It would be interesting to hear from drivers in markets where Plus has been rolled out. How was the experience, satisfaction etc.? Did they buy/lease from the Plus dealer, or go to another dealer or another brand? I'm sure there will be updates from the Lexus division, and it would be good to balance that with reports from consumers.

 

But why? You really haven't elucidated the specific reasoning. For example, you earlier claimed there would be an "absence of competition" in a no-haggle system, but that's just not true. Even at the very least, Lexus dealers will still have to compete with other luxury marques, and that's the reason I brought up that existing Lexus dealerships that don't have local competition will still cut deals. It's not just other Lexus dealerships that are the competition on price.

The only thing a universal no-haggle system prevents is going back and forth between nearby Lexus dealers. And this is all still not taking into consideration the big picture - the additional value to the end consumer, including long-term cost reduction, that a universal no-haggle system would bring.

 

If you look in the model forums these experiences are out there, overwhelmingly they're negative from what I've read. Yeah prices much higher. One guy had a dealer he'd used forever that always made him a deal go LexusPlus and he had to buy elsewhere and saved thousands

 

I have no doubt the experience will more than likely​ be superior at the Lexus Plus dealer. The whole point is to remove the frustration of haggling and having to negotiate a deal. My experiences were always good at my Toyota and Lexus delaer where I went the no haggle route. I would totally recommend it but a lot of people don't see it the way I see it.

 

You are right that Lexus will have competition among other luxury brands.

Among the Lexus brand, two no haggle dealers will eventually find a price point that buyers will be willing to pay. This is no different than two negotiating dealers. The difference is that the no haggle pricing will settle higher. This is how competitive competition works. Absence of competition will yield a higher price.

A no haggle system benefits the dealer and the manufacturer from the dollar and sense pov. Value is increased for the buyer as long as they are willing to pay the premium.

 

Still have no idea how you can consider this "absence of competition". Maybe you are arguing that it is "less" competition?

As I've said, the more important part of this, especially as concerns the end consumer, is the systemic change. You keep insisting that prices have to rise, but that's the opposite natural reaction to getting rid of middlemen. And that still ignores the added value to the consumer of dealers being forced to spec vehicles to customer demand rather than focusing on cutting deals.

 

You miss the point. We aren't getting rid of the middlemen! Lexus dealers will operate as they always have.

 

Absence of competition or less competition both. Right now, offering both the No-Haggle opton as well as the traditional negotiation route is the best thing for buyers, this is ultimately what everyone wants. More choice, more competition this way.

 

I looked at the web site of a Plus dealer and they show "Negotiation Free" pricing on their new inventory and "Upfront Pricing" on pre-owned. Anyone know if the Upfront Pricing is dealer initiated or part of the Lexus Plus new car program? Just curious if this extends to pre-owned as well as new.

http://www.bergstromlexus.com/Vehicl...new&make=Lexus

 

And as an example they're showing $5,000 off an LS460. On that price you can do at least twice that right now with some emails. I know because I did just email around seeing if I could get into a better equipped LS for the same payment as mine since I'm not wowed by the LS500.

So in this case the LexusPlus pricing is potentially costing the consumer $5,000 on that particular car. Effort to get that $10k discount? Two emails. My dealer (not a LexusPlus dealer) has LS460s marked down 10% just on their lot.

 

Lexus Plus is a program that affects the way the whole dealership does business, not just selling new cars but selling used cars also.

 

How do you come to this conclusion? A dealer-set no haggle price will be higher for some (those who have the time, resources and the ability to haggle) but lower for others (those who do not want to haggle); a dealer-set no haggle price will be the average of all transactions prices and still lower than MSRP, before adopting a no haggle policy.

Under Lexus Plus, Lexus HQ does not set prices; the dealers continue to set prices so that they will remain competitive. The price set by the dealer will have to be competitive and if the dealer continually sets prices that are NOT competitive, they will lose business.

 

just because dealers overall make meager margins on new car sales (i agree and know this) doesn't negate my point at all. the sales model is stupid. huge margins from msrp + high margin tacked on crap, down to 'invoice' + hold backs, advertising funds, incentives, etc. - some (consumers) play the game better than others to navigate all this b.s. and if the dealer wants to move a car to a consumer like that then they do so, but if all consumers negotiated with knowledge and aggressively, then surely the dealer would be underwater on new car sales. they only get back to the 1-2% profit because in addition to highly negotiated sales where they might even lose money just to get the car off the lot (because the longer it sits the more they pay), they also have sales from less aggressive consumers who may welcome or even begrudgingly pay for the pinstripes, paint, rust, wheel, tire, warranty and other 'protection packages' (i.e., pure profit) as well as paying more for the car itself.

agreed.

perhaps lexus has concluded this giant inefficient shell game is ultimately a loser for luxury cars where the sales experience shouldn't feel like a shake down.

amen!

 

I agree completely - did not intend at all to come across like I was rebutting your overall point. That was the only part of your post I disagreed with.

 

That's a good point, the only business that has low margins like that are gas stations which have mini-marts to basically make the business money. However gas is a commodity so not a great comparison but similar in the fact that many have had to supplement the main product with other offerings to make money.

With Lexus' being so reliable and going to 10k mile oil changes, it's a wonder how long dealers can sustain this model. However the owners and GMs aren't really scraping by so I'm not feeling too bad for them.