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High End Luxury Cars

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Comments

  • stevekilburnstevekilburn Posts: 359
    I think you are dead wrong here. Jag just introduced Xk and the price jumped from 69K to 75K, is that incremental?
    20-30% jump in economy? Do you get your numbers from crack-pot?

    If Audi's gen A V8 engine had 20 combined, after 5-6 years it would become 24-26, and then in the next generation it would be 29-32? and so on!! How funny?
  • stevekilburnstevekilburn Posts: 359
    My My syswei, what an example?

    Next Gen LS should be priced head-to-head with 7 and A8, because

    1. It has cutting edge technology, way ahead of 7 and A8, just go read the long list of gadgetry, its stunning! More safety technology than even S550, even pedestrian safety!
    2. 5 yr old LS is more reliable than NEW 7 and A8
    3. More power, 380 hp of raw passion
    3A. Best in class claimed fuel economy.
    4. Unsurpassed craftsmanship
    5. Original design (despite the hollow cries of 7-series fanatics)
    6. Lexus build quality
    7. Lexus deserves just as much premium pricing as 7 and A8.
  • blkhemiblkhemi Posts: 1,717
    I'm dead wrong???? :mad:

    I've been waiting for the moment to correct you on many issues that you think that you're right on, which are far and few between.

    I'm not here to discuss speculation, unlike you and a few others, just the raw facts. All of the data that I got came straight from Audi's Euro website. No lies or gimmicks.

    Yes the XK that was recently introduced did increase substantially, but this is far from normal for Jag, with the new for '04 XJ8 increasing only 800 bucks vs. '03.

    Furthermore, I think that this thread would be much better place of communication without people basically calling others untruthful.

    And by all means, STICK TO THE SUBJECT as you'd have it.
  • sysweisyswei Posts: 1,804
    Next Gen LS should be priced head-to-head with 7 and A8

    Should or could? Imho, it could be priced at that level and still perhaps outsell the 7 (though offseting the factors you mentioned the 7 will still have the advantage of better...to some...driving dynamics, and despite the survey someone posted could in some people's eyes have stronger prestige/cachet).

    That still doesn't prove that Lexus from a corporate standpoint should price it there. Why do you assume that you know better than Lexus what the profit-maximizing price strategy really is? Have you conducted your own surveys or focus groups? These companies do have focus group studies....I was even invited to what was described to me as a "luxury sedan" focus group, but unfortunately had a business conflict so didn't attend.

    Maybe it is the Germans that are over-priced, not Lexus that is underpriced. Have you thought of that possibility? That if the Germans had lower production costs than they do in the real world, their profit-maximizing strategy might be to lower their selling prices, not maintain them?

    Do you understand the concept of price elasticity of demand? And I'll ask again, do you have a better idea than Lexus of what it is for the LS? And of what the incremental margins are on the LS?
  • blkhemiblkhemi Posts: 1,717
    "5yr. old LS is more reliable than NEW 7 and A8."

    The old Jack Daniels bottle most be pretty low as this is one of the most far-fetched comments made here. Unbelieveable.

    Anything to validate such a blasphemous statement? Probably not.

    A LS430 with 40-50k miles on the clock couldn't be as reliable as a 7, A8, or an S, no matter who's driving it. This la-la land dreaming has to come to a complete stop at one point, NOW preferably. And furthermore, the whole point of people buying the LS is that they know that one can be had relatively cheaper than the competitors while offering the same options, if not more. Increasing pricing because " it looks good" or to have the "me-too" syndrome is just flat-out ridiculous. If Lexus was to follow this plan, they wouldn't be having the sales increases that they've been enjoying for quite sometime. Makes absolutely no business sense whatsoever. And thankfully that is why Toyota is extremely careful about who they place in decision-making positions.

    Here's a suggestion: Let's just stick "discussing" cars and not turning into whose right and whose wrong.
  • ljflxljflx Posts: 4,661
    Steve,

    Enlighten us on your thinking on this whole issue. Why exactly do you want to see Lexus raise prices to the levels you want. Is this psychologically tied to your purchase decision? Do you want to deplete your bank account faster? Do you think they are leaving money on the table or are passing up low hanging fruit? You've gone thru this never ending tirade that makes no sense to any of us and yet you've never explained any rationale.

