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Mercedez Benz News Mercedes Plans On Adding Ten AMG Models This Year

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Mercedes is going a bit overboard with the number of AMG models it offers. At the moment, you have a choice of 38 models that have gone through the AMG treatment. But Tobias Moers, chairman of Mercedes-AMG says more are coming.

 

"We're going to expand our portfolio to 48 different models by the end of the year," Moers told Automotive News.

 

The obvious question is 'WHY?' It comes down to growth. Sales of AMG models rose 40 percent to 68,875 vehicles. This is most likely due to the introduction of less-expensive models such as the CLA45 and GLA45.

 

We wouldn't be surprised if there are '43' models such as the C43 Coupe and E43 that are part of these expansion plans.

 

Source: Automotive News (Subscription Required)


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I like their commitment to power and performance. I still think I favor E450 vs E43, but it is the same car, and in a way giving it the AMG treatment for styling and suspension and steering set up makes more sense.  This also lets them batle BMW and S4, S6, S7 Audis, because Audi has RS cars too.

 

48 models sounds like a lot until you think C43, C63, C63 S and apply that to sedan, coupe, convertible.  That is 9 "models" but all a C-class. 

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Stupid MB has truly decided to become a CHEAP ASS auto company, no different than a Ford or Chevy. Just turned their product line into a mass crapo series of style numbing stupidity.

 

Where is the luxury auto maker that MB used to be, clearly not that now.

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AMG=SS

 

cobalt SS, MAlibu SS, etc.

 

Germany's model proliferation will come back to bite them in the butt

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They became "cheap ass" by offering more high trim and higher cost models?  First the CLA and GLA were too cheap and hurting the brand, so they roll out 10 premium trim models and that hurts them.

 

Every model they have has an AMG trim that adds $20,000 or more to the price of a base car.  The "43" models aren't priced yet, but I'd imagine a C43 will start around $50k, an E43 around $65k, so they are still pushing prices up.

 

Mercedes is making use of an advantage they have.  Their crossovers are built on rwd chassis, their architectures are flexible, and made for different body styles and to fit 4, 6 or 8 cylinder engines.  Lexus can't put a GS-F engine in an NX crossover, Cadillac can't put a CTS-V engine in an XT5.  Lincoln, Acura, Cadillac, Lexus all chose to buld their crossovers on fwd sedan platforms, now they are going to get hammered with horsepower and be irrelevant in the performance crossover market.

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It's adapting to customer desires.

 

People want the intangible of having the AMG badge from the factory.

 

Now the thing is Mercedes brand equity is probably very high, and for the time being - they have convinced people attracted to Mercedes that them going downmarket isn't hurting them too much. And they are pilfering sales from BMW at the top-end.

 

I think what they're doing is printing money, which luxury carmakers aspire to do.

 

Cadillac is already doing the same - heck people ask about why XT5 VSport isn't a thing or an Escalade-V isn't here. 

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They became "cheap ass" by offering more high trim and higher cost models?  First the CLA and GLA were too cheap and hurting the brand, so they roll out 10 premium trim models and that hurts them.

 

Every model they have has an AMG trim that adds $20,000 or more to the price of a base car.  The "43" models aren't priced yet, but I'd imagine a C43 will start around $50k, an E43 around $65k, so they are still pushing prices up.

 

Mercedes is making use of an advantage they have.  Their crossovers are built on rwd chassis, their architectures are flexible, and made for different body styles and to fit 4, 6 or 8 cylinder engines.  Lexus can't put a GS-F engine in an NX crossover, Cadillac can't put a CTS-V engine in an XT5.  Lincoln, Acura, Cadillac, Lexus all chose to buld their crossovers on fwd sedan platforms, now they are going to get hammered with horsepower and be irrelevant in the performance crossover market.

And that is why you see crazy discounts on all their products including the HUGE discounts on S class.

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I like their commitment to power and performance. I still think I favor E450 vs E43, but it is the same car, and in a way giving it the AMG treatment for styling and suspension and steering set up makes more sense.  This also lets them batle BMW and S4, S6, S7 Audis, because Audi has RS cars too.

 

48 models sounds like a lot until you think C43, C63, C63 S and apply that to sedan, coupe, convertible.  That is 9 "models" but all a C-class.

It is a lot no matter how you try to sugarcoat it and it just dilutes the AMG branding.

