BMW Closing In On The Kill In US Luxury Car Race - Can They Catch Mercedes-Benz?

really? That's weird, because a 3-Series leases for over $100 more than a comparable C-class and has all year. The same is true for a 5-Series lease vs. an E-class. X3's are more than GLK's and X5's are more than ML's (and even GL's) as well. In the face of eroding global sales Mercedes "countered" in the U.S. a long time ago, they threw their cards on the table and went all in here in the states. So the questions now are
a) will the yearlong Mercedes giveaway result in "winning" the U.S. sales title this year, and
b) whether other brands will "counter" what Mercedes has been doing all year.
Considering how small the lead is despite the ridiculous programs Benz has been running, I'm going to guess "no" to both.

You're right, both Benz and BMW changed their lease programs for November, and now the payments are closer. However, there's more to that story:

1) All those BMW payments include $750 in Loyalty cash many people won't qualify for, and

2) did you notice the BMW leases were just stretched from 36 to 39 months for November, and the Benz leases were shortened from 36 to 30 months? So in order to get the payments similar (as of October 31 when BMW and Benz were both running 36 mo leases they were most assuredly not similar) you have to pay for the BMW 30% longer than you do the Benz. How do the payments compare if you do a 30 mo lease on the BMW's? Hint: they'd be much higher than the Benz leases. To put that into a perspective more people will be familiar with, a standard bank loan for a car is 60 months, and while you can go longer the longest most people finance a car for is 72 months. This payment comparison is the equivalent of comparing payments on a standard 60 month loan to a 78 month loan. You are paying a lot more for one car than the other, even if the payments are (now) similar. And that doesn't change the fact that two days ago (October 31) the payments weren't close to similar when the terms were the same. BUT, to someone looking only at the payments, yes, at least now one isn't $100/mo more than the other, which they most definitely were.

Mercedes-Benz cut its prices for the sake of higher sales and as a result its profit margin has eroded.

Daimler CEO, Dieter Zetche, mentioned Mercedes-Benz will not meet its profit margin of 10% of sales next year. Audi already beat the 10% profit figure in the 3rd quarter of 2012. The earliest Mercedes-Benz will meet that 10% profit margin forecast is 2014, four years later than originally planned.

http://www.businessweek.com/news/2012-10-24/daimler-cuts-2012-profit-forecast-after-earnings-decline

...One thing's for sure...Neither will ever catch up to Lexus quality. What a shame!

Looking at the lease rates is only part of the sales story. How much more would a Porsche Cayenne cost without VW making the "body" it shares with the VW Toureg? Or Lexus and Infiniti using the corporate parts bin. I bet you would find more people back in their Toyota Highlanders and Camrys if the Lexus lease payments were up $175-$225 a month. This is just an estimate to illustrate my point about the savings with part sharing, not which autos are better.

What happens to the value of these cars at such steep discounts when they come off lease. Residuals and resale must take a hit unless the manufacturer props up the value artificially. Does not sound like solid means of building profit margins and high ROI per unit.