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In other words as of today
1. LS 460 = $65-67K at least
2. LS 460L = $70-72K at least
Lexus will have to discard cut-rate pricing in a gradual way so that it can compete with germans on an equal footing globally. It should gradually raise the pricing to compete with 7-series over next 4-5 years and keep the technological edge.
Keeping the price down may work for value models like the Toyotas but in Luxury arena we need premium pricing.
If a great product is value-priced compared to its competitors it casts a negative psychological influence on prospective customers in well developed markets like US, Europe and Japan.
Please remember that the original aim of Lexus LS to provide value back in 1990 was to gain market share through cut-rate pricing and give the customers a taste of Lexus. The value pricing or cut-rate pricing in itself was not the end goal. it was a starting point at least in my opinion.
Now, after 17 years if LS continues to be offered at 21% discount compared to Audi A8 and 45% discount compared to S550 then it will generate a negative subliminal effect on prospective buyers.
The goal now should be to establish LS as a global flagship competitor to S-class. And premium pricing at least matching Audi A8 and then gradually raising it to 7-series is the way to go.
I do understand your point that Lexus should offer you the car loaded with value, but I am afraid it will be bad for Lexus brand as a whole.
Steve
Upon visiting these wikipedia webpages, I noticed how well written are the articles on german cars like BMW 7-series and S-class as well as Porsche.
On the other hand articles on lexus LS etc are very poorly written.
It seems that the PR departments of european brands are very active and alert, whereas the PR department of Lexus and Lexus enthusiasts are oblivious to the urgent need of revamping these articles on wikipedia.
Wikipedia is here to stay and is getting ever more prominent day by day.
*1. Stage1 : Offer more for Less. example, LS 400 in 1990.
*2. Stage2: Offer more for same: this is where lexus should be.
*3. Stage3: offer Same for Same: example Audi A8 and BMW 7-series are very close in pricing offering similar contents at similar pricing. Audi is slightly less expensive because of less horsepower and less gadgets.
* Stage 4: Offer same for more: This is where S-class is.
It offers similar horsepower, gadgets, comfort, prestige, for a lot more money because it is well established. More so than BMW and Audi.
Lexus should evolve from stage 1 to stage 2 now and price its products head-to head with Audi A8 at least.
MSRP pricing is all about what is standard on the car. An LS 430 ultra at $72K is very similar to a loaded SWB A8 already. Lexus is entering a broad test pricing phase right now - when you think about it - and they are not about to leave any customers at the altar. So you'll see prices range from $65-67K for a moderately equipped SWB LS to around or just over $100K for the limo edition LS600HL.
I again called my dealer today and the pricing I just put up there was his estimate as there is nothing official from Lexus yet but there are some guidelines - as he put it. The news that is scaring me is the demand for the hybrid and what's more based on the discussions I had with him is that people are depositing the full blown limo edition of the 600HL, which they are telling people will run at $100-105K. So Lexus doesn't need to build stature by raising prices thru the roof. They can have their cake and eat it too with greater model variability, thereby keeping the $65K customer and attracting the $100K customer with the same model platform. That is really the second stage of stature anyway. Pricing follows and the tiered availability of models brings the higher prices. As for MSRP - compare features for price - not just price. An LS460 won't debut at $70K simply because it lacks the standard features of a $70K Audi and the others you are comparing it to. But a comparably equipped LS460 will surpass the A8 and you'll see plenty of $80K+ LS sales in LWB platform and of course in the even longer wheel based LS600HL. Then of course you have the LF-A coming and in 2009 you'll have a $150-170K super Lexus with a V12 hybrid. The 600HL when coupled with those two cars is plenty of stature and it's all coming to a theatre near you shortly.
It is so great to have you back posting again. You had every right to get upset at some of those "ignoramuses". I also saw what one of the participants called the Lexus fans. That behavior is so childish that he should have been banned from these forums.
Getting to the subject at hand, do you have any idea about what sort of AWD the LS600hL will have (electrical or mechanical)? Also, could you explain the peculiarities of both to those of us that do not know the fine details? I would think that the LS600hL will be equipped with the most sophisticated features no matter what.
Other board - It has degenerated so badly with some of the most immature posts I've read on Edmunds in 6 years of posting. I noted that even Pat commented about it when I caught up on some posts. It's becoming a Euro board and without Lexus participants it'll die off. I'll stick to this neighborhood and avoid the lunacy that goes on over there. But I've also got a lot of business activity going on right now so I'll be away at times.
