Toys4RJill

I disagree. Marketing is super important

SW17LS

We also over emphasize the importance a vehicle has to a consumer. We’re enthusiasts so we know everything about them and do our due diligence. Most consumers aren’t like that, even luxury consumers. They buy what they want and what’s convenient, don’t really look at other cars, tend to buy on brand and buy what they’ve always bought.

The only way to reach those consumers is to make an impression on them through marketing.

coolsaber

LS is on its own platform, TGNA-L and the only other model to share this in the Lexus stable would be the LC; both are low volume and unibody vehicles whose ROI is going to take a long long time since nothing else seems to be in the pipeline.

The idea that a 4Runner or even the Land Cruiser would be similar in cost to build as the LS is quite a stretch of the imagination. I do agree that the 4R, and LC are absolute cash cows (part legacy tooling, part crowd following, and part its BOF where margins tend to be greater).

In regards to marketing, you cant expect a person to buy something if they dont know that your product exists; just look at the commercials from the 90s on the LS, champagne challenge, the multiple TV ads, etc etc. Nowdays I have yet to see social media posts about the LS, or other more effective marketing campaigns that have become the new TV ad.

bitkahuna

iTrader: (20)

doesn't sound right, source?

just looked up the g90 for canada and it's 20-43 a month... https://www.goodcarbadcar.net/genesi...onthly-yearly/

bitkahuna

iTrader: (20)

Ok i looked for LS sales and in Q3 2020 according to this source, just 2 were sold in canada.

https://www.goodcarbadcar.net/2020-c...ures-by-model/

Toys4RJill

If you sell the G90 in enough countries. It starts to make sense why they have it available


Really can’t use pandemic era for any sales comparisons. Goes for all manufacturers and countries

Last year, GX, RC, GS, LC, LX, LS, Mirai, LX and IS combined for about 4000+ units sold in Canada. All Japan origin . Let’s say the average price is $70K factored all things....$283 million in gross sales. Now factor that these models are sold almost in 70 counties around the world. This is big money when calculated all together. Toyota Japan also sells the Land Cruiser 70 in Canada too. I did not include the 4R in there.

Lexus sold something like 800,000 units worldwide in 2019...up 8%. It all adds up.

peteharvey

This is possible, but it is also often the case that these flagships or halo vehicles make a total loss, and end up being subsidized by bread and butter Hyundai Elantras and Sonatas etc - just like a Lexus CL Coupe or 5LS sedan ends up being subsidized by RAV4's, Camries and Corollas.

LexBob2

Deleted....

Toys4RJill

A G90 should have a large Korean domestic sales base. So selling anywhere is just gravy.

a key difference between G90 sales in Canada vs LS...G90 is not priced at more than $90K whereas a LS starts at $104K and goes to $134K. I don’t think Toyota loses money on LC or LS.

Toys4RJill

that was kinda funny where the two LS buyers could meet. Ha

LexBob2

If Lexus is only selling 2 LS per quarter and 17 YTD any loss they might incur is negligible.

Toys4RJill

But....it the grand scheme worldwide...Toyota makes money. If you pack a shipping container destined for Canada with 48 UXs and 2 LS models...what’s the difference? They don’t ship these cars to Canada to sit...likely they are pre sold

How much do you think it really costs to product one LS unit?

I will say, I don’t think there will be a next generation LS.

mmarshall

^^^^ I'll agree that there's some truth to that, but I've also seen too many cases of Buyer's Remorse, where people, without really knowing what they were doing, went out and, impulsively, bought something on the spur of the moment, thinking they are getting something (or not getting something) that was not the case.

I remember a classic example of that, some years ago, when one of my neighbors came home with a new, dark reddish-brown Altima SE. (you might remember that color-option) He complained about it costing more than he had figured (who doesn't LOL?), and that the ride was firmer than he had expected. He wasn't even aware that he had bought an upper-trim line, sport-oriented version. I pointed out the larger alloy wheels, firmer suspension, revised steering gear, non-chrome trim, and asked him if he had looked at the base Altima, or one of the lower-line versions. He said no, he wasn't even aware that there are different trim levels, or that some versions had different wheels/suspensions/underpinnings. I mean, what can you say to that? I was as polite as I could be, wished him luck with it, and dropped the issue.

coolsaber

Developing a new platform, that two with a new engine and transmission is pushing billion dollars according to IHS. So for arguments, sake a low volume high price badge bearing LS is probably not going to be cheap. The idea here is to be a rolling showcase of what the brand is capable of, not really sales volume. The GA-L program probably will never achieve profitability imho, even with global sales into account, and mostly be subsidized by the sales of every other crossover they have in their stable.

Shipping as a cost to a company is such a minor expense due to the volume and possibly due to the fact that Toyota probably owns the shipping line themselves (Toyofuji).

The same story probably applies to Genesis (down to the shipping company since, yet again Hyundai).

The only companies that could achieve profitability in this space are of course the german 3 (of course who knows with their funny math skills).

peteharvey

Yes I agree with you.
It is very difficult for us to determine if the model is profitable or not; only the manufacturer would know, but they don't make that type of data public.
However, most probably these low volume halo vehicles are unprofitable.

This is why Fiat owns Ferrari and Maserati.
GM owned Lotus.
VW AG owns Bentley and Lamborghini.
BMW AG owns Rolls Royce.

Ford owned Jaguar Land Rover, before sold to Indian Tata.
Ford once owned Volvo before it was sold to the Chinese.
GM owned Saab.

TMC owns part of Mazda and Subaru etc.

Because the 5LS sales volume is so low, and because the much higher volume Japanese Domestic Market Toyota Crown sedan will be axed - there is a strong chance that the 6LS sedan will be axed just like Jill is saying.

However, just me, but I do not believe that sedans will be replaced by SUV's.
I believe that ICEV sedans are being phased out by ICEV CUV/SUV tall wagons, however down the track, full BEV sedans will be the first to re-incarnate back onto the market.
I believe that sedans will sell far more than coupes.
.