What is the future of luxury automobiles, if any

Great Debates
1

Its always been my understanding that the main motivations behind buying luxury autos are to one up and impress people by showing them how much disposible you have and because the anemities of luxury autos make them worth the extra money.

However, this is 2004, the age of autotrader and 72 month car loans. A 2001 mercedes benz, lexus, acura, etc. introductory model that is 2 years old goes for about 17k. A 72 month car loan for a 17k car is only about $290 a month which means that if you get a 31 credit hour certificate degree at community college and earn $9/hr you can probably afford a gently used luxury auto. And the average american cannot tell the difference between a $16k 2001 Mercedez C230 and a $58k 2004 E500. They see the label ‘mercedez’ or ‘lexus’ and just assume they are all the same so i think the status factor is not that relevant anymore. I remember 10 years ago seeing a BMW or a benz was rare, and when I did see them they were usually 10 year old models. Now someone who makes $11/hr with good credit and a long car loan can probably afford an almost new luxury auto and nowadays i see them all the time. I see many Acuras, Lexuses, Benz’s, and cars like that nowadays. So the ‘i have more money than you’ factor doesn’t seem that big anymore as the shock value has worn off.

As far as anemities many of them appear rather petty now. Things like ‘smart card’ are not worth the extra 20k you pay for them when comparing the car with a comporable toyota. An in-dash CD player is $99 w/free installation at circuit city, air conditioning is almost standard in newer cars and leather seats are not excessively expensive. many new anemities like ‘dual climate control’ are really petty in my view, and i dont think people are going to continue to spend an extra 20k or so on them.

So what is the future? If these are the main motivators and they are not that important, what will happen? Will things like Humvee 2’s pick up, because they are hard to duplicate? Will valid anemities make the extra 20k worth it or will people just stop caring?

2

I don’t think that too many people who buy luxary cars are in it for the status. Though using the word “Lexus” in the same breath as “Mercedes” makes me want to vomit.

There is a problem with luxary cars now. For a long time, luxary cars were just that - luxaries. They were more comfortable, safer, had more features, etc, as you point out. There was an implied higher level of construction involved. However, with technology increasing at such an insane rate as having mid-range cars with GPS navigation and DVD players, you kinda need to question what luxary means. Frankly, I forsee the likes of Mercedes lowering their prices.

However, what sets luxary cars apart from the rest is partly that luxary cars are on the forefront of technology. I admit that I am biased- my father has been a mechanical technician for Mercedes for 20 years now- but I’ve been exposed to a bit more of what goes into the cars than most people are.

As far as ammenities, you have to think beyond “smart cards” and keyless entry. Luxary cars tend to have more front runner technology as far as fuel economy, safety features, etc go. I’d MUCH rather be in an accident in a new Mercedes or BMW than in a new Kia, Hummer, Toyota, etc. :-p You also have to consider that Mercedes and BMW market cars primarily in Europe, parts of which are frozen over for good chunks of the year. They are light years ahead in traction control and breaking technology. These companies are also experimenting with computer controlled electronic breaking, which is much more efficient and safe than the current standard, as well as giving the driver more control over the process and leading to less mechanical wear and tear. More safety, reliability, and lifespan.

Hummer 2s, on the other hand, are pieces of crap that are horribly inefficient and disintegrate on impact.

shrugs I was lucky enough to have my first car be a used 1983 Mercedes 190e, in 1997. The little fella ran perfectly, and was still comfortable. It performed well, got decent milage, and was even stylish. My sister bought it from me, and she drove it until last year - a 20 year lifespan, without any major problems, and it still looked like a '94 model. (As an aside, neither of us drove it as a status symbol - we drove it because it was cheap and my dad could take it in to work and fix it if needed)

I don’t think you’ll see many Hummer 2s rolling around in 20 years.

3

Nice post, Zagadka.

I was very sorry to see Mercedes not only lowering their prices, but offering cloth seats for the first time ever. No leather in a Merc? What is the world coming to?

I drive a “luxury” car, and I don’t do it for the status. Especially since where I live, I’m not usually the most luxurious car on the road! I drive my vehicle because I am convinced it is the safest vehicle for my children to ride in. But yeah, the little extras like GPS, heated seats and windshield, etc, are kind of fun!

Land Rover rules, but if I didn’t drive one, I would probably have a Merc, BMW, Volvo or SAAB (a cute little convertible number!).

