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High End Luxury Cars

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Comments

  • merc1merc1 Posts: 6,081
    Great post. Value, relative to a Mercedes has always been a huge part of why people who've shopped both buy a Lexus. Not the only reason as OAC points out but it is a factor for many. You see it in posts a lot here and on other boards.

    The meaning of "value" I think takes on a different meaning here compared to a Camry/Accord/Altima buyer who is likely looking the just the payments and to a lesser degree at the actual cars as to what they have or don't have in the way of styling, features, performance etc. etc. Just what I think.

    M
  • sysweisyswei Posts: 1,804
    Now is the time, NOW! If lexus can shatter the cut-rate value myth, then it will truly gain a quantum leap to the next string of evolutionary spirit.

    What do you mean by this? Do you mean that you think Lexus should price its products on par with MB?
  • ljflxljflx Posts: 4,661
    "Now is the time, NOW! If lexus can shatter the cut-rate value myth, then it will truly gain a quantum leap to the next string of evolutionary spirit."

    I think Lexus in more interested in profitability and has zero interest in steve's pricing obsession.
  • designmandesignman Posts: 2,129
    Yep, that's what he means. Gotta raise the prices to appeal to Europeans and those of us who savor the philosophical, cultural and intellectual essence of firing up stogies with 100-dollar bills.

    Hey, remember the movie Back To School when Rodney Dangerfield was making a hero sandwich, pulling the inside dough out of the bread loaf to fit extra cold cuts, then saying "I learned this in Europe"? Maybe that's kind of in line with what Steve is talking about.

    It's the genius factor. Perhaps we all need to go back to school.

    ;-)
  • blkhemiblkhemi Posts: 1,717
    "I just wish Audi would promote Quattro (A8 in the case) more in certain MB strongholds in the North and Northeast."

    Agreed. But from what I hear from Ingolstadt, the '09 replacement for the current A8 will correct all of the wrong-doings here in the States. It's said to come to market with a 4.2 FSI V-8 with about 470-hp/8-speed tranny as the "base" engine and a "clean" V-10 TDI within the first year it comes to the States. No more of that first year (remember the '04 commercials) marketing/commercial ads then just turning their backs on the FLAGSHIP sedan.

    So it all remains to be seen. I'm not giving up on my favorite German brand!!
  • houdini1houdini1 Kansas City areaPosts: 5,780
    Yes indeed. Raising Lexus prices would certainly help me out and probably prompt me to rush out to buy a couple of LS's. I certainly can't be expected to spend my money fast enough under the current state of affairs.

    I've been worried sick because all my friends and allies in Europe are having to endure the hardship of the artificially low prices that have been foisted upon them by Lexus. I mean really, who would be interested in value when you could have added "cachet".

    2013 LX 570 2010 LS 460

  • ljflxljflx Posts: 4,661
    Yes indeed also. I just can't wait to write a check out to Lexus for an additional $20K of pure incremental profit to them and then tell people look at the even more expensive car I drive - it's a real HELM now to someone on the Edmunds board. It just goes to show you how silly seeking status is.
  • stevekilburnstevekilburn Posts: 359
    S450 and S550 are from mercedes, sure those who want less power and save a few dollars will go for S450, but thats not my point.

    We are talking about competition and price premium here. Once you gain market presence and your brand is well known and respected, the next step is to bring the "prices in line" with your competitor to gain maximum reward for your effort.

    "Value" pricing by lexus is a great way to sell vehicles, but independence from "value pricing" and commanding the same price premium as your competitors is better in my opinion.

    This is not just marketing talk or resale value argument, the argument here is

    "commanding the price premium for a new HELM".

    By implying that S550 is over priced and that being the reason why its resale price is not as good as that compared to LS does not make sense. There are other factors involved such as quality, design, recent perceptions, reliability, technology (well sorted technology) etc etc.

    The reason why I am obsessed with price for LS is because I am in business too and if I can lead my brand away from "value within HELM" image to a "premium HELM" image I would make all out effort to do it.

    I believe the LS 460 has the goods to make that transition and its up to lexus to see if they are wise enough to seize the moment.

    Also the comment that why change a successful formula, and keep it simple is not a good idea. The "value" formula is good today but what about tomorrow.

    We must consider evolution of brands. The LS was selling so well, they need not put more performance in it, but why did lexus introduced a 380 hp V8 and emphasized "unique connection to road" and driving dynamics in the upcoming LS?

    The reason is simple, its time to evolve and add more qualities to the vehicle and adding premium pricing is one of those things that makes up the image of the brand too.

    Also, I am not proposing LS should charge as much as S550, but it should at least be head-to-head with 7-series.

    Which means if 745i = 72,000 then LS 460 = 72,000 too
    and 745Li = 76,000 then LS 460L = 76,000 too

    still thousands of dollars cheaper than S550.

    This kind of pricing will likely reduce the "volumes" but the extra price and profits will more than make up for that.

    Thats my honest opinion, now its your turn.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    steve - are you suggesting that Lexus is not bringing in enough profit for Toyota? Are you also suggesting that the vehicle's profit margins are skinny? If anything, they are very healthy, my friend, and I wish I owned a Lexus dealership or two myself!!!

    There is plenty of profit at the current price strategy. Fact is, there is generally a better profit margin on a lower priced Lexus than on a higher priced Mercedes!

    You've made your point, but you keep on grinding. READ all the counterpoints and consider the merit in them. I have to admire you for your high-spirited nature, but c'mon already, let's move past this campaign of yours to raise Lexus prices.