Let's get a good handle on the pricing but I'll tell you what I am hearing is there is a lot of demand for the LS600HL and in the most expensive trim no less.
I think that Lexus should continue pricing sensibly. Their vehicles are superior to the equivalent German brands in quality, reliability, service and retained value. With the hybrids they are vastly superior in technology. It seems that the LS600h will be priced at a bargain level:I don't think Lexus will make money on them for a few years. Production is evidently going to be limited. I believe Lexus should concentrate on bulding up sales in Japan itself and in Europe and the Middle East. If that leads to a severely limited supply in the USA, so be it. The LS460 itself with its newly refined powerplant and an eight speed transmission and all the electronics that works (and is superior to the Eurocars) and justly priced will be a very big winner
It will have an 8-speed for a reason.
It will grow in size for a reason.
It will be better looking for a reason.
I don't see a reason for giving the new car all of these attributes, and then not raising prices accordingly.
This car is not being redesigned, it is being revolutionized!
Toyota may be ignoring every other HELM (except Mercedes) on the market! They have made a killing with the LS, and they will price the Next LS so they will continue to. Toyota will win either way they go.
But selling 40-50k LS a year cheapens the car, to a point. Everyone knows it's an incredible car, but it's not precious and few.
I want Lexus to actually reduce volume sales by increasing prices, and not go to 350-400k sales a year. Pricing the LS too low is counterproductive.
You get numbers, but lose respect. Pandering to value market is......pandering! :mad:
How is Lexus growing and evolving? You can't just start making $150k cars. You have to grow and evolve into that.
The LS is their best bridge to get where they want to go. If the 600hL is $100k, where does the LS460 stop? It would have to get to at least $85k!
I want to see the LS460L priced at $70-85k, an the 600 from $90k-105k.
DrFill
I guess I believe the rumor that the LS will start a shade over $60, but the ones found on lots will start right around $65k, and the LWB will approach $75k with a Ultra Lux option Pkg.
I think a 25-30k sales volume should be the sales target, and if it exceeds that, prices are too low, and need adjustment.
DrFill
2013 LX 570 2016 LS 460
I hope Lexus doesn't lose the shine of their perfection model. They should never put a car on the road that hasn't been tested to exhaustion first. IF they do, they'll become just like everyone else, only less.
If a buyer can't accept a $15k value over a comparable S550, those aren't the customers that Lexus needs. They just want somethin' for nothin'.
Lexus can now sell the LS on size, features, looks, and power. A $25k lower price is no longer necessary! :mad:
DrFill
Imagine some body telling you to carry on same business practices as you were 20 years ago. Your company will be wiped out!
Luxury is in the mind and to capture the essence of luxury a price based exclusivity is a must. There is no such thing as value-Luxury. Its an oxymoron created by morons. There will never be a luxury brand offering value-luxury.
Look at what happened to Acura. They completely destroyed their brand by not properly differentiating their TSX, TL and RL lines. They also went from bottom-up and not from top-down like Lexus did. And now they have trouble selling RL.
RL is not much longer and wider than TL. TL already provides customers with an excellent package so why would they go to RL? This is what they call improper positioning.
In the same manner if Lexus continues to price LS 460 at E-class prices, it will be psychologically damaging. Luxury buyers will buy Lexus by the thousands and yes the model will bring in profits, but the brand will suffer dramatically. Lexus will forever remain a value proposition in their mind.
To become a true luxury brand lexus should shun value-pricing, cut-rate pricing and price the LS 460 at least as much as Audi A8 +/- 1000$ at most.
LS 460 SWB = 67-68$
LS 460 LWB: 71-72K$.
The LS is not about lower costs and lower pricing. its about evolving the brand. If you feel onus is on germans to bring down their costs and price their cars lower then so be it.
In the long run Lexus should maintain the technological edge and move from Audi to BMW pricing and then gun for the S-class itself.
Remember, its meritocracy first and heritage after. No one cares who you were, but what you are today???
Did someone say the LS doesn't ride well?
It doesn't handle as well as the Germans, but ride is different, and generally regarded as better in the Lexus!
I'm sure the new S550 has as good a ride quality as the LS. But I don't think people are buying the S becuase it has great handling.
The 7 handles better, and sells far less.
