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WSJ: Mercedes Expects Tougher Year ...

1987 Views 12 Replies 9 Participants Last post by  allpoints360
Here comes an article on WSJ 02/14/2005.
When can we expect good news? [V] Chris Reiter at [email protected]
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Compare a 2005 S430 with your 1988 420SEL.

That's why there's no good news articles. It's not a luck game - it's about how they make the product right now.

w108 - 2/17/2005 1:14 AM

Compare a 2005 S430 with your 1988 420SEL.

That's why there's no good news articles. It's not a luck game - it's about how they make the product right now.

Just compare the two. The 2005 S430 is far superior!

Usually I ignore these threads but some comments are just out in left field.

People have blinders on and never see the full picture. Let’s use an example. Say in 1988 you make $50,000 a year income (in 2005 dollars), your brother made $45,000 and each of your neighbors made $20,000. Today you make $70,000, your brother makes $80,000, and your neighbors make $72,000. Have you lost money? You went from making the most money to making the least, yet you still make more money today.

That is similar to MB and quality. Most everyone made cars with quality problem in the 1980’s. MB was an exception. Today most everyone in this market makes a quality product so it is possible to make a better product and have your quality rating drop.

Another point, in 1988 MB had the whole S-class market to themselves with no real competitor. All of the others were pall in comparision. Today the Lexus L430, Jaguar XJ, Audi A8, and to a lesser extent, the BMW 745i all compete for that market. Yet to most people the Lexus which is the best seller is just a MB S-class whanabee. The S-class is still the gold standard.

Briefly, let’s talk about the WJ article. It is about “Mercedes Expects Tougher Year From Price Pressure, High Costs.� Nothing is said about a weak product line! The dollar is very weak. The luxury market is tight. Even Cadillac is discounting their new STS and Chevy is having a harder that usual year for their new Corvette. Look at the E-bay auctions for new Corvettes and Mustang GT. None of them are going much above list like the junk Thunderbirds dit in 2002 (MSRP + $10,000). The times are a changing.

There have been some articles about quality issues and that is true about the M-Class and some of the new LOWER priced sport coupes/converts. However, the whole line still stands tall. Journalist like to sell papers so when a company has a bad profit year the doomsayers get the attention. It is like the stock market in 2002. Some analyst said it was dead for a decade. It didn’t happen.

When a company has a successful market launch (the Chrysler 300) a new day is at hand with much riches. However, if a company has a weak year (MB) the sky is falling. Journalist love to write hype to sell papers. Usually the truth is in the middle.

My final point is to W108, you have never owned any of these cars that you condemn so how can you judge?

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For more insight on bad news for car makers, just look at the headlines in today’s New York Times Auto section. It isn’t just Mercedes.

U.S. Opens Safety Inquiry on Lexus S.U.V.

G.M. Is Warned of a Cut in Debt Rating

Volkswagen Profit Declined 29% in 2004

G.M. Will Pay $2 Billion to Sever Ties to Fiat

DaimlerChrysler Profit Sinks on Mercedes Weakness

Expansion Costs at Toyota Limit Its Earnings Growth

Car Sales Rise 2.3% in January, but Ford Takes a Fall

Another Big Bailout for Mitsubishi Motors
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Just let you know guys, when I post articles like this I did not intend to offense anyone.
Just I want to share the information.
And it is nice to see people debating actively.

Anyhow, it looks like to me Automobile industry as a whole is going through some tough time and stiff competitions.

Thanks a ton for thoughtful feedbacks, everyone.[:)]
Most everyone made cars with quality problem in the 1980’s. MB was an exception.
You just made my point. MB was an exception. Why aren't they still and exception? I'm not questioning that all these new cars have fantastic new toys, efficient/powerful power plants and very safe airbags and presafe systems. My point is that somewhere along the way, high quality craftsmanship and quality parts somewhere fell off the band wagon. There's three general types of people on this site, I find. Hardliners that are old skool MB. Hardliners that love the new cars. Then people who love all MB's. I am a hardliner that loves my old MB's, not because of the size of my pocket book, but because of my experience with all cars and how the way new cars are going. You can't deny the slip in car quality and the troubles MB is having that it shouldn't.

