Quote:
Originally Posted by tvpierce
Here's an interesting statistic: in '92, my 190E/2.3 was MB's bottom-of-the-line offering. The sticker was $29,000. A bottom-of-the-line 2007 C Class lists for $29,000. Adjust for inflation, and it kinda makes you wonder how MB can 1) sell a car for effectively two-thirds the cost of what their cars sold for 15 years ago, 2) yield a profit and 3) still maintain quality.
|
That's an interesting question. It is an often-discussed fact her at MS that the beancounters took over from the engineers sometime in the early/mid 90's, resulting in cars with lesser quality and lower engineering standards. But there is one thing you forgot to include in your equation: the demon that is known as vehicle leasing.
The model for who buys a new MB has changed a little. When your 92 was sold, leasing was still a relatively newer phenomenon, and more directed towards people who were payment sensitive. MB advertising of the day never mentioned price, let alone something as crass as monthly payments. They made their money on the car. Nowadays all the money is in financing. GM, Ford, Chrysler...they don't make a penny on new car sales. The cars become loss-leaders in order to sell a finance contract, which is the real profit-driver right now. And there is no easier way to make money with a payment-oriented buyer than with a lease, because almost nobody can work backwards to the capitalized cost of the lease in order to know what they actually paid for it.
Your $29K car in 1992 would have had a substantial profit margin in it, both for the manufacturer and the dealer. Today's $29K car (with lesser quality, of course) has a much narrower profit margin, but facilitates the sale of a profitable finance contract. Economies of scale also contribute. I would imagine that MB sells substantially more cars of all classes right now, since they can make them so much more affordable to drive with a lease payment.