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Problem for the brand (mercedes) is, AMGs traditionally top all lists for the worst depreciation on the market.

A CL55 AMG from the early 2000s ends up costing you $100,000 in depreciation after 10 years! That's 85%.

Maybach 1.0 costs you $200,000 in 10 years!!

 

By making everything available as a 'AMG' (and I just read that in India, MB discontinued the 4.7L V8 in the s-class…. unless you pony up for the mercedes-maybach trim level), it's going to skew MB's average value retention.

 

It's just the typical Corporate mindset: Revenue Above All Else.

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I don`t see any issue with milking the cash cow. Every company does this.

 

I bet if GM or Ford were in this situation no one would complain, they`d just say it`s good business, and smart move.

 

Except Mercedes-Pretendz. Get that garbage outta here....

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I doubt if very many M-B owners keep them 10 years or care about depreciation after 10 years...lease them for 2-3 years, get a new one..

Edited by Cubical-aka-Moltar

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I dunno about that. 
Previous gen S-class was around for 8 years before getting replaced, there's no incentive (out-of-warranty repair bills aside) to get a new one if it's the same car.
I'll have to ask my one customer what year her's is- I believe it's at least 5 years old.

Anyway, owners who do buy are seeing whatever slice of the massive depreciation, still running well into the 10s of thousands of dollars at the AMG level.

 

I just find it interesting that the top trim levels fall faster than anything else.

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Problem for the brand (mercedes) is, AMGs traditionally top all lists for the worst depreciation on the market.

A CL55 AMG from the early 2000s ends up costing you $100,000 in depreciation after 10 years! That's 85%.

Maybach 1.0 costs you $200,000 in 10 years!!

 

By making everything available as a 'AMG' (and I just read that in India, MB discontinued the 4.7L V8 in the s-class…. unless you pony up for the mercedes-maybach trim level), it's going to skew MB's average value retention.

 

It's just the typical Corporate mindset: Revenue Above All Else.

AMG doesn't hurt resale value, in most cases that would help it.  Cars that cost $200,000 new are going to have $150,000 in depreciation in 5 years.  Mercedes actually has one of the better residual values by % among luxury brands.  And Mercedes also doesn't have a lack of demand for their V12 cars that tank in value.  The people buying them have more money than sense, and last year they actually made a move to increase V12 engine production.  

 

Daimler's corporate mindset is not revenue above all else, the mission of the past couple years has been to get Mercedes operating margin to 10%, because that is where BMW and Audi are.  

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I dunno about that. 

Previous gen S-class was around for 8 years before getting replaced, there's no incentive (out-of-warranty repair bills aside) to get a new one if it's the same car.

I'll have to ask my one customer what year her's is- I believe it's at least 5 years old.

Anyway, owners who do buy are seeing whatever slice of the massive depreciation, still running well into the 10s of thousands of dollars at the AMG level.

 

I just find it interesting that the top trim levels fall faster than anything else.

Mercedes cars are on a 7 year life cycle with a refresh after 4.   The Corvette is on an 8 year cycle, the C4 ran for 15 years.  The Silverado and F150 7-10 years before a new model comes out, yet people are still buying them.   Most of the industry has cars on 6-8 year cycles, yet people still trade in for new, some people keep a car 10 years.  Depends on the buyer's preference.  If they lease, they will trade it in after 3 years, if they buy they'll probably keep it 10 years.  That could hold as true for a Ford Focus as it does for an S-class.

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Retaining 40% of $50,000 costs you $30,000. Retaining 60% of $150,000 costs you $60,000.

 

'Percentages' is a 'feel good' metric. What matters is the bottom line, the 'number on the check'.

In the above example, one would be a fool to brag about their 60% value retention.

 

Fact is, AMG cars top lists of the worst depreciation models- they cost you MORE to own, not less.

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By that logic, a Chevy Spark is a better car to buy than an Escalade.  And Escalade will lose $54,000 in depreciation in 5 years.  The Escalade has a 5 year cost to own of $87,000 according to NADA guides.  Yet it is Cadillac's number 2 seller and GM's #1 profitable car.   Why are people buying Escalades?    If depreciation is so bad and driving customers away, they should just stop making the Escalade by that logic.  

 

Which of course makes no sense, they will keep building Escalades as long as there are people willing to pay for them.  And GM will take their money and laugh all the way to the bank.

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Luxury buyers buy excess and also pay for excess at the trade-in.