My final point is to W108, you have never owned any of these cars that you condemn so how can you judge?
That's correct but I work in the service department of one of MB's primary competitor, Audi. It's not MB, granted, but they do have something in common and it's ridiculous quality control and constant visits to the mechanic shop and ever increasing warrenty staff working at the dealerships. I wasn't just picking on MB, it's a lot of the new cars out there. I am am proud to say I do not own a new car, and I consider it an educated choice in choosing a high-quality reliable vehicle and recyling at the same time as opposed to always having to have something new all the time. It's not for everyone. If you love the new cars, that's great, just don't go around telling me I am blinded and don't know anything about new cars, please - because it's not true. Besides, there's dozens of other topics with the same types of conversations all over the place on these forums and at different times - this I think you know, people who share my opinions that debate this old topic with the people who have strong support for the current models. I will never say you're blind just because you don't share my opinions, experience and ideas - life is all about differences in opinions. Anyway, as it stands, both new and old cars have their pros and cons, but I prefer an engine that doesn't send a check engine light on for stepping out of emissions boundaries for a fraction of a second and other problems you have to deal with. So, I humbly ask you again to look at that 1988 420SEL compared to that brand spanking new S430.

It may be an "old car" but it still does surprise!

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I don't agree that 80's MBs were necessarily kings of reliability. My '85 TD had an inch high stack of service records when I bought it with 124k, though it was a wonderful during my 110k miles (and I still see it around town 5 years later). My '82 SL has a stack of work that was done when young, though it still is a great (72k) car.

I have an M-Class and still think it is a wonderful vehicle, with some huge work that has been done on warranty. But so do all the other MBs.

My opinion is that MB's transition from heavy metal tanks to 4 wheel computer cases has been a difficult one. They are now a car company, just like all the others. Cache might sell, but technology and build quality keep you on the road.

I don't see why people would company a 2005 S to a 1988 (or 1972) any more than one would compare XJ6, BMW 7 or Audi A6. It's a different world.
Sad times for MB, hopefully they will get it back together on reliability. The new Consumer Reports Auto issue just came out and Mercedes reliability was ranked 34 out of 36 (just two places from rock bottom, not good [:(])
At the end of the day, it's all about the product. Remember the old saying, "a good product markets itself." I think it still applies today, and will continue to be true tomorrow and the day after. If you wanna get into the "compare products" game , let's play:
A friend of mine has a 1998 W210, and he got a new paint job a few weeks back. After the new coat, I saw a dent the size of a CD on one of the front wings. When I asked him how he managed to dent the car after a new paint job, he swore that one of his friends made the dent with his elbow when he merely leaned on the car.
Last night, I was in a used-car showroom, which had three W210s on display, as well as a few Lexuses and Crown Vics. There wasn't much more I could do than tire-kicking and panel-knocking, since the young salesman seemed quite disinterested in helping me. Knocking on the 210's body panels, I literally felt like I was knocking on plastic.
On the other hand, some bozo in a 2004 Toyota Land Cruiser broadsided my 124 the other day. He hit me right in front of the rear left wheel, on the wing and the door. His bumper fell off, and the front wing was badly dented. [Nothing] happened to my car - absolutely nothing. The paint wasn't even scratched.
Mercedes-Benz (and quite a few of the other German manufacturers, for that matter,) allowed themselves to be caught in the tangles of gadgetry and so-called "diversifying prduct lines." They made electronic gadgets of formerly simple instruments that were completely saticfactory in their analog forms (not to mention reliable,) crammed some features and gadgets that are really of little use in everyday driving, and, with their so-called "broadening their product line," lost focus on the single most important factor that used to make their automobiles what they were: Quality.
it's very easy to slide downhill when you're at the top, but it's very hard to climb back up.
Here are two pieces reported by Reuters and Automotive News on Friday. Though they are single paragraphs, they should speak volumes about the status of the auto industry today, and particlarly the grave position Mercedes-Benz is in:

