European Stars and Stripes (Newspaper) - April 2, 1990, Darmstadt, Hesse                                Germans respond to Nippon Challenge by Ferdinand Protzmann new York times when Toyota motor corp. And Nissan motor co. Began shaping plans to make luxury cars one of the first things they did was to buy several Mercedes Benz and Bow autos and dissect them. The West German car makers which have Long dominated the global Market for High performance luxury cars were Happy to return the compliment when Toyota a lexus and Nissan a infiniti models were introduced in the United states last year. Quot we do have a few plexuses and infinities around Here somewhere Quot said Wolfgang Peter head of automotive development at Mercedes Benz in Stuttgart. Some mild gloating Over japanese Start up problems aside executives at Mercedes which is based near Stuttgart and Bay Rische motored Werke which makes Bow and is based in Munich see lexus and infiniti As the first serious Challenge to their Hegemony in the Market for cars costing $25,000 or More. Believing that they build the worlds Best designed most technologically advanced automobiles the germans will respond to the Challenge with new models of their own. Edzard Reuter chairman of Mercedes Benz a Parent Daimler Benz says his company will bring out in Europe a Quot fundamentally new Model Quot every year for the next five. Already this year it has introduced the 190e 1.8 a a higher powered sports version of its 190 compact. In 1991, it plans to bring out an Quot a Quot class a the designation it gives to its top of the line models. Six months after being introduced those models will be available in the United states. Bow has introduced less expensive models of its "3&Quot series in Europe and expects to offer them for Sale in the United states in May. These models equipped with a four Cylinder 16-valve engine that produces 136 horsepower will Start at $21,500, Well below the current Bottom of the line which has a six Cylinder 168-horsepower engine and Sells for $24,650. The Success of lexus in the United states is causing some changes in Bow s american marketing strategy said Karl h. Gerlinger president of Bow of North America inc. The company is trying to Cut costs by installing better inventory management he said hoping to reduce a dealers inventory to 45 Days from 80 or 100, it is also fighting for younger buyers Quot our studies show that the number of customers leaving us for lexus or infiniti Are a  the company a strategy is two fold he said. First in april Bow will introduce its 318is Model in two and four door versions priced at about $20,000 in the United states. Then it will introduce a new Model at the High end of the luxury Range. A we Are going very strongly after the entry level buyer Quot Gerlinger said. Quot at the same time we have shown strength at the top of the line by introducing the 850 Coupe in january. There is no Point in comparing it to either lexus or infiniti. It s so technically advanced that it is really a different . The 850i, which will be introduced in Europe in june will have a sophisticated suspension system and rear Axle the company says will make the car unusually stable reduce tire Wear and improve handling. It will also have a six Speed manual transmission. The germans also say their flexible production systems and full product lines will allow them to fill Market niches that lexus and infiniti cannot. That rather smug attitude has several roots including Germany s Rich automotive tradition the conviction that european car buyers Are More Brand Loyal than americans and the Strong position Mercedes and Bow now enjoy in the european Market. They also believe that lexus and infiniti Are largely West German cars like this Bow 318is were the Model for japanese automakers. Daimler Benz chairman Edzard Reuter has big plans for the next five years. Designed to Appeal to american rather than european tastes in luxury cars. The German View May prove Correct but in some ways it is reminiscent of How . Auto Industry regarded japanese Competition in the 1960s. And the japanese manufacturers have several formidable weapons at their disposal beginning with the fact that lexus and infiniti Are priced below comparable Mercedes and Bow models. In the United states the infiniti q45 costs $38,000, and the lexus ls400 $35,000. While . Prices for German cars Are affected by changes in the Mark Exchange rate they Are still considerably higher. Lexus advertisements contend a Bow 735i Sells for $54,000 and a Mercedes 420 Sel for about $61,210. The German manufacturers say those prices Are inflated and that $49,000 and $57,000, respectively Are More accurate. But the lexus and infiniti models  transmissions leather upholstery electric sunroofs Tilting steering wheels and anti lock brakes. On a Mercedes or Bow they Are options that Cost extra. The germans also say that a fairer comparison with the lexus and infiniti would be the Bow 5-series and the Mercedes 200-series. These cars Are priced just slightly higher than lexus or infiniti. Price differences aside the lexus and infiniti have Strong Selling Points including a much softer ride and quieter engines than Mercedes and Bow. A the germans have a rather spartan concept of automotive luxury a said an analyst at a big West German Bank in Frankfurt. A they emphasize performance not  this value for the Money strategy has made Japan s car companies phenomenally successful in the world Market for Small and mid sized autos. A the japanese strategy is to go in with Low prices and build Market share Quot said Stephen Reitman an automotive analyst with us Philips amp Drew in London. A they Are not reliant on the profit from the two new models for Success and Are willing to use profits from sales of other Toyota and Nissan models to cover their Long term strategy with new High end of the Market cars. They Are very Good cars. They will inevitably take sales from Bow and Daimler but the extent is difficult to  so far the results of the japanese strategy have been mixed Industry analysts and competitors say. A lexus is Selling very Well there is no question about that at All Quot Gerlinger of Bow said. A but infiniti is having big problems. They sold Only 1,000 units in february and 1,017 units in  lexus sold 4,171 cars in february and 4,135 in january while Bow sales totalled 4,113 in february and 4,919 cars in january. Mercedes sold 5,811 cars in the United states in february and 4,654 in january said Cai Ramhorst assistant to the president of Mercedes Benz of North America. A the japanese claim to be outselling us is a Clever marketing trick Quot Ramhorst said. Quot since they Only have two models they do outsell any individual Model of ours. But i think a fairer comparison is total  Mercedes expects to sell 75,000 cars in the United states this year slightly fewer than the 75,714 cars it sold in 1989, he added. In Europe Toyota is following a different strategy the lexus ls400, which sports a four Cam four liter v-8 engine generating 250-horsepower, made its european debut at the Geneva Auto show on March 5. It was a relatively subdued affair in marked contras o the highly publicized introduction in the United states. Infiniti originally scheduled to be introduced in eur0p this year has been delayed said a spokesman for Nis motor deutschland a Mph Quot it has not been decided whether it wiil be introduced in Europe in 1991. Ine spokesman would not say whether the postponement was related to slow sales in the . West German companies invented the anti blocking braking system and air bags that Are Standard Eatlo on lexus and infiniti. In fact West German Automa say they recognize a great Deal of their Handiwork in japanese models parts of which look exactly like a Mercedes or Bow. Page 14 a a a the stars and stripes m