Hopefully the Next LS will find the medium between the 7's handling and the S' computer-controlled ride.
Something tells me when Lexus asks current customers for ways to make the LS better, cat-like handling isn't front and center. It's competent, but won't excite.
Hopefully they can court new, younger buyers with a more dynamic personality.
DrFill
I'm not sure what that all means exactly, but the German cars are generally well known to have better handling and performance dynamics than the Lexus. The Lexus LS is better known to provide a soft "comfy" ride, although after many hours the less-supportive softer seats have been reported by many to be less desireable than the more supportive seats typically found in the German vehicles. For typical use, it is generally a matter of preference.
Have you driven an S-Class for yourself to understand the difference first hand?
Regarding price policy . . . Lexus is implementing the perfect strategy by tiering the LS into a standard and upper bracket. It is important that the standard LS be less expensive than the German counterparts, as that creates the "value" that Lexus is known for and the customer base expects.
As a vehicle significantly less expensive than the German counterparts, the LS shines as a terrific buy. Without that value, Mercedes would most likely be the marque to gain the most, IMO.
The upper tier of the LS600hL will do very well because it will be unique, and I dare use the word "exclusive", IMO.
TagMan
I also hope that Lexus improves on the driving dynamics but I'm not sure that they want to. Too much of their core audience is from the Caddy, Lincoln group who could be turned off to a car that offers more road feel and is a bit more sporty to drive. I wish they would at least offer an option for sport seats (firm and supportive) and a tighter steering and suspension.
I could be wrong but if they price the LS similar to comparably equipped S Class and 7 series, I don't think that they'd be nearly as successful. And I don't think they will vary from their tried and true formula. It may be a bit early in the game for them to command the same premium in status and perceived image as BMW and MB. It's amazing that they've come as far as they have in such a short time.
That is exactly correct, my friend. A major component of the Lexus LS success story is the price advantage over the competition. Add to that a vehicle with highest reliability ratings and it appeals to the rational side of the brain. Never mind that the competition may be more attractive or drive with quicker response, or have other desireable features, as these other attributes become overshadowed by the "value" of the LS.
Lexus has some of the best marketing strategy on the planet. You are right to mention that they would be foolish to change course. Remember, however, that as their models evolve, so will the marketing. An example of this is the LS600hL which will receive a new and exciting marketing approach, not seen on the regular LS. Also, the IS model is getting legitimate kudos for performance, and the Lexus marketing group will be tuning into that more as time goes by.
Masterful. And value is key. And, if you stop and think about it, it is a great thing, because where on this planet do you get genuine value all that often any more?
TagMan
And they sure could use another product or two so how about a large coupe based on the LS to rival the CL and 6 series.
Both. While Toyota can be credited with performance know-how, they are not pioneers or leaders in the field. Particularly with regards to a performance sedan, which is what we are talking about here. BMW and Mercedes are much further ahead in the area of performance as is relates to a sedan vehicle.
The second half of the answer is about the cost . . . and performance, especially as it is enhanced, comes at a cost. The initial engineering comes at a cost, and then the implementation of that engineering has additional costs associated with it. Consider the cost of the AMG or M variants. Of course, these are extreme examples, but they make the point. As performance is enhanced, a cost can generally be associated with it.
Personally, I think that the typical LS buyer is not as concerned with enhanced performance. The standard ride of the LS is good enough for most LS buyers. It is, afterall, a luxury vehicle, and there are other vehicles out there for those that want the driving dynamics AND luxury all in the same car. The success of the LS's "soft" ride is testimony to that, IMO.
TagMan
On a side note, my dad (50+), who drives a 3.5RL was forced to drive my 2004 TL, and said he couldn't stand the ride. He said he felt the road way too much, and preferred the comfort and loftier ride of the 3.5RL.
So, the question comes down to, are these the people who Lexus is targeting w/ the LS? Are the people on these sites who are complaining about sportiness on an 80K car the actual target audience?
In my opinion...I don't think so, but I could be wrong. It won't be the first time...
Read my post 2306, last paragraph. I think the answer is pretty clear. Most LS buyers are quite content with the ride of the LS, and rightly so.
Performance enthusiasts are a large group, however, but not the primary demographic target for the LS.
TagMan
Actually yes, for 2 weeks. Then, I ordered one. But that was before I ran into the LS. After driving that, and noting that there were 13 defects in the new S-Class that needed fixing, and 0 in the Lexus, I cancelled the S and bought the LS the same day.
