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Should LEXUS Price its Vehicles Head-to-Head with Germans

2

Comments

  • cxccxc Posts: 122
    There is something more than price. One has to see this world wide. In Japan, China, Korea, and Taiwan, a BMW is a BMW and a MB is a MB, nothing can replace them. In Europe, it is very similar. In those parts of the world, Lexus goes nowhere. We, AMERICANS, are far more open minded. We are willing to try anything that looks like OK. This is why Lexus is successful here.
  • ideleidele Posts: 200
    3 comments:
    1. BMW's and Mercedes's sold in Japan are built to Japanese standards and carry a considerably higher price tag.
    2. Nobody matches the Toyota production system and its measurably lower costs. Lexus can be more profitable even at lower prices.
    3. In S.Korea Lexus was far behind BMW but in 2005 they caught up and, I haven't seen the final figures, may well have ended up ahead.
  • mirthmirth Posts: 1,212
    The IS design is boring?

    I guess you like the seriously flawed, but not boring, 7 and S-Class designs?


    Like I said, it's only my opinion, but yeah, I find the IS, ES, LS, etc. etc. boring. The S-Class is also a bit boring. The 7 isn't boring - it's just ugly. So if I was looking for a car in that neighborhood I'd look at Acura, Cadillac, BMW (3-series only), Infiniti, Jaguar (XK only), or Audi.

    I'm happy for you that you love Lexus - you are not alone.
  • lemkolemko Posts: 15,144
    ...does Lexus sell in Hong Kong? It seems Rolls-Royces and Mercedes are common there.
  • sigt1sigt1 Posts: 66
    why price them accordingly? destroy the competition. germans must pay for their overpricing of their faulty carp.

    go toyota
  • john500john500 Posts: 409
    The opinion of essentially all drivers who write columns for automotive magazines is that Lexus is second to BMW with regard to driving experience. Thus, Lexus should be priced competitively low. Lexus can not get away with pricing higher with me. In fact, they are already overpriced. There is no "lower" grade of BMW called BMWota or such.
  • drfilldrfill Posts: 2,484
    Lexus can make more cars, without hurting overall quality, doesn't mean that's the right thing to do.

    And since sales are up 10% a year, pretty consistently, a price increase is in order, on certain models, to increase the marques exclusivity.

    I don't want a market flooded with Lexus vehicles! It's not good long-term for the brands cache.

    The RX and LS, in particular, need significant price increases as they are redesigned. With the new V6, I would've increased the cost of the car $1000.

    I think Toyota wants share, Lexus wants brand awareness and prestige. These are two very different goals.

    DrFill
  • The opinion of essentially all drivers who write columns for automotive magazines is that Lexus is second to BMW with regard to driving experience. Thus, Lexus should be priced competitively low.

    The obvious fallacy of that argument is that not everyone equates value with "driving experience".

    There is no "lower" grade of BMW called BMWota or such.
    Ireelevant, incompetent and immaterial.
  • This is what happens when you rely on magazine reviews. BMW’s are sportier then any other car in their class and that’s on big reason why they always win. In the real world the Lexus is usually a better car to live with day to day.

    Less Expensive to buy
    Less Expensive to own
    Quiet
    Ride nice
    Nicer interior
    More reliable
    Better technology

    Maybe this is why Lexus is the #1 luxury maker in the U.S. after 15 years in the market.

    This reminds me of people comparing a Harley to a Honda. The Honda usually beats it in 19 out of 20 categories but Harley makes you feel like you’re something special and for some people that means everything. That and the obnoxious sound.
  • socala4socala4 Posts: 2,427
    Lexus can make more cars, without hurting overall quality, doesn't mean that's the right thing to do.

    And since sales are up 10% a year, pretty consistently, a price increase is in order, on certain models, to increase the marques exclusivity.


    One objective of many larger companies is to dominate the percentage of market share. When Starbucks opens a new cafe, its mission is not just to make sure that it sells coffee to you, but that you don't buy coffee from somebody else.

