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Claudia Hommel
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Cordell Koland
Car Writer
Weekly Reviews
  2007 Mercedes SL550 by Cordell Koland For the 2007 model year, Mercedes-Benz’ luxurious SL roadster gets a new, larger and more powerful 5.5-liter V-8 engine and a new name, the SL550, replacing the SL500. This new engine produces 382 horsepower— a power increase of more than 25 percent. Besides the new engine, changes are minimal. The 2007 SL sports a subtly changed front grille and clear-lens taillights and chrome-trimmed fog lights. The interior features re-designed door sills and new interior materials throughout, including a different leather grain and upholstery colors. On the company front, Mercedes-Benz sales are up by an amazing 13.3 percent for the calendar year through September, the best showing among mainstream luxury manufactures. Mercedes is number three out of the 18 to 20 brands that compose the luxury market. But if its pace continues, Mercedes just might knock off archrival BMW for the number two spot behind Lexus. This is torrid growth considering that annual sales represent big numbers and should hit around 240,000 units in the US, while the purchase price at the low end of the line is north of $30,000. One of the main reasons for this tremendous growth is Mercedes’ niche strategy that focuses on the few, rather than the many. This is exemplified by the SL-Class, where the cheapest model will still run you more than $100,000 with the usual options. Mercedes is the automotive superstar of the so-called the Long Tail Theory—the economic concept that niche products, with fewer unit sales, but higher margins, can create market advantage. Long Tail Theory, popularized by Wired Magazine editor, Chris Anderson's analysis of Amazon.com, has become a recent feature of high-tech business jargon. Long Tail is the opposite of mainstream. When applied to Internet companies such as Amazon, the theory states that the biggest returns won't necessarily come from the hit book or CD that everyone under the sun is selling, but the rare and hard to find items that no one else carries. You will sell fewer of these niche items, but your profit margins make these the gems of your business. Mercedes is hands down the best mainstream auto company at exploiting this the Long Tail economic model, supporting a dozen unique vehicle classes, such as the SL-Class, S-Class, C-Class, E-Class, G-Class and on and on, while most of its competitors offer no more than four or five basic vehicle families. Most of the Mercedes’ Classes have several models, which fundamentally differ by the size of the engine and the level of luxury and/or high-performance content. For example, the SL-Class is composed of four models, the SL550, our test car, the high-performance SL55 AMG, the SL600 with its massive 12-cylinder engine, and its ultra high-performance variant, the 604-horsepower SL65 AMG. Mercedes will only sell 10,000 to 12,000 cars annually within the entire SL class, and likely only several hundred of ultra-niche SL65 AMG will ever race off a dealer’s lot. Mercedes makes such low sales volumes work by commissioning relatively few, but large dealers, and by the fact that it maintains substantial profit margin on its vehicles. With the high cost of admission, the SL-Class and many other Mercedes offerings are out of reach of most consumers, but on aggregate the high-margin, Long Tail vehicle classes contribute more than a quarter of company sales volume. What one gets in the SL550 is exclusivity and an elegant driver’s car with excellent comfort. The SL’s styling is dynamic and aggressive. The design is wedge-shaped and incorporates a radically sloping windshield for improved aerodynamics. The SL is a streamlined sports car with a form that definitely states its intentions. The SL’s high margins and low volume exploit Long Tail economics and allow it to be a test market for the latest technology before it goes into mass production. The new engine mated to a just-developed seven-speed automatic transmission provides seamless power—and lots of it. Mercedes’ Active Body Control prevents the car from rolling when cornering or from dipping under hard braking. The body control technology includes 13 sensors that monitor chassis movement and vehicle level, and then supply split-second information to the computerized system. The system actively responds to the real-time input by automatically adjusting the suspension to compensate for external forces through active servomotors that counteract body motion. All of these complex activities happen without the slightest driver involvement—or even awareness of what is going on. And of course, you can also expect good old-fashioned luxury. The SL’s seats are comfortable and the cabin well designed. The seats have an infinite number of adjustments and will even accommodate a person well over six feet tall. The controls, however, are not best in class. The center console demands too much driver attention and the navigation system are mounted too low on the center console for easy use. Vehicle:
Mercedes-Benz SL550
Price as tested: $103,755 Engine: Type: Horsepower: 382 @ 6,000 rpm Torque: 391 lbs.-ft. @ 2,800 rpm Fuel economy, automatic transmission City – 14 mpg Highway – 22 mpg Curb Weight: 4,220 lbs. Cordell Koland is an automotive journalist based in California's central coast. He can be reached at cordellkoland@oakparkjournal.com Editorial Note: This review contains a discussion of the Long Tail Theory in relation to the success of Mercedes-Benz in the market. I think this theory is fairly well known in the business community, in fact my 26-year-old son—a business development specialist—and I talk about it a great deal. Anyway, the theory is explained in depth on Wikpedia http://en.wikipedia.org/wiki/Long_tail |