    From a business view I'll point out some more of your problems. Lexus has a build cost advantage over Audi and BMW to. So why move your price point to their level when you can undercut them and maintain a sound business value startegy that 99.99% of the business world would kill to have over their competition. Next - selling less cars at a higher premium is bad business. Why? - several reasons. First of all you'd have to retool your idle capacity to build something else. So there's a new cost to cover. Second - you'd have to market that something else - so now we have another cost on our hands. Third - what if there is nothing else - now we have a Balance Sheet writedown on our hands and that can be large and make investors think you don't know what the heck you're doing. If item three is true than we move to layoffs and now you have a whole new set of issues - both cost wise (severance) and politically given Japan is as bad as Europe with cutting personnel costs. You see - this is why you don't stray from a business strategy. If delivering equal or more to your customers for less is a strategy than it will be the same strategy 10-20 years from now. It is what it is - and what it is has been very successful - so accept it and move on. BTW I can list plenty of additional reasons but it's like beating a dead horse at this point

    But I go back to the why issue. Why is it so important to you personally that the LS be pushed to your desired pricepoint when there is no sound reason to undertake the risk factors to do so.
  • sysweisyswei Posts: 1,804
    "5yr. old LS is more reliable than NEW 7 and A8."

    The old Jack Daniels bottle most be pretty low as this is one of the most far-fetched comments made here. Unbelieveable.

    Anything to validate such a blasphemous statement? Probably not.

    A LS430 with 40-50k miles on the clock couldn't be as reliable as a 7, A8, or an S, no matter who's driving it. This la-la land dreaming has to come to a complete stop at one point, NOW


    Your language was strong enough that I feel like jumping in on Steve's behalf. Check CR for the reliability ratings of the newest 7 or A8 they cover, versus a 5 year older LS. You might be surprised by the results.
  • stevekilburnstevekilburn Posts: 359
    "tirade" means a long angry or violent speech! I cannot see where I was angry or violent. All along I have argued with love and civility. Never using any invective! Rarely!

    You keep insisting on build cost advantage! I always agreed with you on build-cost advantage so why bring it up again?

    Selling less cars at higher premium: You are automatically assuming that sales will fall to such a level that there will be idle capacity. This is just speculation.

    Moreover, these days with flexible manufacturing, more models can be built on same line. besides Lexus/Toyota have mechanisms in place to increase or decrease capacity in tune with demand. Even BMW does the same. This is called flexible manufacturing, FYI.

    Second: Why would you market that as something else, every one knows high quality and craftsmanship of LS, you are transforming it from "Value HELM" to "Premium HELM" where 7-series is.

    Third: It makes no sense at all. With all respect!

    I am not asking Lexus to stray, but I want them to evolve. Moreover, if your business strategy remains same for next 10-20 years you risk being left behind and ultimately expunged due to evolutionary surge.

    I have no personal reason to push Lexus anywhere. Lexus can sell LS for 20K for all I care. I just feel that their business strategy should evolve in way so that they can command the same prices as 7 and A8. Why does Lexus deserve any less? And why is it important to you that Lexus should continue to undercut competitors. Why should it not make more profits by bringing its prices in line with 7 and A8?

    Brain-storming this might give us some precious clues
  • stevekilburnstevekilburn Posts: 359
    Syswei

    I have great respect for your comments but sometimes you confound me with your stubborn ideas. Why dont you follow your own instincts and not get influenced by ideas.
    I never said I am the god of everything and I have better idea than Lexus on LS and that Lexus should obey my command and pay homage to me.

    But at the same time I firmly believe that LS should move from "Value HELM" to "premium HELM" in line with 7-series and A8. This is because this is the natural outcome of evolution in LS's life. It must not be stunted or besmirched. In a capitalistic society, LS should strive for increased profits just like Porsche. Look at porsche, it is also a HELM!

    Have they not priced their products at a solid price premium. Should Lexus go the same way, it will capitalize even better on its build-cost advantage.

    Besides, it will STILL BE A GREAT VALUE COMPARED TO S550. 10,000$ advantage, can't you see what I am saying?
  • stevekilburnstevekilburn Posts: 359
    I just wanted to articulate my perspective and comment on yours. I respect your comments and yes we should discuss HELMs only!
  • killerbunnykillerbunny Posts: 141
    The old Jack Daniels bottle most be pretty low as this is one of the most far-fetched comments made here. Unbelieveable.

    Anything to validate such a blasphemous statement? Probably not.

    A LS430 with 40-50k miles on the clock couldn't be as reliable as a 7, A8, or an S, no matter who's driving it.


    A twenty year old Porsche 911 can still beat the crap out of a Corolla in terms of performance, and yeah, a five year old LS can beat the crap out a new A8 in terms of reliabilty. An A8 will have more problems in the first year than the entire life of an LS.
  • sysweisyswei Posts: 1,804
    I firmly believe that LS should move from "Value HELM" to "premium HELM" in line with 7-series and A8. This is because this is the natural outcome of evolution in LS's life.

    I agree Lexus can move up the price ladder...they have been doing so for the last 17 years...but I don't expect them to necessarily move to parity with the 7 in 4-5 months. Though it could happen that soon, it could alternatively take years more. And I'm not about to second-guess Lexus management if they decide not to do it in 4-5 months. There can be sound business reasons for pricing lower than the competition, even for luxury goods.
  • blkhemiblkhemi Posts: 1,717
    My language could be considered honest in light of some of the more flagrant language that's been used here.