Mercedes chief may drop goal to top quality survey
BARCELONA (Reuters) -- DaimlerChrysler is debating whether to abandon its goal to place its Mercedes-Benz brand first in the prestigious J.D. Power and Associates car quality survey, Mercedes chief Eckhard Cordes said on Friday.

AUTOMOTIVE NEWS EUROPE CONGRESS: GM Europe exec wants innovation that is useful, affordable
Automakers are guilty of packing too much innovation in the car. "We have overdone it," General Motors Europe President Carl Peter Forster told the Automotive News Europe Congress in Barcelona Thursday.

At least somebody in the industry is finally seeing the light. I\m just not too happy that it's not somebody in Unterturkheim.

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Why would anyone be upset by this? Tough times and fierce price competition among automakers mean lower prices for us. You won't hear me complaining.

As for comparing a 1980s Mercedes-Benz to a modern S-Class, you can't. The cars are as different as night is from day. The 80s cars had no technology and the new cars are all technology. Trying to compare the two is ridiculous. And if MB tried to duplicate their 80s cars today, i.e. no technology, almost no one would buy them and the brand would be bankrupt overnight.

For the record, at that time, I drove Lincoln Town Cars. I had two in a row and ran each over 150,000 miles with NO problems whatsoever. On top of that I neglected maintenance: I changed the oil about once a year (about every 20,000 miles) and did nothing else to the cars other than routine brake jobs and new tires. No problems whatsoever. I chose those cars over older MBs because, if I was going to drive a car with no technology, I chose the bulletproof Lincolns. I did not become an MB fan until recently. You want a tank with no tech, buy a Hummer.
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You missed the point completely.
The comparison was not between the nature and level of automotive technology today as opposed to yesteryear. The issue here was quality and reliability. I personally have no use for a high-tech, exotic gadget that doesn't work or gets broken after brief use. Equally, I do not care for a car - any car - that would possibly leave me stranded in the middle of nowhere on a rainy night, not matter how cheap it is.
You negated yourself completely when you said you drove two "technology-less" Lincolns for 150k+ miles each with no problems whatsoever, and that with you being negligent on maintenance. Now I dare you to try that with a 2005 car!

As others posting in this thread have said, the auto industry has changed so much in the past 25 years that comparing cars from one era to the next is problematic. Of course, market demands have changed as well. Expectations of quality for high-end products is one thing that has not changed.

What has not been mentioned in this thread is the widening of the high-end market. M-B has actually moved more models into the "affordable" range over the past 25 years. Producing a bullet-proof car from a quality point of view at a price point of $40K is something the Japanese figured out long ago. M-B is still working on it.

At the real high-end, over $100K, M-B is probably still producing impeccable product. I don't have specific data to back that up. But how many people are in the market for cars that cost over $100K? My guess is, not many.

The 300CE CV I'm driving listed at $77K in 1993. That is $102K in 2005 dollars. It weighs over 4,000 pounds. Would anybody buy that today? A few people, maybe. On the other hand, today's CLK 320 CV does sell well at roughly half the price. The challenge is building top quality at a lower price point and lighter weight. That is not easy.

Happy trails,
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The idea of reliability has not changed substantially in the last 20 years, I do not think. We knew what realiability was then, and we know what it is now. A revealing fact is the Consumer Reports rating of reliability. Since this is based on OWNER's feedback on objective issues of realiability, and since CR has been doing the same for many years, the question of comparison should be a given. MB has tumbled in this rating.

The MB star is a symbol of quality based in the illustrative history of the company. If you do something better than anyone else in the world, we want that. If you don't, you can't fool us for too long.
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