Slash and Burn: How Much Money Has Your Luxury Brand Put On The Hood To Move Inventory?

No surprises here. BMW and Mercedes have been giving huge discounts for at least a year on most of their vehicles.

yeah...but not lexus! those $329 IS leases and $379 ES leases are full retail right?

lexus and toyota cars and trucks have ALWAYS HAD reasonable lease figures, because these exceptionally reliable and durable cars have HIGHER RESIDUAL VALUES.

lease payments are basically the costs of depreciation over the lease term. and if the mfgrs/dealers calculate wrong, they have to EAT the differences as losses.

Gonna be deboosted, but Audi doesn't give away it's leases. Pretty sure you can still lease an M6 for less then an S5 lease, despite the substantial difference in MSRP. I don't know about Benz though, but I doubt they discount like BMW.

What a bucket load of crap. In order for what you said to make sense would be for the Audi to retain their value like manure or for the m6 to never depreciate at all. Btw, audi gives away leases all the time on their a3 and a4, which amount to nearly half their annual sales in the states. Wouldn't expect the a5 to be any better off.

Seeing how poorly Lexus sells in Canada compared to it's german competitors, I wouldn't expect the IS to have good residual value either. That certainly explains the barely higher lease. Just admit that your fellow canadians don't buy into the whole rebadged Toyota as much as your American neighbors.

This article is also a representation of profitability:

Notice how Audi does not appear in the article. Audi does not offer ridiculously cheap lease deals in order to move volume like its competitors BMW and Mercedes-Benz do. Audi is BY FAR the most profitable of the three this year and last.

BMW and Mercedes-Benz are mentioned in the article for their huge discounts, and uncoincidentally, both have failed to make a profit through the first two quarters of this year.

actually the article probably didn't mention audi because the US isn't even a competitive market for audi. hell, even acura outsells audi by 25% in the US market, the supposedly "biggest" luxury market in the world. and that's ACURA... vs audi, whose has been selling cars in the US for the past 4 DECADES. that's absolutely pathetic!!

and you also said, "audi does not offer ridiculously cheap lease deals?"
audi of downtown los angeles:
http://www.audidtla.com/specials/new.htm
$0 money down?? sounds like any broke-ass high-school-drop-out can lease one off the lot.

Wrong, Validus00. The "Biggest" luxury market in the world is China.

When mentioning ridiculously cheap lease deals, I was referring to Audi's higher-end models like the Q5, A6, A8, S5, S4 etc.

You will never find the kind of insanely cheap lease deals on Audi's higher-end/more exclusive models likee you do on BMW's 7-series, M6, or 5-series or Mercedes-Benz's S-class (which is practically being given away), E-Class and maybe even SL.

Actually the biggest luxury market is still the US. China hasn't taken that title from the US yet, but is the largest automobile market that's for sure.

Why even mention a6 and a8 when Audi barely sold any of those. The fact is that a3 and a4 are responsible for half of audi US sales.

MB practically giving S class away with cheap leases?? Making crap up again, tsk tsk.

Validus00, I would certainly call a brand new S550 with an MSRP of $105,000 that is being sold for $85,000 a huge discount.

Don't believe me? Check the Automobile section of this past Sunday's New York Times.

Like I said, Mercedes-Benz uses huge discounts to try and sell its larger/more expensive cars which is a terrible strategy because the larger, more expensive cars such as the S-class, and CL models are the ones that are most profitable whereas the cheaper C-class is far less profitable.

a big discount doesn't automatically equate to "giving them away for free". the s550 msrps at $91,600. so unless that was an ad for a particular s550 with options priced at $105,000 but offered at $85,000, then i can see it as being a huge discount. if not, that's "just" a $5,600 off special.

which also brings us up to the point of audi's competitor to the s550. and frankly it's absolutely amazing how audi's $74,550 a8 undercuts the s550 by $10-20,000, but still manages to sell so poorly.

Validus00, that was a Mercedes-Benz S550 which had options that brought the total price to $105,000. The car was being offered for $85,000. That is a prime example of a huge discount and a reason for Mercedes-Benz's terrible profit numbers for this year.

The Audi A8 is the oldest car in its class by a long, long, margin. People are holding out on buying the A8 because they know the new 2010 model will be a total re-design and will be out next year. Why have the price of your car plummet like a rock once the new body style comes out in a year??

- BMW has long dominated the entry-level market with the 3-series
- Mercedes-Benz has long dominated the high-end market with its S/SL/CL models
- Audi has dominated the mid-level market with its A6 sedan outselling both the BMW 5-series and Mercedes-Benz E-class worldwide.

The fact that Mercedes-Benz has been the clear leader of the high-end market would further explain why Daimler experienced a $2 billion loss through the first half of 2009. The high-end market , which includes the Mercedes-Benz S, SL and CL models, is the most profitable segment. Not many people are going to go out and drop $100-150K on a brand new top-of-the-line luxury Mercedes or AMG variant.

BMW has seen the opposite happen. Although it is a leader in the least-profitable segment per car, the entry-level market, the owners over-leveraged themselves to get the car and now they can't pay their lease payments.

