Mercedes Follows Ford?

[hawk20]

I had this conversation at main Honda dealer on Friday when I took my wifes Accord in for its annual service. £125 inc vat, they also washed and vacuumed it. The Accord is not a Mercedes yet still packed with electronics, their hourly rate is just over £60. The showroom is glass and chrome and 'free' coffee is just as available as at my MB dealer 2 miles up the road. So what is the difference?

First we need to make sure we are comparing like with like. Let us take A services and B services including oil and all materials and including Vat. This is important. The oil for a Merc diesel is synthetic and if you have the particulate filter to meet latest Euro requirements you need the low ash oil at £13 per litre. Great stuff. Increases engine life and so on but it ain't cheap. I know from other Merc owners that Indies often (not always) use cheaper oils unless you ask. If you need 8.5 litres it's a load of money just for the oil.

Here are accurate figures for my S class 320 cdi registered December 23rd and needing low ash synthetic Mobil oil: -
I get serviced at Pentagon Mercedes at Totton, same company as owns the Chichester dealer. Here are todays prices, firmly checked. If you wish to confirm phone 02380 863999 and ask for Sarah, or for Greg the service manager or John the foreman. I have an S class 320cdi. It has done 11k miles since Dec 2005 and the computer says it will need an "A" service in 4100 miles. So approx 15,000 miles between services. The "A" service, including all parts, oil etc is £225 IF you have the particulate filter for Euro 4 (sadly I do and the Low ash synthetic Mobil oil is £13 per litre). Then after another 15,000 mils or so comes the "B" service and that costs £390 (or £350 if I did not have the particulate filter). These prices are ex vat. If you want the Inc Vat prices, by adding 17.5% I get £264 and £458 or a total of £722 for the first 30,000 miles. This gives an average service cost of £361 inc materials and VAT, per 15,000 miles or approximately 2.4p per mile. So what are you going to save by using inferior oil and a non-Merc dealer -could it be as much as 1p per mile? It's not really significant in the overall picture.

An A class would, of course, cost far less. My brother just had his first service on an A class and was surprised how little it cost.

For comparison, on fuel I get an all-round average of 30 miles per gallon (I do quite a lot of short runs at 27mpg and on longer runs get 37mpg). With diesel now at about a pound per litre or £4-54p per gallon, fuel costs me approximately 15p per mile.

So servicing is really the small change of motoring, especially if you add in the depreciation, interest on capital and so on. Now to be fair to Mercedes, servicing with a dealer also gives you a free breakdown service anywhere in Europe. On another thread the AA quoted £103 for Euro cover for a year (see what will it cost me to drive to Florence). And then there is also the 30 year rust guarantee which we know from numerous threads is effective and not ruined by absurd small print.

Finally, look at the Service Plus contracts for 3-6 year old cars up to 120,000miles. Virtually a guarantee, it seems from other threads, and offering fixed price, discounted cost servicing and all repairs for remarkably good prices.

Lastly, we all fool ourselves on servicing costs. Not that long ago cars were serviced every 6000 miles and my Honda Accord never cost less than £200 per pop. (That's over 3p per mile). Before that it was every 3000 miles. Now we go up to 15,000 between services and the costs per mile are really not at all bad especially when you allow for very dear synthetic oils and the value of a Europe wide breakdown service. Lexus charge £80 per year for their breakdown service.

 

[hawk20]

Here is the news on the A class and the Honda.
I take the latest Honda Accord and the latest A class. The A class figures are for the 160cdi (despite the name it is 2 litres) and are A service at about 12,500 miles or say one year equals £159 inc all materials and Vat.
B service at 25,000 miles would be £260 plus Vat which equals £305 inc all materials and Vat.

Honda Accord (from two Honda dealers in Hampshire)
PETROL Ist Year £163 inc Vat and all materials. £193 for Diesel
PETROL YEAR 2 (say 25,000 miles) £333 inc Vat and all materials and for the DIESEL £363.

 

[OmniCognateNeutronRangler]

Hawk20, you say the "A-class would, of course, be far less". I assume you mean less thatn your S-Class. Why undoubtably? My C-Class is DEFINATELY more to service than your S-class (Chichester quote £510 for a B Service excluding anything it may need like plugs, pads, etc.) Tony Perslow reckon a typical B service on my C240 would be in the area of £600.