    If you do not believe me, ask ljflx. You have already complimented his business knowledge. Ask him if a Lexus dealership is in need of higher prices or margins. I'll bet he'll tell you that they are doing just fine with the current winning strategy.

    TagMan
  • stevekilburnstevekilburn Posts: 359
    well said oac.

    The LS 460 now needs to evolve into a true premium HELM and price should be a head to head with 7 and A8.

    And it will still have a 14,000$ price advantage over S550.

    It will still be "GREAT" value since the quality and reliability and resale value will be higher than 7 and A8.

    The driving dynamics will greatly improve too. May be (just a guess) as good as 7.
  • ljflxljflx Posts: 4,661
    There are so many things wrong with your argument that I don't even know where to begin. But let's stop with the obsession with the S550. You act like that is the only car on earth that the LS should care about. The LS truly competes with the S450 whenever it's released, and previously the S430. The LS600HL is the car that will compete with the S550. Steve - you need to get real. They have a major build cost advantage over Mercedes and you want them to act as if it doesn't exist. In the next 1,000 years of business - pick any business you want - that is NOT going to happen.
  • stevekilburnstevekilburn Posts: 359
    No I am not suggesting a lack of profit. Lexus makes good, indeed great profits.

    My argument is not profits, resale value, etc etc.

    Please read this and repeat a few times:

    "Commanding, I repeat; commanding the same price premium as A8 and 7"

    and evolving out of "value HELM" phenomenon, while still preserving and augmenting profits and revenues.


    Thats what (in bold letters) I want to say, now the ball is in your court, its your turn.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    steve - if value is an integral part of Lexus success, what is wrong with it?

    TagMan
  • stevekilburnstevekilburn Posts: 359
    Ljflx (what is your real name btw? :) )

    I agree with your build cost advantage, and no I am not saying they should not have that, or that they should not use that as an asset.

    I repeat my earlier post on build cost and profits.

    S: cost price: 150 $ , selling price: 200$
    7: cost price: 140$, selling price: 190$
    LS: cost price: 110$, selling price: 170$

    You see, Lexus has a build cost advantage of 40$ over S and 30$ over 7-series. It also makes 10$ more than Benz and BMW. We "BOTH are in agreement here"

    But thats "NOT the issue". The idea here is

    LS 460: cost price: 110$, selling price SHOULD BE: 190$

    similar to 745. WHY?

    Because LS has superior quality and reliability, better fit and finish, better craftsmanship, potent V8, greatly (I hope) driving dynamics due to completely revised multi-link front and rear suspension, cutting edge technology, as advanced, perhaps more than benz and bmw, and therefore "NOW IS THE MOMENT" it should move away from "value HELM" to a "premium HELM".

    That would bring in extra 20$ profit, and therefore improved bottom line, greater ability to invest in R&D to improve fuel economy and reduce pollution, more power and performance and still better products.

    Let me give another Example:

    Star Foot-ball player A: experienced, famous and in his prime commands 50 million$ in his contract over 5 years.

    Star Foot-Ball player B: a new kid on the block, but VERY talented, CAN command 45 million$ for his contract over 5 years, but lo and behold he says, "I WANT ONLY 30 million$, because I am offering value!!!!!"

    How funny? Now its your turn.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    steve - you said you are in business, too.

    In my business, we have a standard operating policy to ALWAYS give the client MORE than they expect. We are not cut-rate, but we do provide value, and we have one of the highest satisfaction ratings in our industry.

    Based upon all your arguments, you are saying that Lexus could "command" more money in your opinion. YES, exactly the point! You perceive that value, and it is a good thing not a bad thing. Without that belief, you would not be so passionate about the value.

    Value is good . . . it means that the buyer is getting the most, or certainly more for their money from their perspective.

    TagMan
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Star Foot-Ball player B: a new kid on the block, but VERY talented, CAN command 45 million$ for his contract over 5 years, but lo and behold he says, "I WANT ONLY 30 million$, because I am offering value!!!!!"

    Absurd. What's his build cost? This is not an appropriate analogy.

    Steve, what is wrong with value? It's your turn!

    TagMan
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    You are way out on a limb here.

    Your argument is still a campaign to get the most money possible, as YOU see it. That is no longer value.

    While I see your point, I am a full 180 degrees from agreeing with it. Sorry, you won't change my mind, and I won't buy a Bose stereo either, dude. ;)

    TagMan
  • stevekilburnstevekilburn Posts: 359
    Build cost is the years of rigorous training.

    Player A the blockbuster Guy has trained for 8 years under famed coach X

    and player B, new talent has trained for 6 years (2 years less) under coach Y who is smarter than coach X.

    So player B's build cost is lower and both A and B CAN go head to head according to public assessments and pundits.
  • stevekilburnstevekilburn Posts: 359
    Your comment "Your argument is still a campaign to get the most money possible, as YOU see it. That is no longer value"

    would have been correct if I had said

    "LS 460 should be priced 82K and 460L should be 86K to match S550"

    But thats not what I said. I said "LS 460 should be head-to-head with A8 and 7" so actually there is still "TREMENDOUS" value, more than $10,000 compared to Benz. Thats more than 13% discount!!!!!

    And lets not forget A8 was introduced in 1994 so its brand heritage is even more sketchy than LS.

    we both are on zero degree and perfectly aligned, and regarding 36 hours, LOL!
  • stevekilburnstevekilburn Posts: 359
    I think LS 600hL will compete with A8L W12 and 760Li, not S550.
    V8 hybrid with 430 hp to compete with 438hp 760Li and 450 hp W12, not 380 hp S550.

    But it will be priced in the S550 ballpark. So it will be "LOADED WITH VALUE".
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