4

I wouldn’t be surprised to learn that lots of people just plain like luxury. It feels good to them.

5

I know, that is a little disturbing, but the times are a’changing. I mean, even VW is getting into the “luxary” market, which incites giggles when you remember why VW was founded. On the other hand, I wouldn’t miss leather seats in sunny areas. I actually got a nice fuzzy seat cover, because on those lovely 105* summer days leather is a bit uncomfortable.

hehe. All very solid models. If I had to buy a car again (stuck on public transit now), it’d probably be a Volvo. Not terribly sexy, but leaps and bounds away in security of mind, which is the most important feature of a car. Not that LR, BMW, Merc, etc aren’t sexy anyway.

Lexus is just plain shoddy, though. I cringe every time I see them. I mean, parts are interchangable with generic Toyota cars. That doesn’t say a lot about quality production. :wink:

OK, so maybe I’m a little elitist when it comes to cars. Sue me!

6

Well, I’ve got a Lexus. I got it new and I’ve put 250,000 miles on it. Not a lick of mechanical trouble. Ever. Routine maintenance only. It’s safe, it’s reliable, it’s comfortable (which is a big factor when I put all those damn miles on it). The guys at the garage say its good for at least another 100,000 miles, if not more. I intend to drive it until I can’t. I’ve never found anything about my Lexus to be “shoddy”.

I’ve got a Volvo too. About 170,000 miles on it. More mechanical problems there, but still relatively reliable. Still, it has cost more in upkeep and repair and the Lexus, mile for mile.

Also a Chrysler mini-van. 180,000 miles there. Tons of breakdowns. All nickel and dime stuff. But what a PITA. It costs more that the Lexus to maintain.

To me, “luxury” means comfortable and reliable. I don’t give a sterling silver rat’s hindquarters whether anybody is impressed or not.

Which is good, because not too many people are impressed by a 9 year old Lexus with a quarter million miles on it.

7

I would expect the Lexus to run like that, QtM- it’s a Toyota! If you don’t get at least 250,000 out of a Toyota, something’s wrong.

I won’t even comment on the Chrysler. Ugh. I wish I’d had better experiences with American cars over the years, but I haven’t.

8

It’s 35 years after the moon landing. All of the cars are techno-sludge. All of the automobile companies have Computer Aided Design/Computer Aided Manufacturing. Nobody knows how to make anything that everybody else doesn’t know how to manufacturer.

Why should Lexus being mentioned in the same breath with Mercedes bother anybody? Everybody has been brainwashed into concentrating on brand name instead of physics. The cars are all junk. I used to think the Click and Clack brothers on CAR TALK were hilarious until I heard they had degrees from M.I.T. How could they stoop to talking about cars?

I applied there and got an interview but was sure I wasn’t getting in three minutes into the interview.

Jets flying across the country at 600 mph since the 1960’s and we keep redesigning machines that roll along the ground at < 130 mph in 2004. YAWN!

What about turbine or tri-dyne engines?

Dal Timgar

9

I completely agree. If you look at J.D. Power and Associates Vehicle Dependability Studies, you’ll see that Lexus has been awarded first place for the past nine consecutive years, while Mercedes now stands well below the industry average in terms of reliability:

http://www.prnewswire.com/mnr/jdpower/11054/

10

Um, that has what to do with what? You’re comparing jets that fly in the air non-stop with no obstacles or things to collide into with vehicles driving along the ground? You seriously think that we should be doing 200 mph in residential areas? Most people can barely handle their cars doing 65 on a freeway.

What about them? What does that have to do with luxary vehicles? Turbine cars are inefficient and give poor performance. They’ve also been around since the early '50s. Nothing new.

11

As the saying goes, “sell to the masses, eat with the classes”.

12

Yeah, the slip in quality of the Mercedes was a planned event… they were banking on the name to still sell cars while decontenting, and ship the extra cash to shore up Chrysler.

It ain’t working.

PS: Dal, you really don’t know much about cars, do you? The internal combustion engine is a pretty darn efficient thing… and we’re on the bleeding edge of a whole new way to use it. The new Prius is the honest wave of the future. An IC engine is most efficient at idle, and at max throttle. The new hybrids work with that, running the engine at max power to run a generator, and then to electrical motors.

If it helps any… and it probably won’t, I can tell you that Toyota literally, no joke, runs the DMV in Japan. They have to get the designs of cars two years before they hit the road. Toyota takes the designs and sends 'em to their styling division. It’s not a joke that they look like Mercedes… but it’s also not much Mercedes can avoid.

