Toys4RJill

mmarshall

Many young people, of course, don't have the high income of those who have been working for decades. So, no, they simply don't have the money to spend that their elders do....or, if they do, they blow it on a car they can't afford. For instance, when I was in college, I wanted a new Buick, but simply couldn't afford one, so I drove one that was six years old....loved it even in spite of its age LOL.

But, as far as the cost of producing vehicles, that's generally a non-debatable issue...most of the time, on most vehicles, more standard or optional features means higher cost of production, though some companies try and offset that by cutting costs in other areas, like sheet-metal thickness, the quality of materials used inside, and finding low-cost labor in Third-World countries.

MattyG

If Lexus is trying to invite millenials into the fold, it will have to do so on the more inexpensive models. Despite what people think, this generation does not have as much disposable income as its baby boomer counterparts did at the same age. Boomers had more in their 20s vs what millenials have today, and the amount of debt that's accumulated for a college education is quite high, compared to previous generations.

Sure you can be richy-rich and have your parents hand it to you on a platinum platter, but that's not typical of what the reality is. So millenials look for inexpensive (not cheap) vehicles and of course use other alternatives to buying a car outright.

mmarshall

Exactly. People can think whatever they want, but economic facts are facts. Younger people, most of the time, means less income.

jadu

iTrader: (42)

I'm sure the guys at Lexus are smart and well aware that millennials do not have as much disposable income as generation X nor the baby boomers.

I think the question we need to ask is why they're marketing towards them?

they did indeed do a lot of ads with the entry level IS (the lit LED IS, cardboard IS, sriracha IS, the flooding apartment IS). The ads/publicity stunts are (I hate to say it) memorable and I think they wanted to give the brand a more youthful appearance and a leave a want/desire for a Lexus vehicle they cant afford at this moment but possibly later down the line when they are ready for it financially.

mmarshall

What the industry is really doing is marketing to the automotive press, not the millennials. Though only a tiny (niche) percentage of the actual new-vehicle buyers, they have a tremendous influence on the design and marketing of new vehicles...far outside of their actual numbers. They are the main reason why today's new vehicles are (mostly) sport-oriented.

peteharvey

On further thought, I no longer believe President Akio can just target young Millennials.
I believe that he must target as wide a market, and as wide an age group as he can.
Because if he just targets young Millennials only, he will lose the large remainder of the market.

He must also remember that different age groups prefer different designs.
The young usually have more radical tastes, slimmer waistlines, little family, not much money, prefer speed, and whose body can cope with discomfort.
As the age group rises, tastes become more conservative, waistlines becomes larger, family sizes become larger, there is more disposable income, the older person has grown out of speed, and there is less physical tolerance to discomfort.

Thus, to cater for all age groups, or for as wide an age group as possible, President Akio must produce a number of different models to satisfy the tastes of each age group, keeping in mind that as the age group increases, the motor vehicle becomes more expensive, more conservatively styled, larger, and more comfortable.

This is why presently, I am a little concerned about President Akio's approach of trying to get the whole market to use young sporty niches...

MattyG

^^^ With Lexus it's about aspirations rather than reality. Most millenials obviously cannot even think about Lexus. They can think about Toyota and there are options beyond that including Hyundai/Kia (which occasionally gets bashed as being cheap by some posters). The simple reality is that there is obvious wealth transfer that goes on from generations. Baby boomers transfer their wealth to the X-ers, and that generation will transfer down to Y.

Problem is that, people are not participating in the new economy at higher rates. So as a car manufacturer you've got a problem. Two seperate polar groups. The Boomers and the Millenials. Boomers are rich, have the benefit of decades of incomes, while Millenials struggle. So the only safety net is wealth transfer.

None of that has anything to do with selling Lexus ES or RX to younger people. But it seems to be some sort of idea about getting edgy to appeal to an image. It's about image and marketing to tell everybody: "we're not boring anymore". Now you have to think, the Camry was never boring, it was just a good car, but that's not what Gen Y or Z will think, unless you go all edgy to reshape opinions.

oldcajun

I think Lexus lost its way back around 2005. The early LS400 was actually a better car in many ways than the large Mercedes at the time. The motto "The Relentless Pursuit of Perfection" actually meant something. The LS460 when it was introduced had many problems that were unheard of on the earlier cars. Engine issues with valves, suspension issues with control arm bushings, wind noise, etc. Typical problems with a brand new design for many brands, but this was Lexus. What happened to perfection? Where was the car you could balance champagne glasses on the hood with the engine running? Today's cars are pretty good but they are no longer "special". Why isn't the LS500 better than the S class? Lexus should be a car you aspire to: "someday, when I have it made, I'll drive a Lexus!"

