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German quality rising vs Japanese pricing rising....is the value eroding?

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Old 07-17-09, 10:46 AM
  #31  
mmarshall
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Originally Posted by The G Man
lexus knows where their money makers are, it is in the soft riding, quiet, quality interior cars.
So why, then, did they stiffen up the ES350's suspension/tires and cheapen its interior so much over that of the ES330? They also cheapened up the IS250/350 interior, but in a different way......they actually made it look MORE plush than the IS300's, while using cheaper materials underneath. They also took away the IS300's smoother-riding 55-series tire option.

If the Germans can make a reliable, soft riding yet handles well, quiet car with a good quality interior, then Lexus will be in big trouble. So far they havent yet, but they are getting close.
The Mercedes S550 is extremely quiet and smooth-riding, and has a decent interior. It only lags in the reliability department, and that is slowly improving.
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Old 07-17-09, 10:47 AM
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I don't see the German quality rising, because it's not really a priority...

Now having both a Lexus and a BMW, I can see how the German cars can have tons of small electrical annoyances, etc., while my Lexus (and all the other Japanese cars I've had in the past) is simply error-free. I like both, but for completely different reasons, which is why I think the type of customer that buys Japanese vs. German is totally different.

My Lexus is much cheaper, it's fast, it's simple, and somewhat comfortable.
My BMW is much more expensive, much more fun to drive, much more comfortable, feels much safer and solid, rarer, and much better looking in my opinion. At the end of the day, it's about a 10% better car for about 50% more money.

So, generally, my observation is that people who buy German might have more disposable income (or are at least willing to spend more on cars) and are less conservative buyers than those who buy Japanese. Japanese cars are for the masses, and they comprimise to appeal to as many people as possible. There's nothing wrong with either, but I think there are just different types of buyers out there.

But, now that the new E-class has a MUCH lower starting price than it did before, I think Mercedes might be taking the Lexus approach of selling more units and gaining market share... we'll see. It's now a basically very luxurious, good looking car with GS pricing.
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Old 07-17-09, 10:48 AM
  #33  
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Originally Posted by MPLexus301
I am talking in terms of prestige and brand recognition, and mainly in the US. We all know Lexus gets spanked in international sales numbers
Sorry about that, but you did not say you comments only applied to the number 2 biggest auto market in the world only
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Old 07-17-09, 10:53 AM
  #34  
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Originally Posted by IS-SV
Lexus (and Toyota) is well aware of the average age of it's buyers, and I see increased emphasis on appealing to a broader and younger audience.
Younger people, though, in general, are not where the money is. Older people have had many more years to save, and can generally afford more expensive vehicles. To ignore them, as a number of manufacturers have done lately, is, IMO, foolish marketing. Cadillac, Buick, and Lincoln, among others, are shortly going to find that out if they keep moving their vehicles away from the traditional big, plush, soft-riders that many older people prefer. The new 2010 Buick Lacrosse, for instance, may indeed appeal more to those under age 45-50, but it may alienate the older buyers, and the younger people (while there are exceptions) generally don't have as much money to spend.
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Old 07-17-09, 11:26 AM
  #35  
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Originally Posted by mmarshall
Younger people, though, in general, are not where the money is. Older people have had many more years to save, and can generally afford more expensive vehicles. To ignore them, as a number of manufacturers have done lately, is, IMO, foolish marketing. Cadillac, Buick, and Lincoln, among others, are shortly going to find that out if they keep moving their vehicles away from the traditional big, plush, soft-riders that many older people prefer. The new 2010 Buick Lacrosse, for instance, may indeed appeal more to those under age 45-50, but it may alienate the older buyers, and the younger people (while there are exceptions) generally don't have as much money to spend.
Younger people, depending on what you call younger of course (under the age of retirement) is exactly where the money is. Toyota/Lexus is well aware and wants to exploit the opportunities. We are not talking about 20's and 30's, we are talking about people in their prime and peak earning years 40's and 50's, including people like many of the premium car buyers here on CHIT CHAT with 6 digit personal incomes. Included in these lucrative age groups are huge baby boomer populations that must be addressed of course.
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Old 07-17-09, 11:34 AM
  #36  
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Originally Posted by IS-SV
Younger people, depending on what you call younger of course (under the age of retirement) is exactly where the money is. Toyota/Lexus is well aware and wants to exploit the opportunities. We are not talking about 20's and 30's, we are talking about people in their prime and peak earning years 40's and 50's, including people like many of the premium car buyers here on CHIT CHAT with 6 digit personal incomes. Included in these lucrative age groups are huge baby boomer populations that must be addressed of course.
I agree...and really it is even people in their late 20s and 30's- many people fresh out of grad school or med school are earning six digit incomes and want something sporty, fun, upscale, emotional, and non-practical. My best friend just graduated from UNC Chapel Hill, landed a job with Deloitte, and is now deciding if he should buy a 335i, C350, IS 350, or a used 911