    My point still remains: In no way will a 5yr old car be as reliable as one fresh off the assembly line. I don't care whose side you're on or what report you're reading, it ain't gone happen.

    BTW, it's very interesting to note that the S-Class was omitted in this whole debacle. Why would the "most unreliable" (what most of you would have it on this thread) car be omitted from the discussion? Very interesting.
  • ljflxljflx Posts: 4,661
    The fact is it has been - and for a few years running now. If you don't want to believe it that's your choice. But it's hardly false and it's why a $62K LS commands greater money after 3 years than it's German competitors despite being priced 12-16K cheaper when new. Things are what they are.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    At first I thought that the forum had suffered a horrible breakdown in communication.

    But after careful consideration, steve, I now understand you.

    Dear Lexus,

    My name is Steve Kilburn. I know that you are not charging enough money for your LS line of vehicles. I want to pay more and I want everyone else that buys one to pay more. It bothers me that they might be considered "VALUE"-priced vehicles in the HELM category, because I want them to be considered "PREMIUM"-priced vehicles in that category. I insist that you price them as they SHOULD be, in line with the 7 series BMW and the A8 Audi. You must do this NOW while the opportunity is there. Do not STUNT the LS. Go for BIGGER PROFITS and do it NOW, otherwise you are selling your vehicles CUT-RATE.

    If you believe in CAPITALISM you will raise your prices to the level I have commanded you and you will do it NOW. Make sure you do not undercut your competition. Any changes that these price increases might make to the demand for your vehicles is of no concern because you can always use your FLEXIBLE manufacturing techniques. And remember to always consult first with BMW and Audi so that you set your prices in line with theirs because I have personally selected them to be the barometer for your price structure from now on. That's ALL I'm saying. That's all I've been saying all along.

    Oh . . . by the way . . . you really SHOULD stop building those HIPPO Lexus SUV's that are sucking all the earth's resources away and are nothing but rolling TERRORISTS. Maybe their drivers should live in a land fill for a week.

    My credentials are impressive as I work for a drug company and NEVER take any of the products myself, but I'd swear that there is someone smoking crack on the forum, and I think that it may be the same person that accused me of stealing my own stuff.

    Also, I want you to find out who the CLEVER person was that broke into my house and implanted that transmitter in my brain that makes me think and say things that I can not control.

    Sincerely your best consultant you ever had but never asked for,

    Steve Kilburn

    You see, steve, I told you I understand you now.

    :D

    TagMan
  • lexusguylexusguy Posts: 6,419
    "My point still remains: In no way will a 5yr old car be as reliable as one fresh off the assembly line. I don't care whose side you're on or what report you're reading, it ain't gone happen."

    Actually, a 1998 Lexus LS400 is more reliable than a brand new A8, 7 or last gen S class. (Perhaps the S was not mentioned because theres no real info yet on a car a few months old? I dont think there's anything "interesting" behind that.) There are plenty of things the European HELMS can beat the LS on, but a "'ol reliable" fight is something they simply cannot win. Lexus owns that one.
  • manegimanegi Posts: 110
    Dear Mr Kilburn

    Thank you very much for your kind advice. However, as you may have noted, our parent company Toyta recorded net profits of 3.4 Bn USD in the latest quarter (up 34% year on year), their balance sheet has 30 Bn USD of free cash (net of liabilities) - even as their investment in new capacity and technology is highest ever (actually for the full year likely to be double of 2005, at 12 Bn USD - They are even building their own production line for semiconductor chips to be used in next generation of Toyota and Lexus cars) - And the share price is up 74% in the last 12 months.

    In such circumstances, we believe that increasing prices is not a high priority for the company - In fact, we would like to bring our hybrid technology costs down to a level where we can offer it without any mark up, and boost performance 20% for all our models. That would liven up discussions on this forum, don't you think so?

    Regards

    Lexus
  • lexusguylexusguy Posts: 6,419
    P.S.

    A Lexus dealer would probably be willing to sell you a LS460 at the price you desire, if you state that you are determined to pay the price of a new 750 or A8, and not a penny less!
  • sysweisyswei Posts: 1,804
    Then the dealer could put a sign on the car reading "this car cost as much as a 750Li" which would make the owner feel that he was now driving a more prestigious car.
  • hpowdershpowders Posts: 4,269
    Lexus has a proven business model. Why tamper with success?

    If Lexus raised the price on the LS comparable to the S Class, don't you think Lexus would lose quite a significant amount of sales to Mercedes?

    If I was spending this kind of cash and MB and Lexus were comparably priced, I would take the MB every time. I'm sure I'm far from alone in my thinking.

    There is a point at which brand cache takes over.
    Perhaps in 10 years or so, but surely not now.
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