    Lexus is in the same spot -- its goal should be to dominate BMW, Mercedes, Infiniti, Acura, Audi, etc., not just to get a piece of the market and be happy to cede the rest to others. Lexus wants to be the definitive luxury car for those crave a combination of polish and reliability, and to make a less reliable choice a less desirable one, and they're doing a fine job of it. The brand's cachet value may not be as high as MB's or BMW's, but it is high enough to eat at their sales and to set the path for greater future growth.
  • I think the whole "luxury sports sedan" thing is a fallacy. You either have a luxury sedan or a sports car. With a “luxury sports sedan” you either get a fast rough riding luxury car which isn’t my idea of luxury or a nice riding but fast luxury car that isn’t a sports car. If you want a sports car, buy a sports car. I like the cars but don’t criticize an LS400 for not being sporty. This is like complaining that your 300lb lineman can’t run the cones as well as a running back. You either have a strong 300 lb lineman(Lexus) or a 200lb running back (Z4). A lot of the BMW’s are like a 250 guy who is not quite fast enough to be a running back but not strong enough to be a lineman.
  • rayngrayng Posts: 70
    Lexus is not overpriced IMO. Lexus U.S. prices their cars competitively and discounts heavily. If you overpay, then you don't know how to deal and got ripped off.

    Lexus is a great value. I got touch screen navi, buttery soft leather on all seats (not just front inserts), great ergonomics, excellent service, and a huge discount on my ES. I dare you to find the same fit and finish, quality components, and state-of-the-art options on the 3 or c-class.

    As a former owner of a 3series and a current owner of an ES, I can say that Toyota should raise their prices. My 325i sp/prm, xen, cd was fun to drive but a terrible value. My lexus is a vastly superior car bolt for bolt without factoring in driving dynamics. Since I spend a lot of time stuck on the 405, and don't go to the track, I found the ES vastly more comfortable and enjoyable than the 3.

    I liked the es so much I got the wife an rx.

    Car magazines and those enthusiasts who echo their hyperbole don't seem to be the average luxury car buyer. If they want to drive the 7, s, or ls on the track, go ahead. Neither I nor 99% of these flagship owners will care much about slalom, quarter-mile, or willow springs lap times.
  • I must disagree. Many early sports cars were little more than stripped down luxury car (Bugatti, Duesenburg, Bentley, etc...), it wasn't until much later they became go-carts. Luxury should include power and handling. If I wanted a sofa on wheels I'd buy a Buick.
  • rayngrayng Posts: 70
    Great post! Lexus and Mercedes make sporty luxury sedans. The sports sedan market are geared for those who can't afford a second sports car. Those in the know and are real sports car enthusiasts will not try to get a car that rides too roughly to be a luxury car but not be sporty enough to race.

    I bet the LS outsold S8s, S65s, s55s, and xjks combined.
  • rayngrayng Posts: 70
    LS must move up in pricing to demonstrate prestige, panache, and exclusivity. The LS high resales have bouyed the prices of new cars--which is a great way to demonstrate long-term quality, reliability, and value.

    I think the LS demonstrates to the marketplace that Lexus has arrived. Lexus is a legitimate, credible, and formidable brand that can build one of the world's best luxury sedans.

    Mercedes by the way is moving down on pricing and hurting their own customers by dropping resale values on their used cars. With discounts as much as $17k on the current S, the '07 S residuals will be low.
  • rayngrayng Posts: 70
    Toyota does not need to build sports cars even though they are heavily involved in racing. From F1 to Nascar, I'm sure that they corporate brass will be tempted to stuff a highly tuned v8 into a camry. What will that look like? I don't know for sure, but perhaps a camry ss would look like this.
  • john500john500 Posts: 409
    Very relevant. If I want 95 % of the driving experience of a Lexus, I can buy a Toyota Avalon at a much reduced price. If I want 95 % of the driving experience of a BMW, I can buy a Lexus, at not such a reduced price.
  • socala4socala4 Posts: 2,427
    Toyota does not need to build sports cars even though they are heavily involved in racing.