You also say the service interval is 15000 miles. Not on my C-class it's not, you're lucky to get 10,000. That's more often than my Audi Diesel used to get between services.

You have obviously been lucky with the servicing costs of your S-Class but I think you are in the minority. I don't doubt you know your own cost but I think you are making way to many assumptions about the costs of other cars. My figures (on a cheaper car) don't even come close to yours (or wouldn't if I hadn't opted for Service Plus)

 

[jberks]

The oil for a Merc diesel is synthetic and if you have the particulate filter to meet latest Euro requirements you need the low ash oil at £13 per litre.

Do bear in mind that this is the full retail Halfrauds price - a dealer buying by the the drum will be paying considerably less, though admittedly the indie was complaining that the latest Mobil1 low ash oil that he is just put in my car, is substantially more expensive than the previous version.
The problem is that the initial service charge is often almost acceptable, with an A service as you say around £264 (though from memory that sounds a bit cheaper than I last paid). However, an A service is simply an oil change, little more - and takes less than 1 hour to complete. I very much doubt that their total cost is more than £80 inc parts.
In any case, a simple service charge is probably bearable. The problem comes when anything else arises. New pads for example - ok the parts are pricey anyway, but not compared to the £100 or so they undoubtably charge for labour. Add in the odd bush or other worn component and stories of 3 figure service bills on 3.5yr old cars are common.

 

[SLinKyjoe]

the service interval on mine has changed. when new it was needed at 9500 which i assume was the default. it is now at 11600 and as the car is 8200miles in, it will no doubt be arouind the 12600mile marker when its finaly due.

might know more after next week as i have 650mile journey in it next week which will bring them closer.

I have no idea abut the cost of the first service and i really dont want

 

[Blobcat]

Here is the news on the A class and the Honda.
I take the latest Honda Accord and the latest A class. The A class figures are for the 160cdi (despite the name it is 2 litres) and are A service at about 12,500 miles or say one year equals £159 inc all materials and Vat.
B service at 25,000 miles would be £260 plus Vat which equals £305 inc all materials and Vat.

Honda Accord (from two Honda dealers in Hampshire)
PETROL Ist Year £163 inc Vat and all materials. £193 for Diesel
PETROL YEAR 2 (say 25,000 miles) £333 inc Vat and all materials and for the DIESEL £363.

I'm not entirely clear why you are comparing an A class and an Accord when they are form such differing class' of cars. Your prices for Honda are quite a bit larger than what I paid annual for 2ltr Excutive Tourer. My MB A services have varied from £200 to £300 and B Services from £500 to £1,000

 

[hawk20]

I'm not entirely clear why you are comparing an A class and an Accord when they are form such differing class' of cars. Your prices for Honda are quite a bit larger than what I paid annual for 2ltr Excutive Tourer. My MB A services have varied from £200 to £300 and B Services from £500 to £1,000

Because people were saying how would A class customers cope and you raised the Accord in an earlier thread saying how cheap it was to service so I got quotes from two Honda dealers and a Merc dealer on both cars.. both with aircon, both with two litre diesels, to see if Hondas really were so cheap. Turned out their price was about the same as the Merc -in fact a tiny tad dearer and the Merc includes 'free', Europe-wide breakdown cover.

I am sure you will agree it is important to compare like with like or we mislead. Your B service for £1000: surely that was not just a service? The main dealer for Southampton, Totton, Winchester, Chichester (and Portsmouth??) charges under £500 for an S class 320cdi. I gave the quotes and the phone number for any who want to check. Perhaps I have shares in Pentagon Mercedes -or even own it outright- and tell all these lies to increase the turnover, profits and my dividends. Yes, that must be it.

 

[Blobcat]

You are correct in that my 'B' Service (which was £1,083) was for more than just a service. However that is the whole point, it is almost impossible to have just a service done at Mercedes. There is always a few observations or recommendations that need to be done.
I am not doubting the prices you have been quoted. I doubt however that many owners only pay the prices quoted for the service.
If you do not keep your car for long or very many miles then it is not so much of an issue.
One thing you will need to be carefull of Hawk is that once your car goes over 13,000 miles it may decide that it wants a B service rather than an A.