13

That was quite a senseless and disjointed rant Dal Timgar. I hope you feel better now.

14

Actually, the internal combustion engine is quite INEFFCIENT, typically something like 20-25% (Link). Hybirds help improve this ration, fuel cells will probably do better.

As to the OP, many people do want to go upscale on their cars. I agree that years ago, you saw relatively few BMW’s, Benz’s, Lexus, etc. But corporations have to keep finding ways to make more money and the only way they could do that was by making upscale cars available to the masses. In most cases, this has resulted in poorer quality control and in my opinion, dilution of the brand. In my area (SF Bay area), BMW 7 series, Benz 4,5 & 6 series, Lexus 430’s are all over the place. BMW 3 series, Acura’s and Benz 2 & 3 series are like ordinary Toyota’s, they are everywhere.

There will always be people willing to pay big bucks for perceived status. The luxury car segment is not going away anytime soon.

Want to have some fun? Check out these links where you can see examples of actual prices that many people got sucked into for their leased status fix and now want to get out of:

http://www.swapalease.com/
http://www.leasetrading.com/home.asp

15

Compared to what? Because everything is relative. What are the efficiencies of other thermal engines? Diesels go up to 30 -33%. Do you think it is easy or even possible to design thermal engines with much higher efficiency?

16

And diesels are coming back to America, shortly. The new ones are very nice and… uhm, I think 45 state legal. Certain emission issues… was it ozone? They’re generally slightly less polluting than a normal IC engine, and a bit more efficient, but there are some emission issues.

Yes, the IC engine is only 20-25 percent efficient. And nuclear fusion is close to a hundred percent efficient. But we don’t have that yet.

Of the various ways we have to power a motor vehicle, the IC engine is currently the best, when you consider longevity, reliability, ease of fuel transport… gasoline is darn good stuff.

Pure electrics have range issues, infrastructure issues (Can you imagine the rolling blackout issue in Cali if everyone plugged their car in at night?) and aren’t actually more efficient, as they simply shift the demand to the power plants. And a lot of those power plants still burn coal. Which is nasty stuff. I’d rather we invested a bit more in nuclear power, to tell the truth. That, and deep trench hydro power plants.

17

I think you are mixing things here. Nuclear power conversion to heat is 100% but that is meaningless because you still have to convert it to mechanical energy.

The question here is efficiency of thermal engines converting heat to mechanical energy and I believe 30% is pretty darn good for an automobile.

18

Luxury cars will always have a market, because there will always be a group of people who see a car as more than just a form of transportation, and will use them as a status symbol.

Also a thing to consider, is that the ultra-luxury market is seeing an increased bit of interest, with cars like the new Mayback 57 and 62’s, along with the new BMW designed Rolls-Royce’s coming to the market. We live by our senses, and there will always be people who will much prefer the percieved quality of construction and materials that one gets in a more expensive car.

What I see happening is that as luxury cars become more common on the roads, there will be a large increase in the numbers of ultra-luxury cars being sold, cars with even higher pricetags, and even more features, since “Everyone has a Benz.”

That is the whole problem with a status symbol. It loses it’s value when everyone else has one, so they then need to come up with a new status symbol. That’s how cars like the Hummer H2 become a status symbol, because compared to the average Lexus you see going down the road, it stands out.

Whether it is a better car or not is irrelevant, it’s how well it stands out against the crowd that gets people to buy it.

So expect more by ways of even more expensive cars, and expensive specialty niche vehicles.

19

Thats kindof what i was saying. Well over half of people can afford a gently used introductory luxury auto now, and most people can’t tell a 2001 C230 benz from a 2005 E500 even though one is 4x more expensive than the other. So the status of saying ‘i own a benz’ doesn’t matter since everyone can own one and a newer, more expensive one doesn’t give more status than a used introductory model so i figure a whole new line of status & luxury cars that start at 60k or so will pop up like Hummers. There is only 1 humvee and it goes for 50k+, while there are tons of BMWs, Benzs, Lexuses, Acuras, etc to choose from.

i saw a commercial for luxury autos today (lexus) and they had the headlights that turn at 15 degree angles. Things like that are pretty bad if thats the best a luxury maker can offer its customers in today’s age.

20

All I am saying is that paying 40,00 - 60,000 dollars for a car is insane.