    I would agree that for the moment that this lack of a performance car hasn't really hurt them much, but I would speculate as I did above that the company will need a good image car or two as the quality gap shrinks and no longer helps to differentiate Toyota from many other makers. (Despite talk of a declining gap, the gap is still large enough to move enough buyers into the Toyota camp.)
  • drfilldrfill Posts: 2,484
    Lexus is not overpriced IMO. Lexus U.S. prices their cars competitively and discounts heavily. If you overpay, then you don't know how to deal and got ripped off.

    I wouldn't characterize Lexus this way, It is surely misleading.

    I don't have transaction prices, or figures on dealer incentives per brand handy, but Scion, Mini, and Porsche are the least discounted/incentivized cars on the market.

    Caddy and Lincoln are the MOST. They're at like $4500 per vehicle. THAT"S HEAVILY discounted!

    I would PRESUME Lexus is closer to Porsche than Lincoln on discounting the product.

    DrFill
  • rayngrayng Posts: 70
    For pricing info, check out carsdirect.

    On an '06 rx330, msrp: 37065 but you can but one at 32735, a $4500+ discount.

    On an '06 ls430, msrp: 58819 but 51514 on carsdirect, a savings of $7k+

    There are other examples of big discounts on Lexus cars including the high demand IS though in the range of maybe a thousand and not thousands.

    If you were to print out a carsdirect price and hand it to any Lexus sales manager, you should be able to get a much better price and save at least $500 more.

    I don't work for Lexus or carsdirect. My point is that lexus and other brands including MB and BMW, sell expensive cars with high gross margins (10%+) which they can turnaround and discount when they need to.

    Lexus is not different than Caddy and Lincoln in those respects. All car companies will rather make a little money than no money at all.
  • ron_mron_m Posts: 188
    I would agree that for the moment that this lack of a performance car hasn't really hurt them much, but I would speculate as I did above that the company will need a good image car or two as the quality gap shrinks and no longer helps to differentiate Toyota from many other makers. (Despite talk of a declining gap, the gap is still large enough to move enough buyers into the Toyota camp.)

    You're exactly right socala4. I agree with everything you stated above. Speaking of a "performance car" from Toyota, have you checked out some of the prices people are getting for used turbo Supras these days???!!! Depending on the condition of the car, they sometimes bring a small fortune.

    Ron M.
  • I think in 3-4 years when Camry has sufficient NASCAR exposure, they will try to fit in a V8 with probably 300-330 HP to compete with Chevy.

    Thats just my guess.
  • merc1merc1 Posts: 6,081
    Do you really think a guys who buys a S8 or S65 can't afford a "second sports car" if he wanted one? That doesn't make sense at those prices. People like that almost always have "several" cars.

    The discounts on the outgoing S-Class are expected with a new model now on sale.

    M
  • These are just adverts. I dont think lexus discounts the vehicles so heavily. The average discounts are less than 500$. You should check out edmunds itself.
  • merc1merc1 Posts: 6,081
    That will never happen. Toyota would never engineer a V8 for a Camry. If anything Toyota will either give Lexus that sports car that made the auto show rounds last year, or they'll revive the Supra to be a 350Z killer.

    M
  • This carsdirect thing is an exception. Lexus does not offer more than 500$ discounts. You can read some past edmunds press releases on incentives.

    http://www.edmunds.com/help/about/press/101757/article.html
  • You may be right, who knows? TIme will tell
  • "Never", Do you work on Decision making at Toyota? This is not rhetoric, I am asking seriously?
  • Thats right on the money. Besides, Only extreme maniacs drive like they are doing slaloms on the freeway.

    I really worry his wife will eat him with barbeque sauce if you even think about driving like that.

    Ironically BMWs record in high ticket racing is very poor.
    Look at Le Mans. In 60 years they have won just one race.

    This does not speak much of BMW.
  • Lexus may be second to BMW in driving experience. But Lexus does not claim that its the ultimate driving machine.

    BMW for its "Ultimate so and so" has won le mans just once. It has won daytona 24 just once. and it has never won Formula 1 on its own. Not much of a ultimate driving experience IMO.

    In contrast Porsche has won 16 and 20 times in Le Mans and Daytona respectively.
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