 

[hawk20]

You are correct in that my 'B' Service (which was £1,083) was for more than just a service. However that is the whole point, it is almost impossible to have just a service done at Mercedes. There is always a few observations or recommendations that need to be done.
I am not doubting the prices you have been quoted. I doubt however that many owners only pay the prices quoted for the service.
If you do not keep your car for long or very many miles then it is not so much of an issue.
One thing you will need to be carefull of Hawk is that once your car goes over 13,000 miles it may decide that it wants a B service rather than an A.

It is, of course, also true of other makes that other things may need doing. I am just trying to compare like with like. I know a few Merc owners who get the service done at an MB dealer -to keep up FMBSH, free breakdown cover etc etc- but go to an 'Indie' if any major jobs show up.

Having done 30k to 40k miles per year for most of my adult life, I bought new, kept for two to three years, then passed on to be mainly driven by my wife, for the next two to three years, by which time I would have another to pass down. Worked well and we were trouble free till I had an E with gearbox problems in the late 90's. Like others on this forum, I got grumpy and nasty about it and went and bought a Honda CRV. Very good. But withdrawal symptoms brought me back after a few years.

Now we just have one car and do 15-18k miles per year of largely private motoring. Since Mercedes choose to wreck our residuals (both by discounting new cars and by them and their dealers running excessive demonstrators all sold unnecessarily early), even I have given up the joys of buying new and have now bought secondhand for the first time since my twenties. Huge saving.

Will be off on a 3500 mile motoring holiday in Europe in a couple of weeks. Hoping not to use the free European breakdown service!

 

[SLinKyjoe]

there is a good story here about the merger.

it has some facts about what we have been seeing for the last number of year, and I know Mercedes have changed their tune recently, but it does prove where the issues originated.

http://www.geocities.com/MotorCity/Downs/9323/dc.htm

a few good comments here, but based on opinion and not purely factual. interesting none the less.

http://www.allpar.com/ed/old/oldresp.html

some up to date stuff.

http://money.cnn.com/2006/08/21/news/international/bc.autos.daimlerchrysler.merger.reut/index.htm

and here is a different view point.

http://www.pbs.org/newshour/bb/business/jan-june98/benz_5-7.html

and the typically insular Yank view. (Its good tho)

http://www.allpar.com/ed/2002/enthusiasts.html

this is a bit old now, but it still worth looking at.

http://www.businessweek.com/2000/00_15/b3676086.htm

 

[jberks]

Hawk,
I am always wary of service quotes as even a B service varies wildly. Sure a first B would probably come in at the price, but look at the list and you quickly find items that are done at age and mileage and not on the initial quote. Usually all small items but they often add up to a few hundred. I rang for a quote on a D service and was told that they wouldn't know the price until they plugged it in. Wary of giving them a blank cheque, I booked in with the indie.

Service prices are normally set and can look fine, but that's not necessarily what you pay. That's the best case price assuming they only do the minimum on the schedule. I would be interested in what the difference is in hourly labour charges, and whether they charge in 1hr or 1/4 hour increments, as this is where the real price difference comes in. It's when they want to charge you 1hr for 10 mins work that I get grumpy - e.g. when I was billed £25+parts+vat for fitting a new wiper blade.

In the old days, they'd whip out and pop a bulb in, or bob a new blade on. My dealer even used to supply and fit remote batteries foc. It was always, take a seat sir and we'll see to it and then here's your keys, goodbye - never here's your invoice! Ok you knew they'd get you at the service but that's fair enough. My gripe is that the prices remain high, but that 'we care more about you and the car than about profit' attitude has gone. Ask for an indicator bulb and I suspect you'll be quoted 30 mins to fit! I was quoted a day for a 30 second job, my dad, 1hrs labour for something that he did in 5 mins and my dealer wanted me to book the car in for a day so they could decide whether I really needed a sill trim plate (it was missing) and then to rebook it for another day when the part came in. They wouldn't take my word and order it before hand. When they finally agreed to order the part - they didn't actually do it. All these things erode the goodwill and trust to the point that I've walked away.

