MB to target younger drivers with Financial Services

[renault12ts]

That's a fair comment however your assuming that £30k is a small amount of money these days when it isn't.

I'm a partner in a small property firm I don't see how thats relevant?

It's not about the £30k today...it's about what £30k was worth in 1999 v what it is worth today.

Someone on £30k pa in 1995 was doing all right...today they would not be(in a comparative sense, not in absolutes, in case anybody is offended).

The relevance of the "what you do" question was me being intrigued as to how you can throw so much cash at cars in one year. Personally building your business may be wiser in the long term since, as you say, you are young and have time on your side.

 

[nick mercedes]

All prestige manufacturers face the same dilemma and have adopted the same business model

But the business model does not add up.

You have a prestige car with a 6.3 litre engine as an example, they list at £75kodd, people can have one for 3+36 £500 a month. £20k in rentals at least £40k in depreciation. Somehow £20k goes missing.

Same with the £160 a month Vauxhall, £15k car £4k in rentals, and then the car is £4995 on a forcourt somewhere £6k vanishes...

 

[Steve320]

Isn't there a degree of inevitability in the route MB have taken though, borne out of material and manufacturing technology over the last 20 years? Material science has led to cheaper materials that make it harder to differentiate 'quality', whilst computer controlled manufacturing has taken out cost and human variability. In a business environment where you're not quite Rolls Royce, Bentley, Ferrari etc. and facing those below you on the quality brand ladder catching up, where do you go?

 

[John Jones Jr]

The bottom line is MB aren't a charity, they are a global corporate business and have to answer to their shareholders, who demand growth and value for their investments. R+D cost on a new model/technology is huge, has to be paid for and a few diehards in smoking jackets wanting exclusivity would have sent them down the SAAB conclusion years ago.

All prestige manufacturers face the same dilemma and have adopted the same business model, to survive you need a model range that crosses demographics and feeds long term customer loyalty....today's A Class youth is tomorrow's SL63AMG.

Every A Class etc that's sold to a "youth" means money in the kitty to develop cars like the SL and S class, so embrace it because without it not many of you will be driving Merc's in 5 years time ��

I'd agree with some of what you said (bar the SAAB comparison) but and it's major but. What M-B were selling back thirty years ago was classed as a quality product, top of the pops in terms of mass produced cars, which was an accepted fact back then. Not any longer.
I'd have reservations too about flogging to the younger market that it automatically generates long term customer loyalty, the youth of today are far better informed and have less loyalty when it comes to buying almost anything (one click on the interweb will keep them up to speed) and they are far more willing to try different products from different manufacturers, thus the big push over recent years to offer finance, PCP's, dealer contributions etc. The days of hearing my Dad always drove a Ford, BMW or Merc are long gone.
It could be said that M-B today are living off a reputation that's long gone too.

 

[grober]

Isn't there a degree of inevitability in the route MB have taken though, borne out of material and manufacturing technology over the last 20 years? Material science has led to cheaper materials that make it harder to differentiate 'quality', whilst computer controlled manufacturing has taken out cost and human variability. In a business environment where you're not quite Rolls Royce, Bentley, Ferrari etc. and facing those below you on the quality brand ladder catching up, where do you go?

Interesting question. Well if exclusivity is out the window and you still want to stand out from the crowd you have to deliver on the brand name virtues in the brochure- a quality product that's reliable-state of the art tech/ electronic gismos --with attractive styling that stands out from the crowd- a large degree of personalisation in car colour engineand transmision choice trim levels and hence price - excellent value for money after sales customer care for servicing etc. That's what your rivals will be offering also. While MB headquarters in Germany may be wanting to move into the youth mass market I would venture MB UK have some way to go to embrace this new buying demographic. If they want success in the youth mass market they will have to up their game somewhat to compete.
So far they have a bit to go.
Best-selling cars 2015 | Auto Express

ps percentage growth rates are a relative measurement not an absolute so should perhaps be viewed with caution as an indicator of increased market penetration?

