How many new luxury car buyers will choose Lexus now that prices are like German cars
Last edited by usermel; Apr 19, 2006 at 07:46 PM. Reason: spelling
off topic
is MB going to offer a less powerful S class in the US like the S430 was?
Consumers are now savvy and know what they want and what they can get. They know that although other luxury automakers such as MB or BMW can offer the history and performance and luxury that make them highly sought after, Lexus can provide similar amenities but as a better package as a whole. That's why Lexus will sell, and that's why Lexus can charge accordingly.
So if cheaper pricing is the only reason to go with Lexus, then they haven't been doing their job.
The new Lexus automobiles have increased in refinement, comfort, and features to levels past their competitors in a variety of ways..this is a process that began with the first LS. Now with captivating styling, the top-of-the-line service and other accoutrements means that Lexus should be able to sell on its merits alone, and not because of the pricing.
But it's still a work in progress, and the Lexus lineup has been expanding the top end but not losing the bottom end. Entry-level IS/ES, and possibly base price on the LS will all remain close to the original points they began with.
But I hope Lexus doesn't price itself out of my range. Otherwise, I can see myself going back to Toyotas. Good thing the trickle-down effect has given the new Toyotas lots of Lexus-like amenities and ambience.
is MB going to offer a less powerful S class in the US like the S430 was?
Last edited by usermel; Apr 19, 2006 at 09:51 PM. Reason: words
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You are asking question that should be one year old. Today market has answered that it wants better, higher priced Lexus's.
However, will quality slip? I agree with you, the early LS 430s had some serious issues which the LS 400 did not have in 1989. I'm hoping that was a blip for Lexus quality overall, as for instance in the recent JD Power results, the LS 430 is the one breaking records, and continues to be a top pick. Plus Lexus claims that with the LS 460 the Tahara production process was overhauled to make 'the world's best even better' so who knows, quality could stay stellar. But then there's the fact that more and more tech is being put into luxury cars to the point where it might not be possible to have the LS 400 type reliability. But I'm hoping the LS reliability and the rest of Lexus stays top-class. There has been some blips in the past few years (out of Lexus' 'dark age' time), but overall I'm still giving them my trust.
Another point is that Mercedes' drop in quality, in particular, seems to stem from a variety of production issues, and not simply arrogance at being 'on top and charging top dollar.' It seems that in the rush to compete with the Japanese and in the American market, Benz sacrificed quality and cost-cutting, along with putting in new electronic equipment that was prone to glitches. I think that it was a series of production errors that resulted in the bottom-of-the-heap ratings for Benz quality and reliability. I'm hoping that Lexus won't make the same mistake.
I and others have the feeling that Lexus will surprise some observers by making its new lineup still price-advantaged compared to the competition. There are rumors that the LS 600h L will be cheaper than expected (far from the $125,000 figure the NY Times mentioned). There will still be a $10,000 minimum advantage to the Germans. Yes, it's getting less and less, but it's there...
Another bit is that in the prestige luxury world, $$$s count and it seems that the cut-rate pricing hurts Lexus' image. People can say, "Lexus is #1 because they dump their product/sell for cheap/undercut on price"...the wikipedia article http://en.wikipedia.org/wiki/Lexus suggests this. So Lexus, having built its reputation, no longer needs OR should use the price gap. Having = price suggests = or better value...! Also, there is this line of logic in the prestige luxury segment that 'if the customer can afford $XX,XXX, what's another $X,XXX?' Sort of the 'luxury buyer thinks of gas costs as a *'
From the consumer, pocketbook point of view, this is terrible. I am budget-minded, although I do believe in spending on luxury. So the idea that Lexus will go cost-up is not welcome to me. I can just hope that as Lexus grows, my income earning potential grows and I can afford the cars. I do think that I will opt out of the more expensive packages. As much as I ooh and aah over the rear-seat package on the LS, I doubt I will get it (even if I could afford the LS at this point!). The ES/IS are still competitive for me...if an IS coupe shows up...
Lexus moving up, because it can and because it's #1 in the US, grows a larger opening for Acura/Infiniti, the other Japanese luxury makes, and Cadillac/Buick/other near luxury-makers to come in and appeal to the more frugal luxury buyer. They won't get the same level of prestige and top-of-the-class luxury amenities, but they do get a lot of the same elements Lexus has, and a few better. One big one is the reality or perception of more performance on some models. It won't have the flair and total package of Lexus, but it's a serious contender. That said, Toyota is also a contender on this front with its XLE top models...
So with regards to pricing, it's may be a catch-22. If you don't price =, you lose some perception. If you do, you lose the value proposition.
I think that Lexus will aim for the in-between for a significant period to come. I just remembered, in The Lexus Story it was mentioned that a secret to Lexus' success was the realization that 'affluent people like a good deal too!' I hope Lexus doesn't forget that. It seems though that the 'good deal' may be paying near or equal price to the competition, for more amenities. Lexus better deliver on more amenities, or give a better deal. It seems Lexus considers quality to be its trump card thus far as 'always' resulting in a 'good deal' for the customer. One last benefit--Lexus dealerships still generally, to my knowledge, allow far more negotiating room in sales.
I hope to have a Lexus of my own in the future...but the perception is not necessarily the reality. Lexus seems to have more customers coming in all the time. I may be one of them--I hope to be one of them. But when it comes to getting the most for my money, I will pick accordingly. The Lexus cachet is something that I consider highly, so it will sway my decision in favor of a Lexus. But there are all sorts of factors to consider, and usermel you are right to consider cost as one of them.