To further polarise matters, that level of 'we care' service still exists at the indie, yet they charge half as much. I bob in and they sort it. If its a small tweak, it's 'don't worry about it'. As a result, if I did return to the dealer, I'd feel guilty as I now feel a loyalty towards the indie.

I'm not necessarily knocking the dealers, they probably have to charge what they do to cover overheads, and I want them to make a profit or else they won't be there when I need them. I would actually like to keep it serviced at the dealer, purely for snob value, but as I've said previously, at an extra £500 per year for a lesser service, I can't justify it.

 

[Blobcat]

I think Blassbergs first service was quite a bit over the quoted price http://forums.mercedesclub.org.uk/showthread.php?p=105318#post105318

 

[hawk20]

I think Blassbergs first service was quite a bit over the quoted price http://forums.mercedesclub.org.uk/showthread.php?p=105318#post105318

Yes but had a lot done over and above service. He drives like the wind. At the Port Solent GTG he did Kenilworth to Port Solent as quick as we did it from Lymington! Note on the thread you link to he needed 4 new tyres at only 16k miles and new discs and pads. Really enjoying his 320cdi!

 

[hawk20]

Hawk,
I am always wary of service quotes as even a B service varies wildly. Sure a first B would probably come in at the price, but look at the list and you quickly find items that are done at age and mileage and not on the initial quote. Usually all small items but they often add up to a few hundred. I rang for a quote on a D service and was told that they wouldn't know the price until they plugged it in. Wary of giving them a blank cheque, I booked in with the indie.

Service prices are normally set and can look fine, but that's not necessarily what you pay. That's the best case price assuming they only do the minimum on the schedule. I would be interested in what the difference is in hourly labour charges, and whether they charge in 1hr or 1/4 hour increments, as this is where the real price difference comes in. It's when they want to charge you 1hr for 10 mins work that I get grumpy - e.g. when I was billed £25+parts+vat for fitting a new wiper blade.

In the old days, they'd whip out and pop a bulb in, or bob a new blade on. My dealer even used to supply and fit remote batteries foc. It was always, take a seat sir and we'll see to it and then here's your keys, goodbye - never here's your invoice! Ok you knew they'd get you at the service but that's fair enough. My gripe is that the prices remain high, but that 'we care more about you and the car than about profit' attitude has gone. Ask for an indicator bulb and I suspect you'll be quoted 30 mins to fit! I was quoted a day for a 30 second job, my dad, 1hrs labour for something that he did in 5 mins and my dealer wanted me to book the car in for a day so they could decide whether I really needed a sill trim plate (it was missing) and then to rebook it for another day when the part came in. They wouldn't take my word and order it before hand. When they finally agreed to order the part - they didn't actually do it. All these things erode the goodwill and trust to the point that I've walked away.

To further polarise matters, that level of 'we care' service still exists at the indie, yet they charge half as much. I bob in and they sort it. If its a small tweak, it's 'don't worry about it'. As a result, if I did return to the dealer, I'd feel guilty as I now feel a loyalty towards the indie.

I'm not necessarily knocking the dealers, they probably have to charge what they do to cover overheads, and I want them to make a profit or else they won't be there when I need them. I would actually like to keep it serviced at the dealer, purely for snob value, but as I've said previously, at an extra £500 per year for a lesser service, I can't justify it.

There's a lot in what you say. Maybe I've been lucky so far. The more I read on forums the more I think the service plus contracts look good value. Cover virtually everything and the prices quoted seem very reasonable. Peace of mind too.

 

[jberks]

There's a lot in what you say. Maybe I've been lucky so far. The more I read on forums the more I think the service plus contracts look good value. Cover virtually everything and the prices quoted seem very reasonable. Peace of mind too.

If you have a predictable annual mileage and want to continue using the dealer, I couldn't agree more.

 

[hawk20]

If you have a predictable annual mileage and want to continue using the dealer, I couldn't agree more.

Do nasty things happen to you then, if you go over the predicted mileage?