I do freely admit, however, that the S-Class was more fun to drive, more comfortable, and more stylish, inside and out. The Navigation was awful though, and as I said, lots was wrong with the Demo I drove. Not impressive. I'll give up the little extra fun for the reliability and lower price.
I had a similar experience with the last gen S Class. I went for a test drive and just before we left the dealership, I tried to tilt the steering wheel down and it would not go. The salesman said that there was a problem with a fuse.
Then the windows wouldn't operate properly. I couldn't believe that this was in an 80K car. That car drove so great and looked so good to me that I still almost pulled the trigger but then, like you, I drove the Lexus and my "brain" took over. That said, I think that cars are emotional purchases and in the end you should get the one that delivers more on that emotion since even if you have a few problems, the vast majority of the time you will be driving what you like and will enjoy it. I go back to my wife's BMW X5 which twice had electronic malfunctions that required it to be towed. Terrible right? But you know what? It's her favorite vehicle of all time. That's because for the other 99.99999% of the time, she loved the way it drove. With the LS, Lexus delivers astonishing reliability and quality but is somewhat devoid of emotional attachment. I've had mine for 2 years and I can't say anything bad about it. Nor can I rave about how enjoyable it is. It does what it says it will do and does it every time. It just does not "stir one's sole".
Just my opinion.
Lexus' demos should change significantly from now on, as this won't be mistaken for a "Big Toyota" anymore.
This will be "The Best Lexus Ever"!
The Germans will have a much tougher sell on their hands.
DrFill
Let's see if they can improve on the driving dynamics and depart a bit from their softer "American roots". It will be interesting.
I'd like to believe it, Doc... but there are no reports of a test drive yet, and its only 6 weeks to release. What gives !!!! Is Lexus hiding something, or is there something to hide ??? Why is it that nobody can say categorically how the new LS drives ? Any ideas when Lexus will let the autorags have at the new LS ? For a change, I'd like to hear/read about the DRIVE not the features, the final specs on the car, the full options list, and the price (final).
I think the people who are spending $100k on a BMW and Audi are perhaps the only group that really care about performance. Mercedes is more for the name, and the Lexus LS is for a mixture of name, quality, and value. Lexus is building its name, and Mercedes has been slipping. With all the people complaining about their controls and their numerous problems, Lexus has a shot to be a powerhouse brand! But, everybody who thinks the LS is hurting b/c of it's performance are not reading the right signals..
ON the price side: The only way Lexus will be able to dramatically increase the price is to do it slowly and over a long period of time. Also, by offering more options (like the first class seating in the back), and perhaps even a V-10 or V-12 engine. I think the bottom line is that the new LS is better looking than the last one, and they just need to aim for a bit more "sexy" instead of "stodgy" when they do their designs.
Well, I have to disagree. No question that the name and prestige of MB are part of the equation but it's not the whole thing by a long shot. I know several people who have gone the other way. That is, they have been devoted MB S drivers for years and finally got fed up with the problems of the last gen S Class. They moved to Lexus for a trouble free experience. That said, if the MB was as reliable, I think they would have been very happy to stay at MB because of things like the ride, driving dynamics, seat comfort, safety, solid feel of the car and of course prestige. I drove both before I decided and to me the S Class did drive better (for whatever you think it's worth, CR said that the last S was the best riding car they ever tested). The LS is a very traditional American riding car and there is a vast difference between that and the European type ride. I like my LS but if I were to go on a 4-5 hour drive, I would prefer the seats and the feel of control that an MB or BMW imparts. Remember, the status of the MB came about because of better quality at that time. When American cars were falling apart after 25K miles, the MB's were cruising around like tanks with 100K miles (as long as they were serviced) and on top of that they were very safe and solid, wouldn't rust out etc.. Prestige didn't just "happen" it was earned.
Actually yes, for 2 weeks. Then, I ordered one. But that was before I ran into the LS. After driving that, and noting that there were 13 defects in the new S-Class that needed fixing, and 0 in the Lexus, I cancelled the S and bought the LS the same day.
I do freely admit, however, that the S-Class was more fun to drive, more comfortable, and more stylish, inside and out.
OUCH! Your demo experience was shameful that a dealership would even permit so many things to be wrong with ANY demo. Pitiful, at the least, but I do not believe that it was completely representative of the more typical scenario that most folks would have experienced.
