I have a friend who also serves as a mentor to me who has told me on several occasions, "...a business plan is what you present to get money, but once you have the money, the plan typically goes on the shelf to start collecting dust."
There is a lot of truth to that statement.
Granted, intended to be a road map for business the plan typically cannot take into account every situation a business encounters in real world situations which require human interaction to solve.
With the news delivered this week of the almost 18 billion dollar "loan" (read gift) given to US automakers, I wonder how long it is until this global economic meltdown hits other big car makers across the globe.
Specifically lets focus on the Germans.
High end German cars. Companies whose business plans rely on those with money, or who like to pretend they have money. Companies whose cars serve as status symbols that allow their customers to let the rest of the world know they have arrived.
BMW, Audi and Mercedes-Benz.
A story we covered here this week at AutoSpies.com suggested the need for a merger at some point in the not so distant future of Mercedes and BMW for survival.
I am not sure we need to get that drastic, but lets take a look at which German company truly does have the best current lineup, and the best mix of new product in the pipeline for the next 3-5 years.
BMW, Audi and Mercedes all have some great product currently. Although we are all guilty of lining up the different makes and insisting they are true competitors to each other, the fact is they really do appeal to different segments of the market even if price wise they are similar.
So looking at what is currently offered by BMW, Audi and Mercedes along with taking a peek into the future of what we KNOW is coming out of these makers, who do you think is best positioned to not only weather the downturn, but to come out on top?
Readers were quick to criticize BMW earlier this year when a massive write down was taken by the company due to residual values that were much higher than the actual market values of off lease vehicles. This write down was quickly accompanied by low finance rates however I still see a lot of advertising from BMW promoting heavily subsidized leases. Will this ultimately help or hinder BMW?
Mercedes like BMW has taken part in the subsidized lease approach, but mainly on their entry level C-Class models. Across the board subsidized leasing isn't the formula used to move cars at most MB dealers, however low interest rate financing has been in play for most of this year. Of course Mercedes is also straddled with the stigma of Chrysler, and with the pending implosion there, Mercedes still could be hurt by the outcome of Chrysler as they still own a portion of the failing American company.
Audi has dabbled in a little of everything to help move product offering subsidized leasing rates as well as low finance rates. The big advantage Audi brings to the table is the fact that it is part of a much larger family of cars with very deep pockets. This fact alone helps to cement the future of Audi as well as guaranteeing a continual product flow as platforms will be shared with other offerings.
The big determinate throughout will be product.
All three have some great products right now. This isn't a fan boy issue, this is a statement of fact. All three have some great products that appeal to a very broad spectrum of buyers, and for the most part choosing from the current offerings will not leave the buyer unsatisfied.
But what about the future?
Audi is offering supercharged V6 engines in place of V8's, BMW is bringing diesels to the US and Mercedes recently introduced us to the newest generation of their diesel offerings.
Obviously the effects of $4 gas hasn't been lost on the Germans, however will they be prepared to answer the needs of consumers when and if (and I think it is more when, not if) the next crisis hits.
Of course expensive gas isn't the only concern. Consumers are a finicky bunch, is the product currently in showrooms and in the pipeline the right product for the right time? It won't matter how good it is if people won't buy it.
A couple good examples are the Mercedes CLS and BMW X6. The CLS was an instant hit when it first came to market, but it quickly faded into obscurity as fads often do. The X6 as well makes a strong fashion statement, but will it wear well - and if not what comes next?
Agent 001 has struck up some pretty good conversations with his CEO stories of late, I am not asking you to be CEO, I am asking for an executive level summary of which manufacturer is best positioned through product and planning to come out of the global economic meltdown stronger and healthier. And since product IS the driving force, a full analysis of that product is in order to make final judgment.
Are you up to the task?
More importantly, are BMW, Audi and Mercedes up to the task?
We'll let you decide that.