Also, even when people buy used they're still buying into the brand, let's not forget that. Younger people buy tons of CPO cars and Infiniti Gs (especially) and 3 series coupes are in hot particularly high demand. You don't always have to pay a lot for excitement or passion...it can come at varying levels of income, new or used, old or young. If Lexus made a coupe version of the 3GS, no questions asked- I would be hunting one down on the used car market in 2-3 years. Same could be said for an IS coupe. Since there isn't one I am forced to either go for the sedan or look elsewhere.
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Old 07-17-09, 11:51 AM
  #37  
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yeah. screw the japanese and germans.

my next car is gonna be korean.

kia, that is.

kia forte. now that's value right there.

Last edited by LexFather; 07-17-09 at 07:18 PM.
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Old 07-17-09, 05:01 PM
  #38  
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The Forte looks like the Civic for 5k less.
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Old 07-17-09, 06:42 PM
  #39  
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Originally Posted by MPLexus301
BMW is BMW, Mercedes is Mercedes, Lexus is Lexus- those are all very clear identities that can be described by just a few words for each, unanimously across the globe. The other companies, even Audi, are still struggling for a meaning.
4) Looking at the 3 points above, I don't see this as Japanese vs. Germans or value vs quality/product debate, but rather an illustration of the divide that is becoming ever more apparent in the premium segment. Lexus fought long and hard to make it to the top and now that they're there, they no longer sell cars based on value. Lexus is the leader in hybrids and they have pioneered several other improvements and technologies in the last few years. Audi is making the leap over to join the others, but Volvo, Acura, Infiniti, Cadillac, and Lincoln will all be left to battle over the scraps, and often that is a battle that comes down to terms of "value".
Audi had the first hybrid in 1989, remember. Audi is already a tier one premium luxury automaker, arguably above Lexus in regards to worldwide prestige, motor sports, and high-end cars. You seem to want to group them in some sort of lower class because their sales numbers in the US are below Lexus and the rest, but this doesn't make logical sense when you look at the constant innovation and industry trends that Audi sets, much less their worldwide sales figures. Lexus is just starting to shake them free of Toyota, L-Finesse is new, Audi has a proven styling heritage going back decades. Again, I am not sure how Audi "has not yet joined the club". I've seen you and others engage in this more than once and just wanted to see why it is that Audi isn't "at the same level" of Lexus, let alone BMW, MB, etc? You honestly think that Audi should be grouped with Acura? Audi already 1) Sells far more cars than Lexus, 2) Has a time honored tier one heritage to back up the brand, 3) has products that consistently set the bar for quality, 4) Has S-Line, RS, the R8, V10s, blown V6s, dual clutch DSGs, W12s....etc. I mean, come on, are you going to wave the Prius's Hybrid Synergy Drive flag every time the Germans powertrain engineering is brought up?

I just don't understand this. Yes, Lexus = reliable, quietness, hybrids, German = balance, sophistication, innovation. I have no problem telling you right now I haven't seen this equation change. Some of Lexus's less than thrilling products aren't helping their cause, but if and when the Germans start at least getting in the same ballpark of Lexus reliability (even I am not drunk enough to say they are close yet), Toyota should be worried. True, a handful of diehard fanboys may go nuts, but the marketplace and all the buyers in it win when Lexus is forced to start injecting personality instead of electric-ness into their cars. The IS-F was a lovely start, may I add, but it's time to get serious if they have any hope of really competing with stalwarts like Audi AG, Daimler, or BMW on the global stage.

5) Still, looking at identically equipped competing models, Lexus does still come in a few thousand dollars below BMW or MB in most scenarios. LS 460L vs S550 or 750i falls deeply into Lexus favor in terms of price. GS is priced a few thousand below the E class and 5, and the IS is the same way. Also remember that Lexus has far larger economies of scale in terms of sharing parts and R&D costs, so they are truly able to offer their cars for less money (to an extent).
...And Audi shares those same large economies of scale, and their vehicles are priced well above a comparable Lexus.


