Mercedes To Reduce Options On Passenger Vehicles?

[Alx]

Automotive News has run a story today apparently based on an interview with Dieter Zetsche, in which they state that Mercedes will soon start offering less options to customers in an effort to boost manufacturing productivity.

In the article, Zetsche was quoted as saying "We will surely continue to offer greater variety than a brand such as Hyundai," but then went on to say that they will reduce overlapping offers, such as two sport options on the same model.

I'm not going to read too much into the story, because the story is based on one direct quote from Dieter, but I am going to use this opportunity to share my view on Mercedes' options.

I hate them. I completely and utterly hate them.

For example, let's look at the 2007 Mercedes S-Class. As you already know, it's a technological wonder: Night View Assist, Distronic PLUS, Active Body Control, all are amazing features Mercedes has implemented in their latest flagship sedan, and all are options not included in the $86,175 price tag.

Then you look at some of the other options. Wood on the steering wheel - $900. Chrome door handle inserts - $79. Trunk handle - $19. Are you kidding me? I'm spending $85,000+ on Mercedes' flagship sedan, and I'm going to be charged $19 for a trunk handle?

Now, let me paint a different picture for you. Imagine you've seen the all-new 2007 S-Class, and you've read about all its amazing features. Then imagine you go to Mercedes' website, and the price you see includes everything you've read about. There's no need to go through and spec your own model, because it's all included with the price. It would be a miracle.

Obviously, there's limitations to this method. An S-Class with every conceivable option would cost well over $100,000, and the sticker shock in and of itself would lead to lost sales. But I'm not asking for every available option to be included, here instead is what I'd like to see:

1. All main options included. If 90% of all customers add a specific option, it should be included in the price. You already know everyone wants it, so why force us to endure watching the S-Class' base price rise with every added option. Spare us the pains, please, and just include them.

2. Stupid options included. Trunk handle, chrome surrounds around the headlights, chrome-plated tire valve stem caps - save us the additional $200, include all of them, and have us specify whether or not we want them with a simple yes/no checklist. Simple.

3. Keep Less Popular Options Optional. Obviously with Mercedes, there will be some options the majority of customers won't want or don't opt for. $700 for power window blinds? I'll pass. Keep these options as options, but as mentioned earlier, if the total cost amounts to $20, do everyone a favor and just include them.


I already know what you're thinking - wouldn't adding certain options drastically increase the base price of the S-Class? My answer: no. Here's why:

By adding certain options as standard, the production process would be simplified, because every vehicle would have them. Mercedes' productivity would improve, and better productivity equals lower prices.

Secondly, if every vehicle had the options, the price for the parts would go down. Anytime something is purchased in bulk, the price goes down, due mainly to increased productivity on the supply end.

And finally, the S-Class would transform itself into a rolling advertisement. Let's say for example that I had never seen a new S-Class before, but my best friend just happened to purchase one and come pick me up for a round of golf. Although I might be impressed by a standard S-Class without any extra options, I'd be much more impressed if he showed me an S-Class loaded with Night View Assist, Distronic PLUS, etc. Of course, the more impressed I am, the more likely I am to purchase a new S-Class of my own. This leads to more sales for Mercedes, which ultimately leads to better prices for consumers.

Do I think everyone would benefit from the above mentioned scenario? Absolutely. Do I think this will ever happen? Nope.

Not as long as there's teams of people hired to squeeze the price of the S-Class (and every other vehicle) down to a specific price point.

Sure, these options will eventually come standard, but when they do, there will be a host of other new and cutting-edge options that replace them, and the vicious cycle will repeat itself.

It's the way of the automotive world.

 

[LaArtist]

cool post.. i agree with almost everything he says..
some options need to be standard.. allthough very much is standard on a S class.. but the most popular.. non superexpensive options.. like distronic..should be standard..lets see what zetsche does..

 

[Alx]

I think they will do it, and for the prices they charge it would help justify it. There is no reason for certain options to be options, they should be standards with the package.

 

[MikeJ]

Let's see... the American S-Class buyer gets his car for less money than anyone else (for comparison, starting price here is $130,460 for an S320 CDI), and most likely with the highest standard equipment level as well. Yet, the complaint we see here is not altogether without reason.
(While the U.S. is most likely the largest market for S-Classes, it's not enough to warrant the fitment of all the toys to all the cars delivered in different markets, which would be required in order to simplify the process, right?)
The part about having those chrome things and whatever as yes/no options is spot on, and of course there are some things that should be standard on a top-end luxury car. However, there are those people who see all the fancy new things only as one more thing to go wrong or never bother to learn to use them anyway. As all the thingies add to the complexity of operating the vehicle, why should people who never wanted them in the first place be forced to deal with them? I'm technologically inclined, I can operate pretty much everything but when it comes to people like my parents that's not the case - mom wouldn't dare to touch them and dad wouldn't bother.