 

[Rory]

But the business model does not add up.

You have a prestige car with a 6.3 litre engine as an example, they list at £75kodd, people can have one for 3+36 £500 a month. £20k in rentals at least £40k in depreciation. Somehow £20k goes missing.

Same with the £160 a month Vauxhall, £15k car £4k in rentals, and then the car is £4995 on a forcourt somewhere £6k vanishes...

It only happens to that extent in the UK - elsewhere cars hold their price much better than here.

Look at the US - MB's are cheaper when new, but at 3 years old the values are about the same. So depreciation is lower. In Europe, used prices are higher.

 

[Bellow]

Corporate average fuel consumption - isn't that one of the reasons MB has to sell smaller cars?

As for targeting a more youthful market with the A-Class, wishful thinking/corporate BS I suspect given that what I see is them being driven by empty nesters. The only way MB get an under 65 yr old in an A-Class is when its owner has the grandkids.

 

[StuartK]

It's not about the £30k today...it's about what £30k was worth in 1999 v what it is worth today.

Someone on £30k pa in 1995 was doing all right...today they would not be(in a comparative sense, not in absolutes, in case anybody is offended).

The relevance of the "what you do" question was me being intrigued as to how you can throw so much cash at cars in one year. Personally building your business may be wiser in the long term since, as you say, you are young and have time on your side.

I agree about the business statement but life's for living and I tried the Mini after a month I though sod this lol.

I could die next week so what the hell cant take it with you

 

[wongl]

Starting salary has definitely gone up in relative terms since our government introduced university fees for all. It seems that our employers did not value our degrees as much financially when it was "free".

Back in the eighties, it took me circa eight years before my annual salary as a professional engineer caught up the price of the entry level Mercedes (manual, cloth seats and without air-con).

My daughter who started work this year after graduating from Uni this summer has a starting salary that is comfortably more than the price of the entry level Mercedes (complete with auto box, climate control and full leather). This, together with the low cost of finance means that she can easily afford a brand new Mercedes without breaking any sweat.

This is a good thing for our graduates, since no body really benefits from having a "free" university education in my opinion. Somehow when something is given away for free, it is not valued as much as something that one has to pay for.

 

[renault12ts]

Starting salary has definitely gone up in relative terms since our government introduced university fees for all. It seems that our employers did not value our degrees as much financially when it was "free".

Back in the eighties, it took me circa eight years before my annual salary as a professional engineer caught up the price of the entry level Mercedes (manual, cloth seats and without air-con).

My daughter who started work this year after graduating from Uni this summer has a starting salary that is comfortably more than the price of the entry level Mercedes (complete with auto box, climate control and full leather). This, together with the low cost of finance means that she can easily afford a brand new Mercedes without breaking any sweat.

This is a good thing for our graduates, since no body really benefits from having a "free" university education in my opinion. Somehow when something is given away for free, it is not valued as much as something that one has to pay for.

But, they didn't have the A Class in the 80s, a car which costs much less than the C Class, which, in W201 guise, was the entry level car in the 80s. And if you count the cost of finance in, which is how they will be bought...it's much less than the cost of getting into MB in the 80s.

As for salaries...compare them to the price of houses.

 

[wongl]

But, they didn't have the A Class in the 80s, a car which costs much less than the C Class, which, in W201 guise, was the entry level car in the 80s. And if you count the cost of finance in, which is how they will be bought...it's much less than the cost of getting into MB in the 80s.

As for salaries...compare them to the price of houses.

It is still a good thing that the cost of cars have come down while salaries have gone up. The price of houses outside of London has not gone up that much. It is only London, with its crazy green belt restrictions complete with overseas buyers outbidding each other that is really driving up house prices in London.

With graduate starting salaries starting around mid-twenties, a graduate can easily afford a 3-bedroom house up in say Leeds.

 

[renault12ts]

It is still a good thing that the cost of cars have come down while salaries have gone up. The price of houses outside of London has not gone up that much. It is only London, with its crazy green belt restrictions complete with overseas buyers outbidding each other that is really driving up house prices in London.