Fizzboy7

Cadillac is lost and failing because they are stuck in the past with retro styling. If they want to lower the age of their buyers, it cannot be done with styling from the 70's. Thin, vertical taillights, eggcrate grilles, and boxy, square lines do not resonate with the hip crowd. They only resonate with passed-the-expiration-date GM executives who dearly love the brand and have been with the brand for fourty years. The brand has completely missed the boat and does not have corporate direction where it needs to be.
Lexus is selling cars and showing some very good numbers, so I'd say whatever they are doing is working. I'm not a fan of the vacuum cleaner snoots, but I'd be a customer based on reliability, refinement, and amazing dealer service. Perhaps Lexus would sell even more cars with some more conservative front clips, plus the reliability, plus the refinement, plus the dealer service. I look at what Audi is doing as the benchmark. They have toned down the gaping grille, and given the front, side, and rear very clean, but modern styling. Audi sales are record-breaking last I heard. Having the same styling formula for Lexus, plus the given reliability would be the best scenario all around.

Johnhav430

Honestly, I think GM is outdated in thinking. Those SUVs that you see at the soccer fields are easily 65k+, some are in the 80's and even 90's. imho the service is horrible, like going back to the 1970's, in the quality, in the treatment of the customer, in the facility, all around. One could buy a BMW X1, and yes it would be way too small, or a 2 series, whatever the cheapest car is, and be treated like a king with respect to sales and service, compared to GM. And yes, I know this from ownership that I like to keep on the down low lol (we don't always advertise our mistakes). I've only purchased 3 new cars in my lifetime, for the Nissan and the BMW, the salesperson called the next day to ask how everything was. GM? Never heard from him again, until we got a call about trading in our 1 y.o. car for a new one. Poor.

Now with Lexus, I only had 2 appointments at 2 dealers for low $ services ($59 brake flush, $129 coolant drain/fill), and I do question their competence, however, the customer service was top notch. At one of the dealerships, the SAs had their own offices (never seen that b4), and one man was holding hands with his SA, and introducing her to his mom? lol

geko29

Fair enough. So we're at $525, not too far off from the $600 you quoted.

I never said LS--and in fact I'm not aware that the LS460 was available brand new for $50k in 2007. Just reliable 10-year old Lexus. Yes it's above 120k miles, but you said reliable, and a 120-200k Toyota/Lexus is about on par, reliability-wise with a 60k American car from the 1960s. But if mileage is a top concern, there's actually a 2010 Accord EX-L V6 with every option and 60k miles for sale (Private Party) in my neighborhood right now for $8500.

Again, you just said reliable car, you never specified that it had to be a V8 muscle car. And as I noted above, mileage is nowhere near the death sentence it used to be. a 1968 domestic with 64k is 2/3 through its typical useful life. A 2005 with 100k is maybe halfway.

Toys4RJill

Vladi

Well "edgy styling" did put Cadillac back on the map with CTS. Before that they were just rebadged Opels. Unfortunately due to lack of R&D Cadillac couldn't sustain the return hype and rise above it so somewhere in previous generation CTS they just folded and from a worldwide brand went back to being US only brand once again. I knew something like that was going to happen when I drove XLR. They rushed into making SL competitor so they could interpret themselves as luxury brand but they didn't have the finesse nor technology. I remember interior squeaking all over the place with Pontiac like build quality. Most importantly they didn't know why Mercedes or Lexus did what they did so they just copied screw by screw and came up very short.

Lexus is in similar position right now, not quite the same but it does have some similarities. That is all induced by Toyota sitting on their back and counting cash, milking it. You milked one engine for over a decade and you end up skipping the whole trend and coming to the party very late with half-product (turbo 4). It might have worked for Toyota but it did affect Lexus a lot. Lexus really needs to be separate entity from Toyota, it needs to be run by emotion of people who understand premium, refinement, luxury and hedonism. Toyota should just be there to pump the cash into it. If Lexus was run like that there would be no question whether they want to build RC Convertible instead or RX-L or vice versa, they would build both.

Toys4RJill

Why do you have to be so negative? Lexus does have some nice stuff. Difference between Lexus and Cadillac is the ES350, Lexus has a bread and butter FWD car for the everyday man in the US. This is what Cadillac needs, forget the slow selling LaCrosse and build a Cadillac version.

Buick has went this route. It has worked out well for them.