Lexus was at the top, and the Germans were more towards the bottom- Lexus had a lot to loose and Mercedes had a lot to gain. It just so happened that Lexus fell a few pegs when Mercedes/BMW went up a several. Looking at the grand sceheme of things, I think that BMW/Mercedes advanced more than Lexus fell, but that is partly because they were so far behind before
Well, what was Lexus "at the top" of? This is a very broad way to put it all. Sure, they beat the three luxury makers from Germany in regards to cost of ownership and reliability, but as far as grossly important aspects such as powertrains, styling, and driving dynamics, the Toyota-derivatives that Lexus was labeling their own in the 90s and early 00s didn't deliver like a BMW or Audi. And I would have no problem arguing why products like the current IS and GS are just simply inferior to the competition from Europe in more than one way. Obviously, there is a tradeoff for the lower price here.

Last edited by FKL; 07-17-09 at 06:56 PM.
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Old 07-17-09, 06:57 PM
  #40  
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Originally Posted by dunnojack
yeah. screw the japs and germans.
You might want to think about not using the word "Jap" , I take offense to it.
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Old 07-17-09, 07:15 PM
  #41  
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Originally Posted by 1SICKLEX
Lexus had issues and they seem finally addressed
I really would like to know where you think Lexus had issues?

Also, I would like to know how you feel they have been addressed? I don't think they are %100 addressed but they are getting closer.
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Old 07-17-09, 07:55 PM
  #42  
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Originally Posted by FKL
Audi had the first hybrid in 1989, remember. Audi is already a tier one premium luxury automaker, arguably above Lexus in regards to worldwide prestige, motor sports, and high-end cars. You seem to want to group them in some sort of lower class because their sales numbers in the US are below Lexus and the rest, but this doesn't make logical sense when you look at the constant innovation and industry trends that Audi sets, much less their worldwide sales figures.
I don't disagree with you, and in my personal opinion Audi is right up there with the best. In America, though, they still have a ways to go even considering the recent strides that they have made. Until the last generation A4, the brand was really an afterthought for most buyers. Since then, the A6, A5, A8, S and RS models, Q7, Q5, R8, and new A4 have all elevated the brand substantially in a relatively short time span. To me Audi is one of the top dogs...to most Americans they are just now showing up on the radar.

Lexus is just starting to shake them free of Toyota, L-Finesse is new, Audi has a proven styling heritage going back decades. Again, I am not sure how Audi "has not yet joined the club". I've seen you and others engage in this more than once and just wanted to see why it is that Audi isn't "at the same level" of Lexus, let alone BMW, MB, etc? You honestly think that Audi should be grouped with Acura? Audi already 1) Sells far more cars than Lexus, 2) Has a time honored tier one heritage to back up the brand, 3) has products that consistently set the bar for quality, 4) Has S-Line, RS, the R8, V10s, blown V6s, dual clutch DSGs, W12s....etc. I mean, come on, are you going to wave the Prius's Hybrid Synergy Drive flag every time the Germans powertrain engineering is brought up?
I don't disagree with you, but you're talking about international markets and I am talking about the United States. I have never tried to take anything away from Audi (I love the brand) but even you can't disagree that until the last few years Audi was the "Oh yeah..." moment for most car buyers, not their first thought. The sales numbers show this.



I just don't understand this. Yes, Lexus = reliable, quietness, hybrids, German = balance, sophistication, innovation. I have no problem telling you right now I haven't seen this equation change. Some of Lexus's less than thrilling products aren't helping their cause, but if and when the Germans start at least getting in the same ballpark of Lexus reliability (even I am not drunk enough to say they are close yet), Toyota should be worried. True, a handful of diehard fanboys may go nuts, but the marketplace and all the buyers in it win when Lexus is forced to start injecting personality instead of electric-ness into their cars. The IS-F was a lovely start, may I add, but it's time to get serious if they have any hope of really competing with stalwarts like Audi AG, Daimler, or BMW on the global stage.
I agree and disagree. There is a market for high quality, ultra-reliable, high tech luxury cars and Lexus satisfies that quite well. They are also doing things differently in non-US markets with a heavy emphasis on hybrids. I think the company is hybrid-only in some overseas markets. They are trying to build a name and image by being uniquely Lexus, not just following Audi, Diamler, and BMW. They DO need to work on injecting more passion and excitement into the brand as a whole...that I certainly agree with.

...And Audi shares those same large economies of scale, and their vehicles are priced well above a comparable Lexus.
True. My point was that Lexus, because of it's resources and ability to share parts and costs, can price their cars lower than BMW or Mercedes which have notoriously high labor costs and much lower profit margins. Audi, while they could, has chosen not to price their models considerably below the other two. So...what were you saying...?


