Maybach - media articles

The cost of Prestige
Competition in the luxury car market gets stronger
By Aaron Kirchfeld

The luxury automobile market promises much prestige but little profit. Yet this has not held back Germany's three largest automakers, Daimler Chrysler, Volkswagen and BMW, from battling for bragging rights and doing whatever it takes to lure elite customers.

In an attempt to outperform VW's Bentley and BMW's Rolls-Royce, Daimler unveiled in July its own competitor, the 6.2-meter (20.5-feet) long Maybach, whose sticker price of $330,000 not only guarantees each buyer the highest of motoring quality, but a “personal liaison manager,“ whose duties include everything from planning vehicle service to booking entry passes for upcoming Formula 1 races. For those who would prefer to be their own chauffeur, Daimler presented the “smaller“ 5.7-meter long Maybach in Paris on Thursday.

Maybach service is designed to be as “personal as the car itself.“ To this latter end, Daimler Chrysler built a EUR10 million ($9.8 million) outfitting center in Maybach's production headquarters, Sindelfingen, where customers can pick and choose from over 2 million ways of equipping their high-end luxury car. This includes a range of 17 paint finishes for the exterior and an array of wood and leather for the interior. The car's standard equipment includes a television, DVD player, a refrigerated compartment, a telephone and a four-zone climate control system.

Daimler's biggest handicap in this fledgling venture is the name, arguably the single most important factor for buyers in this market. Daimler chose to revive the Maybach brand, rekindling memories of a luxury car that hasn't rolled off the assembly line since World War II. The name also pays homage to Wilhelm Maybach, who in 1901 co-designed the first Mercedes with Gottlieb Daimler, and whose son, Karl Maybach, began building luxury limousines in the 1940s. With the name and the car to back it up, Daimler hopes to fare well in the very small, but increasingly competitive high-end car market.

Not to be outdone, Volkswagen plans on investing more than EUR770 million during the next 10 years in Bentley, which it purchased back in 1998. The price range of up to $360,000 qualifies Bentley for the $250,000 luxury car threshold, even though the newest models are on the sportier and more “affordable“ side.

To prove that sportiness and luxury can come in the same package, VW organizes exclusive test-drives at race tracks around the world. Understandably, invitations are only sent to prospective buyers, who on average are 52-year-old males with an annual household income of $15 million to $18 million. They commonly arrive at these events in Ferraris or corporate jets. VW hopes that these events will convince the buyers to add a Bentley to their car collection and draw a clear distinction between Bentley and its soon-to-be step sister, Rolls-Royce.

BMW wrestled Rolls-Royce away from Volkswagen, which had paid EUR700 million for Bentley and Rolls-Royce, after proving that it had the rights to the name because of its previous alliance with the Rolls-Royce aero-engines manufacturer.

Although the official transfer of ownership from Wolfsburg to Munich takes place in 2003, BMW has already re-designed the car and begun taking orders. To preserve the exclusivity of the Rolls-Royce, BMW plans on selling no more than 1,000 cars each year. VW says as many as 9,000 Bentleys will roll of its production lines, the largest percentage of which will be the under $200,000 priced Bentley GT Coupe, which VW hopes will expand the boundaries of the luxury market.

BMW also plans to attract buyers with exclusive extras such as golden tissue boxes and buffalo leather seats. Anyone disappointed by the fact that the “silver angel“ that dawns the hood of each Rolls-Royce is not really made of silver, can, upon request, receive the gold-plated version. BMW is banking on these incentives and their reputation for winning customers over.

There are 7.1 million millionaires worldwide with more than $26 trillion in their pockets, according to a study by consultants at Cap Gemini Ernst & Young and Merrill Lynch. The Institute for Automobile Economics in Nurtingen estimates that only about 3,000 of these millionaires will actually buy one of the luxury cars. But as it also points out, the potential prestige from producing these cars is also worth the risk. Sep. 27

 

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