And, in spite of the quality issues that plagued that demo, it is admireable of you to indicate that "the S-Class was more fun to drive, more comfortable, and more stylish, inside and out."
TagMan
The LS competes really only against the S. BMW and Audi are too few and far between for Lexus to really get worked up about. If you consider the prestige of the S, that's what the LS aims for... And it should be incremental and that is the way the LS has gone about its business.
Now comes the new LS series of sedans. This is a defining moment for Lexus. You may sometimes get a second chance to outdo your opponent, and when you do, grab it and don't let go. If the LS460/600hL fails to make a dent in the prestige quotient of the S-class, then the LS would have a long road to climb. Hopefully, Lexus will combine the beauty, features, and price of the new LS with a higher prestige and help lift the entire Lexus line with this new LS series. Ultimately, Lexus will need some sport-tuning for more "performance" in its cars to gain more traction and higher recognition among car fans. The future rests on the younger generation, and you must attract and keep them, and having a sporty look and feel and perspective will truly help in that direction.
The higher tier of the upcoming LS600hL will boost the prestige factor a bit, IMO, since that particular vehicle will be so exclusive.
In the final analysis, I expect the target audience for the LS to be about the same as it always has been, with exception of the LS600hL, which will successfully fish in the waters of the even more affluent.
Sportiness and performance will most likely be delegated to the other Lexus lines, particularly the GS and IS, with exception of the HP ratings of the LS600hL, and the upcoming rumored "super-sedan".
TagMan
True. However, I am refering to the LS as Lexus' benchmark sedan, and the brand's premium car. The LS defined the Lexus line of products back in 1989, and continues the fine tradition of leading the way for other Lexus products today. The new 2007/2008 LS series would be required to do the same - lift the boat of its siblings - and enhance the brand going into the future. Add some sort of performance-enhancement to these LS cars and you create another level of interest among those looking at the German brands. Associating performance to the luxury the LS provides will be a boost for establishing a younger, more upscale, uppity folks looking for a premium sedan that's got it all. Lexus will do well to look to the younger generation if its to remain a leader going into the future.
The market demographics, would likely not change all that much, however. Even with the German cars, which are better known for improved performance characteristics, the demographics are still very similar.
It seems that we agree that the benefit of enhancing the performance in the LS would be to grab more of the market share from those seeking German cars. However, that would only apply to those consumers interested in German cars for those performance characteristics, because it needs to be clear here that many, if not most, of those looking to the German cars, are actually just looking at the luxury, style, and prestige factors more often than the performance factors. The performance attributes are a plus to those German marques that some are interested in, but many are not.
If most luxury buyers were interested in enhanced handling characteristics, then the LS would not sell so well, but the proof here is that the LS does sell very well, and thus the primary needs of many luxury buyers are fulfilled with the LS.
TagMan
I do suspect that LExus will get ever closer to both BMW and Mercedes, probably Mercedes with the LS than ever before with this new version. The style is a hybrid between the S-Class nose and the 7 Series butt, with a Toyota smooth-over, but it's attractive. It'll probably drive more that way as well. Perhaps the perfect blend for a guy like me, who savors dependability and low maintenance costs.
Let's remember how the LS was launched and one of the main reasons it succeeded. They under cut the competition significantly. My memory may be a bit off on this but it seems to me that in 89-90 when it was launched, an LS was about 35K and I'm thinking that a comparable S class was about 50K. So someone had to see about 40% more in handling, prestige etc to justify the Benz. If price were no object then the Benz would win for most. As for now, I think that it's true that most people don't buy a lux car strictly for handling and driving dynamics but once you've enjoyed that and have become used to that type of driving, it may be a bit harder to switch to the soft "american" ride. With a huge price difference and the many problems MB has had re the quality, that "trade off" is easier and hence the great success of Lexus. If MB improves it's quality and if Lexus doesn't maintain the price differential, I think that MB will be back in a big way. The LS still needs to be a "value play" in my estimation or they need to close the gap on the driving experience. I hope they go with both and if so I'd be happy to test drive the new LS. If not, I think that my next ride after my LS lease is over will be a Euro car, MB, BMW or maybe even Audi.
Yes, I have been to Europe and I see mostly tiny little
"econo" audis, not the BIG ones...I couldn't care less about Europe, I just care about the car I will buy.