Europe crisis, China slowdown ding Mercedes
The luxury car market has generally remained insulated from Europe's debt troubles, but that may be changing.
The luxury car market in Europe has generally remained insulated from the debt crisis but that might no longer remain true with automakers sounding gloomy about their forecasts.
Even Porsche (owned by Audi), whose sales are up 15% in the first half of the year, recently announced that it is hesitant to increase production as it anticipates sales growth to slow down in 2013.
The Chinese auto slow down has resulted in car makers reducing prices and offering greater discounts in order to entice buyers. Moreover, Daimler's Chinese sales have only increased 6% through August compared to double-digit gains for BMW and Audi. Added expenses related to new launches such as the A-class will also impact the short term profitability. Mercedes-Benz reported an operating profit of €2.57 billion for the first six months of the year. Previously, the automaker had forecast the full year's profit to be similar to last year's €5.19billion.
Margins already under pressure
Daimler already has lower margins compared to BMW and Volkswagen. Daimler's operating margins in the second quarter were 8.6% compared to 11.6% for BMW and 11.5% for Audi. Shifting production to low cost hubs such as Hungary, where labor wages are one-fifth those in Germany should help widen margins.
Daimler has taken some other steps too, such as forming a partnership with Renault and Nissan, which could see the alliance manufacturing an off-road vehicle for Mercedes and cars for Nissan's luxury brand, Infiniti. Rising costs and a weak macro-economic environment have forced automakers to forge alliances in order to share costs and technologies. On the other hand, Daimler's truck business, has seen strong growth with performances in Japan, Russia and the U.S. leading the pack.
We have a price estimate of $61 for Daimler's stock, which is about 20% above the current market price.
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Not everyone should drive a Mercedes. That's the point of them.
Newer cars all around are just not as well made. But Mercedes are built to last. Sure, there are maintenance costs, but there's the MB experience when you take it in for servicing. It blows Chevy, Ford, etc out of the water, as well as it should for the price.
My husband had 2 early 80s deisels that were amazing and my 87 560sl is such a treat to drive.
This is my third Mercedes. I would not drive anything else. 179.00 for an oil change? where do you live? Mine are 111.00 and that is once a year!
Drive whatever you want but I want the best and that to me is Mercedes.
ALL CARS ARE DESIGNED TO LAST FOR JUST SO LONG.. EVEN WITH REGULAR MAINTENANCE AND CARE, CRAP HAPPENS !!! ITS THE WAY THE WORLD WORKS FOR NOW. ULTIMATELY HERE'S MY VIEW FOR ALL. IT'S A REPOST OF MY EARLIER COMMENT:
FOR THE IGNORANT PEOPLE, OR THE MAJORITY OF THE POPULATION THAT WOULD READ THE FOLLOWING POSTS AND BELIEVE THAT THIS IS ALL THERE IS TO LIFE..WAKE THE HECK UP !!!!!!! WHAT THE HECK DOES THE CAR INDUSTRY HAVE TO DO WITH ANYTHING?? CENTRAL BANKS AND GOVERNMENTS ARE INCREASING IN POWER BY CONFUSING AND DUMPING DOWN THE MASSES FOR FINANCIAL GAIN CAUSING THESE IGNORANT STATEMENTS. THOSE WHOM LISTEN TO THIS MINDLESS RHETORIC AND REMAIN ARGUING OVER POINTLESS POINTS OF; WHO KNOWS MORE? OR WHO IS SMARTER ?AND WHOSE CAR IS COOLER LASTS LONGER GETS BETTER MILEAGE? IT IS YOU WHO ARE ULTIMATELY RESPONSIBLE FOR THE FAILING NATION WE ARE IN AND YOU Those whos FAIL TO LISTEN AND ACT IN PROPER RESPONSE AS YOU ALL KNOW YOU SHOULD DEEP DOWN INSIDE. . INSTEAD YOU GIVE IN TO THE STATUS QUO AND BECOME COMPLACENT, ALLOWING THE ABSOLUTE POWERS THAT BE... TO CONTINUE TO CORRUPT ABSOLUTELY. DEMISE WILL FALL UPON US ALL, EVEN THEM WHO THINK THEY ARE ABOVE THE COMING DECONSTRUCTION OR DEATH ITSELF. HOWEVER YOU SEE IT WHETHER IT BE "THE CIRCLE OF LIFE" OR " LAWS OF NATURE" NOT TO MENTION THOUSANDS OF YEARS OF HISTORY THAT DOCUMENT THE RISE AND FALL OF SEVERAL SOVEREIGN NATIONS THAT WERE SUPPOSED TO BE "TOO BIG TO FALL".. THE TERM "TOO BIG TO FALL" IS THE DUMBEST COINED PHRASE OF OUR TIME.."ROME WAS TOO BIG TO FALL" WHERE IS THAT GREAT ROMAN EMPIRE TODAY? NOTHING IS TOO BIG TO FALL. HELL, WASN'T THE TITANIC UNSINKABLE? JUST A FEW ERRORS IN THE COMMAND STRUCTURE AND YOU HAVE CATASTROPHE... IT DOES NOT HAPPEN SLOWLY AND GRADUALLY FOREVER. THERE ARE THOSE LAST CRUCIAL MOMENTS BEFORE A DAM BREAKS. UNSEATING SLOWLY, BUT WHEN IT BREAKS- THE DAMAGE IS DONE WITHIN SECONDS AND THERE IS NO WAY TO SHORE IT UP AGAIN FOR QUITE SOMETIME IF EVER. HISTORICALLY, MOST MAJOR DAMS THAT HAVE RUPTURED HAVE NEVER BEEN REBUILT. JAPAN JUST HAD THE NUCLEAR MELTDOWN OF SEVERAL PLANTS THAT HAD X AMOUNT OF FAIL SAFES THAT WERE RELIED UPON ONLY TO WATCH EACH ONE FAIL ONE AFTER THE OTHER. IF YOU THINK THAT THE RADIATION LEVELS EMITTED FROM THOSE CATASTROPHES WERE SMALL COMPARED TO THE TWO NUCLEAR WEAPONS THAT "WE THE PEOPLE OF THE UNITED STATES" DROPPED ON THAT COUNTRY SO MANY YEARS AGO.. YOU'RE IN FOR A RUDE AWAKENING AND SO ARE YOUR FUTURE GENERATIONS. AND THOSE PEOPLE THAT WILL EXPERIENCE THE SAME IF NOT WORSE MALADIES THAT EFFECT THOSE EXPOSED. CUT THE HEAD OFF OF THE BEAST THAT IS LEADING US INTO HELL...GREED, LUST, POWER, GLUTTONY, HARLOTRY ETC. ETC.
$179 to change the oil in a 'Benz. Mine charges less than half that including synthetic oil. Best to change garages.
Wife just put 30,000 miles on her used E350 4-Matic and never saw the inside of a garage yet. That doesn't include the $12,000 in damages it incurred when she was rear-ended by a Jeep Grand Cherokee going 45 mph. Thank God she wasn't driving a Suburu.
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