Filed under: Car Buying, Sedans/Saloons, Daimler, Mercedes-Benz, Earnings/Financials
The wealthy concerned about gas prices? Merc S-class sales fall
With sales of the Mercedes-Benz S-Class down 23 percent in the United States, and off nearly 12 percent worldwide, Daimler officials are showing concern. The luxurious S-Class is the most profitable model in the lineup, contributing up to an estimated 25 percent of Daimler's pre-tax profits, the drop is getting painful. With the exception of the new C-Class (up 38 percent), overall sales for the German automaker have fallen in the first six months of the year. In response, Daimler is diverting shipments of vehicles to China and Russia as those emerging markets have yet to see a slowdown.
[Source: Automotive News, subs. req'd]
Reader Comments (Page 1 of 3)
why not the LS2LS7? 2:36PM (7/14/2008)
Hmm. So much for the folks on here who said that mpg doesn't matter for the wealthy.
Luckily, there's enough pricing headroom on the S-class for M-B to make a hybrid getting the mpg up to middle-of-the-pack levels and get sales back on track.
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Ligor 3:00PM (7/14/2008)
you don't thisnk the fact that their investments are seeing drops in 6= figure digits ahs more to do with it rather than the extra $2k/year more on gas?
maybe this article needs to include a bit more research
Dude 3:00PM (7/14/2008)
Maybe it still doesn't matter.
The new S-Class is ridiculously ugly. That's got to be playing a part in the sales decline.
Torrent 3:15PM (7/14/2008)
Or maybe the Hyundai Genesis is taking sales.
Geeky1 3:29PM (7/14/2008)
Why not:
Perhaps the sales slump is from people that really can't afford the car (i.e. they're making the payments but the purchase was a stretch for them)... That seems to be the case for a lot of luxury car owners around here, whether they're driving a C300 (or a 128i) or an S600/760Li.
There's a big difference between the people that own one of these cars that can just barely make the payments every month and the people who can walk into the dealership and cut a check (and not a rubber one, either) for a new S600. If you can truly afford a near-$100k (or near-$200k, in the case of the S65) car, gas prices are of little concern to you.
Chris 3:35PM (7/14/2008)
This has more to do with the new "debt effect", formerly known as the "wealth effect".
Matt 5:10PM (7/14/2008)
Did it ever occur to anybody that perhaps gas prices weren't really a factor, but that spending $85-150,000 in the face of a depression/terrible economy/bad housing/car market/etc was perhaps viewed by some, even those with money, as a BAD IDEA?
why not the LS2LS7? 7:19PM (7/14/2008)
You both make good points. Overall spending on cars is just plain down.
I prefer to think of it more along the lines of people are less optimistic and perhaps just don't see themselves as wealthy as they used to. So some consider whether buying a car this expensive with running costs this high is really a good idea for them.
You can argue that it's the up-front costs that are scaring them, or you can argue it's the running costs. I don't think it's possible to be sure which side of the coin is the bigger factor.
TJ 2:37PM (7/14/2008)
Why is this surprising? this is the oldest of the luxo-barges available in the $80-130k range... seems to be a typical aged model rundown to me...
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psu48187 2:56PM (7/14/2008)
Are we talking about the same S Class? Didn't they go on sale in 2006 for the 2007 MY? The A8, XJ and 7 Series are all much older. The LS is about the same age as the current S Class
Seminole 2:58PM (7/14/2008)
Excuse me, but what the heck are you talking about?
The new S-Class was introduced in 2007. The new Lexus LS was introduced the same year as well. The 7 series is the design since 2001. The Audi A8's design has been around since 2003. The Jaguar XJ has been around since 2002.
The Mercedes is the newest of all the cars in it's class.
Cary 12:29AM (7/15/2008)
No, try 2006 as a 2006 model in the rest of the world. You know, rest of world = not America.
HotRodzNKustoms 2:43PM (7/14/2008)
People not being able to take imaginary money that is not actually there out of their houses which are now upside down to buy a car they cannot afford is not helping much either.
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Bill P. 2:45PM (7/14/2008)
My aunt traded in her previous-gen S500 for a GL450 after looking at the current S. She decided that the GL would be better for hauling a 6 year-old daughter and her friends than the S. It had nothing to do with the price of fuel, or the vehicle itself.
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Ben 2:51PM (7/14/2008)
I gotta tell you, I haven't been hurt by the price of gas at all. I make about the American median income and I drive an Audi A4 that gets about 15mpg in my all city commute. Gas prices haven't changed my driving habits at all and I still plan on upgrading to a large SUV in the near future. Perhaps if most Americans weren't living on credit and going from paycheck to paycheck living way above their means, gas wouldn't be such a problem.
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HotRodzNKustoms 3:10PM (7/14/2008)
+1 so true
BlackCanary 4:31PM (7/14/2008)
Median income is $48K in the US so a $30K Audi geting only 15mpg is a little above the "sensible" means of that income bracket.
An A4 only gets 15mpg? That is horrible. I had no idea these cars got such awfull MPG, they are so small, it is hard to beleive they are so thirsty. The G8 is given a hard time for its consumption, but at least it is large and has a huge V8 engine!
FSM 4:38PM (7/14/2008)
What is your income if you don't mind my asking? I earn well above the median income and still can't bring myself to buy an Audi A4.
Ben 4:51PM (7/14/2008)
FSM, I make $47.5k currently. I have a 2004 A4 3.0 Quattro fully loaded that I bought last year for about 24k (about 45k brand new). The gas milage is horrible for that size of car, but that's likely because of the AWD and the fact that Audi's 6cyl engines aren't very efficient.
But the point of my post is that I try to live within my means by, amongst other things, buying nice cars that are a couple years old but have low miles. As a result, gas prices don't really bug me and I'm not going to cry about the sky falling when prices of food and gas go up for reasons that are very complex and difficult to remedy.
Lx 5:24PM (7/14/2008)
Well said, Ben.