Audi has not only the product mix just right, but also the geographic mix since it focuses heavily on China, a rapidly growing market, whereas BMW and Mercedes-Benz focus on the United States, a market that has essentially collapsed since last September.

people are holding on on buying a a8 because it's been redesigned? i guess a8 buyers have been holding out for years and years because a8 sales have been low for years. holding out for a redesign? gimme a break.

a6 outselling 5 series and E class worldwide? where are the numbers for last year?

now you're claiming that bmw owners are defaulting on their leases?? your poor credibility never fails to amaze us.

foezzy, you are an idiot! first of all, huu is canadian, not a japanese nationalist. secondly, he is not even japanese, but a CHINESE-Canadian.

go crawl back into your anti-jap hate hole. like it or not, the japanese make the BEST, MOST RELIABLE CARS on the planet.

this is amply evident in ANY news clip showing the vehicles of choice in places where there's no nearby dealer to run to, when your unreliable euro or american car hiccups. or downright BREAKS DOWN!

in all the rough parts of the planet, the TOYOTA LAND CRUISER is the #1 vehicle of choice for those who can afford one. for those that can't, just about ANY model toyota is OK too. second and third choices tend to be nissans and mitsubishis.

so EAT those FACTS, and go away to whimper in your little hate hole. your whiny bleating here is getting tiresome.

let's not sidestep the fact that lexus hasn't been able to out-compete its german rivals in canada for years and that the US market is the sole market in the world where lexus can compete with bmw and MB.

The entry level BMW and Mercedes models are more affordable in Canada than the entry level Lexus vehicles. Despite this, Lexus sells very well in all of North America. The HS250 will really keep Lexus #1 in the most important market (U.S.), especially if it becomes the volume seller for Lexus that it is predicted to be.

actually the is250 undercuts the 323i by almost $750 canadian.

the terrible truth to lexus fanboys is that lexus loses in every market except the US, even back in japan. it's downright hilarious.

and in how many of the world markets are the 'prestigious,' 'luxury' audi, bmw and mb brands offered with FOUR CYLINDER engines?

or mere Sixes in the largest luxobarge bodies?

EVERY Lexus LS has a v8 engine, and all the others have at least a high efficiency v6. except for the cheap euro market, lexus has NEVER offered a dinky Four-banger prioor to the HS250. (which ALSO had a powerful electric motor.)

Ever heard of the IS220d? Of course not. They sell like crap, like Lexus in general in Europe. You can guess how many cylinders it has.

BMW doesn't sell inline4s in America. It's actually Lexus who beat them to it lol.

errr... if all the altezza and aristo owners simply switched over lexus equivalents (since those got discontinued), lexus would be able to beat bmw in its home country easily. therefore the argument that "just because the lexus brand has really been existing for 3 years" doesn't make much sense.

it also means that even its loyal toyota buyers don't buying the "luxury" brand, ESPECIALLY if toyota was capable of moving luxury sedans at the same volume bmw and mb had been. you reckon lexus will be able to match bmw in another 5, 10 years? doubt it.

notice how lexus japan doesn't sell the ES, a rebadged toyota mind you. they also don't sell the windom anymore. rebadging camry's isn't going to work in japan.

i did not imply that the hsh competes nor undercuts the 323i. no need to make a comparison there. lexus' volume seller the IS does undercut the 3-series, with and without the same options.

my point exactly. toyota crown majesta defeats the purpose of selling the LS in japan and of lexus as a luxury division in japan, giving the brand's poor reception. considering how lexus and toyota undercuts bmw in every segment by 10-30% (up to 30% if you must include some of toyota's top end cars) in the japanese market, it's pretty remarkable how well bmw sells, especially compared to lexus 2-to-1. and it certainly looks like the japanese have a problem perceiving lexus as a luxury brand that competes with german brands.

at least we cleared up the fact that lexus cars are cheaper than their bmw counterparts in canada. but you said "to make a fair comparison, we'd have to add 20% more onto the msrp of a lexus" because i presume you're suggesting that somehow the dealers are putting 20% premiums on their cars? you're joking right?

you definitely have a reading deficiency as well as problem with simple math. and don't think you can easily fool me by throwing around numbers.

first of all bmw's special offer is only on 2009 models.

323i - $34,900 msrp with freight, PDI, and taxes at 2.90%, $0 down is $748/mo or $44880 obligation.
is250- $33,050 mrsp with freight, PDI, and taxes at 3.90% (2009 - 3.90% for 60 months vs 2.90% for 48 mo), $0 down is $730/mo or $43800 total. lexus' financing plan is $1000 after 60 months.

48mo - $921/mo (2009 323i) vs. $877 (2009 is250), or $44208 (323i) vs. $42096 (is250).

at 72mo it gets interesting:
323i ($651/mo at 3.90%) vs. is250 (%688/mo at 7.59%) or $46872 vs. $49536. that's a mere 5.7% more in lexus finance's pockets compared to bmw finance's. 20% premium my ass.

i love how you exaggerate, insult, and flatout lie just to prove your little point. that's just sad. not to mention your racist remarks and stereotypes. how would you feel if i made references to southeast asian immigrants? exactly.