 

[Merc1]

Not sure I agree here. There are some that don't want all the gee-whiz items and then there are those that do.

Then you look at some of the other options. Wood on the steering wheel - $900. Chrome door handle inserts - $79. Trunk handle - $19. Are you kidding me? I'm spending $85,000+ on Mercedes' flagship sedan, and I'm going to be charged $19 for a trunk handle?

Except for the wooden steering wheel, those are not "options" they are accesories. Big difference. Every single car maker in the world has a small to large accessory catalouge with all kinds of silly stuff like this. Mercedes shouldn't be singled out here.

That said I think Mercedes do better by including more standard equipment, but the truly fancy stuff should be left as options.

If we're going to talk about Mercedes' options, we can't leave out Porsche. Porsche has the largest options list in the world by far! You can get leather covered air vents in a Porsche is so desire. Many of their better paint colors are over 3K!

Then there is the issue of differing markets in which a car like the S-Class is sold. I think it would be hugely expensive for them to build in more options as standard only to have to strip them for certain markets.

I'd have to look at each Mercedes model and see what I think should be standard, obviously a long process...lol! The S-Class could use some more standard equipment, but not much IMO.

Lastly, the average person buying a 86K car isn't troubled by 10K in options. If 10K puts the car out of their reach they couldn't afford it in the first place.

M

 

[Mr. Mercedes]

The way Mercedes prices their cars is ludicrous. First of all the base price is quite often at least AUS $15,000 higher than the equivalent Audi, BMW or Lexus and then the prices on their options is unbelievable:

1. Distronic Pluc - AUS$7000
2. Entertainment Package - AUS $9500
3. Adaptive xenon headlights - AUS $4500
4. Decent Alloy wheels - AUS $4500

Its astounding that they can charge these prices for options when they are standard on a relatively lowly lexus IS250. Well BMW and Audi also suffer the options addiction like Benz, at least theirs are reasonably prices.

Also, you could easily add 30-40 G just adding some of the technological wonders that they rave on about. They should shut up about them, unless they plan to standardise them or make them reasonably priced. Its quite embarassing really that the flagship S-class would come with less standard equipment than say an IS or GS lexus. I'm so over MB's bullshit pricing strategy.

And it clearly is profiteering as far as I am concerned. If other car makers can manage to include these as standard, why does MB demand thousands of dollars more. Production costs are not that much higher!!! For example, according to Hella Germany, Xenon headlights cost about $150-200 dollars more per unit that regular headlamps. But then MB goes ahead and charges $4G plus for them.

Yes yes, buyers of these cars can afford to pay, but MANY MANY buyers of these cars are also not stupid and value for money IS important to them. Quite simply MB screw you for everything they can get out of you. It may work for them now, but sooner or later its going to catch up to them if they don't change their ways.

 

[Merc1]

Here is the actual article:


http://autonews.com/apps/pbcs.dll/article?AID=/20060306/SUB/60303104

I've always said (in the E-Class thread I think) that Mercedes needs to do a real sports package on their cars, not just the cosmetic AMG package. The best thing to do would be to combine the two, sportier suspension and the AMG styling enhancments like they have on the SLK this year in the U.S. The previous AMG package on the E-Class was way too expensive (like 5K) for just cosmetic enhancement. Now the E has a proper sports package.

I'm all for streamling production, but I still think a Mercedes should offer more in the way of options than other cars, especially on their high-end models. More standard equipment and leave the gee-whiz stuff as options is the way to do it. Look at what the market wants as standard and do it (if $$$ feasible), well at least some of the reasonable items. Everything can't be standard.

M

 

[cawimmer430]

With respect to the Mercedes options stratgey, I agree it's a bit outdated. They're still practicing the technique which they did in the '70s and '80s. Times change and they should adapt, especially given what the competition does.

On the bright side however, there are now more standard things in Mercedes' cars like never before. Before the facelift, you still had to specify AIR-CONDITIONING on your W203 C-Class! The W168 A-Class had no standard electric windows or A/C, you had to order them. On the current W203 and W169 A-Classes, A/C is standard (thought the W169 A-Classes by default still comes with manual windows!). In that regard, MB has become a little more realistic.

 

[Yperion]

The CEO of DC shouldn't compare Mercedes with Huyndai cause he is giving the wrong impression.

 

[Merc1]

The CEO of DC shouldn't compare Mercedes with Huyndai cause he is giving the wrong impression.

Yeah I thought that too. He shouldn't have mentioned any other company in that sentence.

M

 

[EnI]

It's funny car makers are advertising featurs that are only available in a few month, and not at the momment.

Eg. BMW with HUD - not available at launch, yet advertised.
MB S -class: many new features delayed
Lexus new LS: some features advertised today will e available in Spring 2007 (car comes in Fall 2006)

What's the point of doing this? Stretching / relocating the demand?