With graduate starting salaries starting around mid-twenties, a graduate can easily afford a 3-bedroom house up in say Leeds.

My first house, bought in 1985 is now valued at 10 times what I paid for it. There is no way my newly qualified daughter will get a mortgage that high...and I don't live in London. And yet, comparatively, her salary is higher than what mine was then.

 

[wongl]

My first house, bought in 1985 is now valued at 10 times what I paid for it. There is no way my newly qualified daughter will get a mortgage that high...and I don't live in London. And yet, comparatively, her salary is higher than what mine was then.

Here is a 3-bedroom house in Leeds for £140K. Based on a starting salary of £25K, a couple will have a joint income of £50K, using a conservative mortgage of 3.5 times joint salary, this will easily cover the £140K.

The deposit required is another matter, but this is where the bank of mum and dad comes into play, no?

3 bedroom terraced house for sale in Autumn Terrace, Leeds, West Yorkshire, LS6, LS6

 

[Bellow]

It is still a good thing that the cost of cars have come down while salaries have gone up. The price of houses outside of London has not gone up that much. It is only London, with its crazy green belt restrictions complete with overseas buyers outbidding each other that is really driving up house prices in London.
.

Plus 50% UK average in a 4-5 year period, double for those in Scotland - which is hardly London.

 

[renault12ts]

I can't imagine anyone having a £50k joint salary and wanting to live in that!!

 

[wongl]

I can't imagine anyone having a £50k joint salary and wanting to live in that!!

Don't we all want things we cannot afford? Borrowing more than we can afford is what got the country into trouble in the first place.

In the end we all have a choice

- work or not work
- live at home or rent
- rent or buy

But youngsters these days often prefers NOT to work because they perceive that some jobs are below them, or at parts of the country where it is less desirable to live. It used to be a luxury to be able to choose where someone lives and works, but now it some how become a choice!

As a contractor making a living in the nineties and even more recently, I worked in Bristol, Basingstoke, Leicester, Reading, Swindon, Portsmouth, Chicago, Leeds, London and now Hong Kong. One has to take on some accountability and go get a job where one can find a job.

What was the old saying again? Ah, yes, "On your bike".

Nothing wrong with that.

 

[S205-FTW]

TL;DR

• The cost of cars has come down in relative terms over the last 30 years.
• Mercedes are trying to appeal to a wider market and shed their 'old man' image. Shock horror - VAG and BMW have been expanding their range for years.
• Old men don't like younger men driving around in cars they couldn't afford when they were the same age.
• Traditionalists/old men don't like to be associated with younger men who drive a 'premium marque' as they 'tarnish' the brand for them.
• Same old men can't/don't understand why others don't want/need to outright own a depreciating asset.

 

[Deleted member 6183]

TL;DR

• The cost of cars has come down in relative terms over the last 30 years.
• Mercedes are trying to appeal to a wider market and shed their 'old man' image. Shock horror - VAG and BMW have been expanding their range for years.
• Old men don't like younger men driving around in cars they couldn't afford when they were the same age.
• Traditionalists/old men don't like to be associated with younger men who drive a 'premium marque' as they 'tarnish' the brand for them.
• Same old men can't/don't understand why others don't want/need to outright own a depreciating asset.

Salt and Vinegar with them?

 

[Deleted96908]

Salt and Vinegar with them?

Humple pie for seconds?

 

[wongl]

Plus 50% UK average in a 4-5 year period, double for those in Scotland - which is hardly London.

The graph only goes up to 2008. The housing market essentially rebooted itself in 2008/2009 and the rise since has been much gentler.

The £140K house in question was last sold in 2004 for £139K and now on the market for £140K. My maths might not be that great at this time of night, but I cannot see a grand increase on a £140K house to be any near 50%. Sorry.

3 bedroom terraced house for sale in Autumn Terrace, Leeds, West Yorkshire, LS6, LS6