Well, what was Lexus "at the top" of? This is a very broad way to put it all. Sure, they beat the three luxury makers from Germany in regards to cost of ownership and reliability, but as far as grossly important aspects such as powertrains, styling, and driving dynamics, the Toyota-derivatives that Lexus was labeling their own in the 90s and early 00s didn't deliver like a BMW or Audi. And I would have no problem arguing why products like the current IS and GS are just simply inferior to the competition from Europe in more than one way. Obviously, there is a tradeoff for the lower price here.
They're at the top of the image/brand recognition game here in America, that is what I meant as I clarified above. Also, let's not understate the "importance" of Lexus powertrains- Audi has nothing to compare with the RX 450h, GS 450h, LS 600hL, while the IS-F and LS460 have some of the best engines in their classes. Audi also has it's share of remarkable powertrains, as do Mercedes and BMW. Your constant attempts at belittling the company and dragging them through the mud whenever possible is just getting so old.

Also, I wouldn't be so quick to draw comparisons between late model Lexus cars and those from Audi. The 2GS was a vastly superior car to the comparable A6 through and through- better interior, better performer, more reliable and dependable, etc. The LS has always been a better car than the A8. While I already know you'll disagree, there is really little to back up the claim that either car is better than the competing Lexus model. Audi has just now come up with something to compete with the RX, ten years after it's debut.

Last edited by MPLexus301; 07-17-09 at 08:02 PM.
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Old 07-17-09, 08:15 PM
  #43  
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Originally Posted by pagemaster
I really would like to know where you think Lexus had issues?

Also, I would like to know how you feel they have been addressed? I don't think they are %100 addressed but they are getting closer.
Sure...
Rattles in IS/GS
ES 350 tranny flare
New LS has a couple of issues

Thank goodness nothing major like full blown engines, transmissions etc. Lexus acknowledged they let quality slide. They also experimented with new plastics that look better and are easier to style but they are harder to the touch.

If we look at quality surveys the last few years, Lexus while still doing very well, was not #1 the past few years. They recently have regained the #1 spot.

One example is when the GS was having issues, Lexus of Japan told dealers to buy back cars and ship them back to Japan so they could inspect them. Looking at people on the forum, it seems the newer the GS the less rattles it has.
 
Old 07-18-09, 01:49 AM
  #44  
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Originally Posted by 1SICKLEX
To make a long story short this is how things were
-German car priced higher
-Japense car priced lower
-Japanese car offering less, priced lower (Acura)

Today with the Germans entering so many new markets and seemingly offering aggresive pricing in some cases and with the Japanese brands raising prices, is the value/price eroding for Japanese brands? I've noticed in the past the price differences between the Germans and Japanese (Lexus mainly) was 8-10k. Now in many cases its 2k-5k.
Lexus/Toyota has seriously increased the level of features and content in their vehicles which has lead to quality cuts on things that the customer does not see or use as much. Much of this started in 2005 and still happens today. Lexus is forced to increase features but wants to maintain profits while trying to keep prices low.


! Its 40k loaded for FWD, A V-6 with less power and a 5 speed. Where is the value?
I would rather have a 320hp, 6 speed, timing belted Lexus with very high quality materials than a 380hp, 8 speed, timing chained Lexus with good or pretty good (not high) quality materials. This is the case the last little while.

Lexus cost cutting is intentional.....and profit motivated
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Old 07-18-09, 04:39 AM
  #45  
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Originally Posted by 1SICKLEX
Sure...
Rattles in IS/GS
ES 350 tranny flare
New LS has a couple of issues

Thank goodness nothing major like full blown engines, transmissions etc. Lexus acknowledged they let quality slide. They also experimented with new plastics that look better and are easier to style but they are harder to the touch.

If we look at quality surveys the last few years, Lexus while still doing very well, was not #1 the past few years. They recently have regained the #1 spot.

One example is when the GS was having issues, Lexus of Japan told dealers to buy back cars and ship them back to Japan so they could inspect them. Looking at people on the forum, it seems the newer the GS the less rattles it has.

that's not saying much.

99% of cars these days won't have their engines explode.

and with **** poor sales of the GS recently, it's no wonder there's no one talking about them on the forum; hardly anyone here has a 2009 GS.
the newer any car is, the fewer rattles it will have.

I haven't driven a loaner car with over 10000 miles on it recently. but i'd like to, just to see how badly it rattles. i drove one a couple years ago, and it sounded like the dash and pillars were gonna fall apart.

that's the main problem with lexus. The cabin isn't tight enough, and it really cheapens the whole product line.
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