wait for the car to be built what's the fuss with being able to order a spec product if we're willing to pay?

Jlight

GL Fahrer,

With all due respect... I see your point on contenting from a price perspective however; you absolutely just don't get it from a customer perspective.

What you are seeing here are some of MB's most valuable customers (Enthusiasts) pointing out that they love their GL's (or in my case I would love to buy a GL but...) we want to order our GL like customers in Europe or in Canada can -- with specific options we desire and that are available on the GL platform. Some examples are in my case for the GL 320:
*I can not order ADSII or MultiCountour seats (could in 2007)
*No GL in the US can get ventilated active seating
*Tire Pressure Monitoring is different between US/Can/Euro
The list goes on and on...

We have been around and around on this topic of contenting. My feeling is that IF the option is offered on the platform then I as a customer should be able to special order it -- as the option is approved, designed, and engineered for the platform.

The fact that the GL is assembled here in the USA is even more of a reason why a build-to-order option should be available as everything needs to be shipped here to build GL's destined for global delivery.

I will say again and use the X5 as an example. I am a life long BMW customer - if they had a diesel X5 out now I would buy it -- though I think the GL is a better overall vehicle.

Why would I buy the X5? Because BMW will go out of their way to allow me the option of including "special order" options down to a special order paint color. Will it cost more, yes. Will it take longer, yes. Are customers like me willing to pay and wait -- YES YES YES!!! BMW is not a small company but when you have passionate customers who want their luxury vehicle a specific way give them the option and - CHARGE them for it – it’s a WIN-WIN trust me customers will cover the minimal costs to say add ADSII to a GL 320 when it’s coming down the assembly line… I would pay through the nose for cooled active seating - give me the option!

If there is anything I can provide as a take away for MBUSA on this topic it is learn to be a little more interested in your ultra passionate customers as they are your true brand champions. Though MB's "historical growth" has been good, I will point out that ALL luxury brands experienced explosive growth - the key for MB is to continue producing great product and really become customer centric.

Oh and one more note then I am done -- the customer is always right.

Jlight

Emayer -

See my rant on the same topic -- bingo! We will pay - MBUSA problem solved!!!

emayer

AMEN BROTHER!

I think MB should consider having us on their Board