 

But then again, that's why leasing is king in luxury.

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By that logic, a Chevy Spark is a better car to buy than an Escalade.  And Escalade will lose $54,000 in depreciation in 5 years.  The Escalade has a 5 year cost to own of $87,000 according to NADA guides.  Yet it is Cadillac's number 2 seller and GM's #1 profitable car.   Why are people buying Escalades?    If depreciation is so bad and driving customers away, they should just stop making the Escalade by that logic.  

 

Which of course makes no sense, they will keep building Escalades as long as there are people willing to pay for them.  And GM will take their money and laugh all the way to the bank.

That is nowhere even close to comparable to what Balthazaar is talking about and you know it. And your Escalade logic can be easily applied to the fools who continue to buy the fifty year old G-Wagon. I'm sure MB gets a good chuckle on their way to the bank each day, as a result. 

Edited by surreal1272

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The reason why the poor residuals are benefitting the German makes is that buyout is something the luxury buyer rarely does.

 

Or in the case of a trade-in, they win there as well.

 

People have different ownership styles, and some people want the own the latest and greatest for a fixed time period, not until the car physically breaks down because of age and wear.

 

Ultimately, it's nonsensical to not cater to those buyers - not everyone wants a nice small Chevy or Ford that they can make one lump sum on.

 

And no, wealthy people leasing an S-Class or AMG vehicle is nothing like leasing a CLA.

 

And have you seen these ATS leases? It is irrefutable. Cadillac intends to fully compete against the German makes, their top brass is a pack of Germans, and saying it isn't so is stupid.

 

And Cadillac ATPs, again, is a weighted average. However, the majority of future Cadillac growth will come from models lower in their range. Things such as an XT3 and CT3. The ATPs will take a plunge, maybe not in America - because small Cadillacs are an unproven paradigm, but absolutely over the world.

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By that logic, a Chevy Spark is a better car to buy than an Escalade.  And Escalade will lose $54,000 in depreciation in 5 years.  The Escalade has a 5 year cost to own of $87,000 according to NADA guides.  Yet it is Cadillac's number 2 seller and GM's #1 profitable car.   Why are people buying Escalades?    If depreciation is so bad and driving customers away, they should just stop making the Escalade by that logic.  

 

Which of course makes no sense, they will keep building Escalades as long as there are people willing to pay for them.  And GM will take their money and laugh all the way to the bank.

That is nowhere even close to comparable to what Balthazaar is talking about and you know it. And your Escalade logic can be easily applied to the fools who continue to buy the fifty year old G-Wagon. I'm sure MB gets a good chuckle on their way to the bank each day, as a result. 

 

His original point is how AMG cars depreciate fast, and cost $50,000 or more in depreciation.  

 

So let's compare 2 cars using NADA projections.   An S550 with a $97,400 MSRP depreciates $64,299, but an E63 with $101,700 depreciates $56,364.  So the AMG brand car holds higher % of value and loses less total dollars.  That debunks his theory that AMG badges hurt resale value, they help it.

 

An Escalade Platinum 4WD with $91,950 MSRP loses $56,333 in 5 years of depreciation.   Loses 61.2% of value over 5 years.

 

Let's compare to the G550, $115,400 MSRP, depreciation of $62,981.   Loses 54.6% of value over 5 years.  So yes it loses more total dollars, but it costs $24,000 more when new.  

 

Throw in a 3rd vehicle, a 2016 GL550 with MSRP of $91,300, virtually the same as the Escalade Platinum.  The GL550 loses $49,843 over 5 years, over $6,000 less than an Escalade will lose.  Balthazar wanted to say how horrible of a purchase a Mercedes is because it looses a big dollar amount in money, the Escalade is even worse, why not criticize it?

 

That is my counter to the argument,  personally I don't think the people spending $100,000 on a vehicle could care at all how it depreciates.  These are people that have money to burn, they'll spend 1 million on a house, $50,000 a year on property taxes and not really care.   Personally, I also like to buy a used car, after that first 3 years of depreciation has hit.

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Escalade Platinum loses $61% in 5 years?

Mercedes SL loses 41% in ONE year.

SL 65 AMG costs you an average of $15K per year in depreciation. In 10 years that's $140,000 +

 

I know a number of multi-millionaires personally; they care about money just as much as anyone, maybe more. They'll spend it on themselves, but they absolutely care about value.

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