 

[OmniCognateNeutronRangler]

financial things happen to you. It's like having a company car on a lease. If you go over the mileage (and they check the car at the end of the contract) they charge you extra based on the extra miles. No prizes for guessing what happens if you do less miles than you expected

 

[johnmc]

Hi,
At the end of the day Merc will be maximising their profits. The more re-use of parts you have, the cheaper it gets to make the cars. VAG have been using this approach very successfully for a long time. I run a Seat Alhambra
and the build quality is identical in every way, same components as the VW Sharan, but with the Sharan you get a long list of options to pick from and a more upmarket badge. With the Seat the options list is real short, keep 'em standard and sell them cheaper.

VAG are very careful at positioning their cars, and for that reason they make great money. I can see Merc looking at BMW/Audi and thinking "where can we position a car in the range to take money away from BMW/Audi with minimal cannibalisation of our products?" The Crossfire and 300C will be doing exactly that, and the lack of a Merc badge should minimise people moving to Chrysler from Merc. If you do move away they still get cash from the sale in the group. Great idea that should help Merc back to normal profit. It's the best way to efficiently address multiple market segment needs, more power to them as it will keep development cash flowing into Merc for new models.

Bye!
John

 

[hawk20]

Hi,
At the end of the day Merc will be maximising their profits. The more re-use of parts you have, the cheaper it gets to make the cars. VAG have been using this approach very successfully for a long time. I run a Seat Alhambra
and the build quality is identical in every way, same components as the VW Sharan, but with the Sharan you get a long list of options to pick from and a more upmarket badge. With the Seat the options list is real short, keep 'em standard and sell them cheaper.

VAG are very careful at positioning their cars, and for that reason they make great money. I can see Merc looking at BMW/Audi and thinking "where can we position a car in the range to take money away from BMW/Audi with minimal cannibalisation of our products?" The Crossfire and 300C will be doing exactly that, and the lack of a Merc badge should minimise people moving to Chrysler from Merc. If you do move away they still get cash from the sale in the group. Great idea that should help Merc back to normal profit. It's the best way to efficiently address multiple market segment needs, more power to them as it will keep development cash flowing into Merc for new models.

Bye!
John

Yes, just what Rover said.
Just what Ford said with Jaguar. How's that working out?

 

[Kam100]

Just my opinion, but back when we first purchased our first family mercedes cars, was in the late 80's and i agree with some of the comments before, that the cars were seen to be more expensive back then, and discounts weren't achievable at all. Nowadays, the commercial world is more competitive then ever. I don't think Mercedes would survive on their own under current climate withouth either going mass, or merging with another company (taking over, or being taken over.. whichever)..

One thing which i think is hurting the Mercedes Brand, is MB Direct centres. Basically wholesale Mercs.. come and get them.. I negotiated £3k off the list of out already cheap C220 CDI and managed to secure a superb finance deal out of house from MB, and have done three more since.

Were looking at a New S320 CDI for my father a few months back, as we thought we would beable to have relatively low depreciation driving for a year or so while demand exceeded supply like with most new prestigious models, but on ringing round, i found out most dealers had a 3 week lead, with normal colours/spec combinations, so we decided spending £63k on this car would be a bad move. Now im seeing S320CDI's for around £55k on the autotrader from external MB traders, and even Direct centre's are telling me not to secure any S320's for any more then 58K for my clients!

Not at all what i expected, basically they appear to be £10k over list.. so we're waiting for them to drop to around £45-50k before moving on a personal car. 05 Plate S320's going for £30k! on pitch, so that means £27-9k for our little arranged discount plan.

Im sorry, but i have very little faith in Merc residuals, due to the mass marketing they have deployed. Was working on a vehicle quotation for a client last week. S65 AMG price new: £148k, 2005/05 with 8k miles with celebrity first owner = £80k on pitch. This car has a residual balloon of £45k after 5 years, so that represents with no deposit, that this super car can be had for less then £1k a month. Hardly prestigious pricing.. Servicing/running will obviously be a different story, but i wouldn't touch any top end Merc right now.

A lot of customers are moving over to Audi for this reason. I think Audi not discounting heavily and following a quite rigid framework for differentiation between their differing price entry brands helps a lot. MB direct has ruined the Merc brand, and major upheaval would be required to bring it back.

The sales manager i was working with last month, was telling me, we knocked out over 250 cars this month, good month.. it shocked me, yeah high sales = good, but i know he has been knocking them out left right and centre, by discounting heavily and clearing stock.. hardly prestigious motoring.