Lexus USA chief Mark Templin defends LFA pricing (plus other Lexus future bits)
12-04-09, 11:32 AM
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Lexus USA chief Mark Templin defends LFA pricing (plus other Lexus future bits)
WardsAuto.com's Christie Schweinsberg is probably among the automotive journalists most informed about Lexus/Toyota/Scion goings-on. Unfortunately, most of her articles are relegated to subscriber-only status, giving us mere peons merely a story title and a single teaser introductory sentence to go on.
Occasionally, though, her articles will appear in their full version on their website, and this is certainly a pretty informative one:
LFA Pricing Reasonable, Lexus’ Templin Says
SAN DIEGO – While many were taken aback by the $400,000 starting price for Toyota Motor Corp.’s new 522-hp Lexus LFA supercar, compared with the competition, “it really is value pricing,” a high-ranking U.S. executive says.
“If you think of the other carbon-fiber supercars, Enzo Ferraris and Porsche Carrera GTs, you’re talking cars that are at least $450,000 to $1 million,” Mark Templin, Lexus’ U.S. sales chief says, tells Ward’s here. “So we consider (the LFA) to be a pretty good value proposition.”
Lexus had planned to position the LFA a bit lower, with talk initially of a $200,000-$250,000 sticker price.
But, depending on exchange rates, the actual cost will be about double that in the U.S. Toyota has set the price at Ą37.5 million ($432,615 as of Dec. 1).
Lexus kept “coming up with new ideas to make the car even better and better, and when we decided to make it carbon fiber it really took it to a whole new stratosphere,” Templin says in explaining the move up-market.
Output of the LFA, slated for a 2-year, 500-unit run, doesn’t begin until December 2010. But Lexus expects to have every one sold prior to the supercar’s early 2011 sales launch in the U.S.
“We already have something like 150 real-solid prospects who say they want the car” and who have been exposed to it, Templin says. He says many are not Lexus customers, but owners of other exotics, either collectors looking to add to their bounty or people who own just one supercar and want to trade up to a new model.
Next year, Lexus will be picking the “lucky few” who will be able to lease an LFA, and its team of specialists will begin working with the future owners to customize their vehicles. Only 150 of the 500 LFAs will be available in the U.S.
“There’s 30 colors and eight different surfaces inside you can customize,” Templin says of the extreme personalization possible with the vehicle.
Lexus reportedly will lease the car for a 2-year period in the U.S. and Canada, then allow buyers to purchase the vehicle at the end of their lease. The tactic is being implemented to keep speculators from buying an LFA and flipping it quickly at an inflated price.
Lexus also is trying to control demand for the car, hence its limited run.
“We watched some other manufacturers make the mistake of building too many, and it really hurt the value of their cars in the marketplace,” Templin says.
While some of the technology in the LFA will work its way down into other Lexus models, the brand doesn’t have a strategy to introduce ultra pricey, special-edition performance models.
“We don’t want to be something different than we’ve been for the last 20 years,” Templin says. “We still have a huge core group of people who love our products and what they provide. That’s a bigger market than the small niche of people who want the performance cars.”
Rather, he sees the LFA, and other low-volume models such as the IS-F sport sedan and new LS Sport grade, boosting the brand’s performance credentials.
Looking to 2010, Templin believes the luxury segment will regain share to about 12% of the light-vehicle market. Currently, the sector accounts for 11.5% of industry sales, Ward’s data shows.
He expects Lexus to close out 2009 with about 210,000 units sold, down from 260,087 in 2008.
Meanwhile, Templin says Lexus continues to study a small premium car and cross/utility vehicle for the U.S.
The LF-Ch compact hybrid concept, unveiled in September in Frankfurt, will travel the U.S. auto show circuit (beginning this week in Los Angeles) to gauge consumer reaction. In addition, Lexus is featuring the model on its website, where it also is seeking feedback.
A trend toward smaller cars points to a strong possibility the LF-Ch will make it to production.
“We’re excited about the opportunity,” Templin says. “We just want to make sure consumer perception is our reality.”
As for a smaller CUV to compete with BMW’s X3 and Infiniti’s EX, he notes the volume of the entire segment doesn’t equal that of the Lexus RX midsize CUV.
“There is a trend that shows us eventually there will be a market for those smaller (CUVs),” Templin says. “(But) at what point do you enter the market: when it’s early and you can’t sell any volume or do you wait?”
Ward’s data shows Lexus sold 81,564 RXs through November, making it the 12th best-selling light truck of 2009.
The best-selling small luxury CUV, the Mercedes-Benz GLK, racked up sales of 19,572 units through November.
http://wardsauto.com/ar/lfa_pricing_reasonable_091204/
Occasionally, though, her articles will appear in their full version on their website, and this is certainly a pretty informative one:
LFA Pricing Reasonable, Lexus’ Templin Says
SAN DIEGO – While many were taken aback by the $400,000 starting price for Toyota Motor Corp.’s new 522-hp Lexus LFA supercar, compared with the competition, “it really is value pricing,” a high-ranking U.S. executive says.
“If you think of the other carbon-fiber supercars, Enzo Ferraris and Porsche Carrera GTs, you’re talking cars that are at least $450,000 to $1 million,” Mark Templin, Lexus’ U.S. sales chief says, tells Ward’s here. “So we consider (the LFA) to be a pretty good value proposition.”
Lexus had planned to position the LFA a bit lower, with talk initially of a $200,000-$250,000 sticker price.
But, depending on exchange rates, the actual cost will be about double that in the U.S. Toyota has set the price at Ą37.5 million ($432,615 as of Dec. 1).
Lexus kept “coming up with new ideas to make the car even better and better, and when we decided to make it carbon fiber it really took it to a whole new stratosphere,” Templin says in explaining the move up-market.
Output of the LFA, slated for a 2-year, 500-unit run, doesn’t begin until December 2010. But Lexus expects to have every one sold prior to the supercar’s early 2011 sales launch in the U.S.
“We already have something like 150 real-solid prospects who say they want the car” and who have been exposed to it, Templin says. He says many are not Lexus customers, but owners of other exotics, either collectors looking to add to their bounty or people who own just one supercar and want to trade up to a new model.
Next year, Lexus will be picking the “lucky few” who will be able to lease an LFA, and its team of specialists will begin working with the future owners to customize their vehicles. Only 150 of the 500 LFAs will be available in the U.S.
“There’s 30 colors and eight different surfaces inside you can customize,” Templin says of the extreme personalization possible with the vehicle.
Lexus reportedly will lease the car for a 2-year period in the U.S. and Canada, then allow buyers to purchase the vehicle at the end of their lease. The tactic is being implemented to keep speculators from buying an LFA and flipping it quickly at an inflated price.
Lexus also is trying to control demand for the car, hence its limited run.
“We watched some other manufacturers make the mistake of building too many, and it really hurt the value of their cars in the marketplace,” Templin says.
While some of the technology in the LFA will work its way down into other Lexus models, the brand doesn’t have a strategy to introduce ultra pricey, special-edition performance models.
“We don’t want to be something different than we’ve been for the last 20 years,” Templin says. “We still have a huge core group of people who love our products and what they provide. That’s a bigger market than the small niche of people who want the performance cars.”
Rather, he sees the LFA, and other low-volume models such as the IS-F sport sedan and new LS Sport grade, boosting the brand’s performance credentials.
Looking to 2010, Templin believes the luxury segment will regain share to about 12% of the light-vehicle market. Currently, the sector accounts for 11.5% of industry sales, Ward’s data shows.
He expects Lexus to close out 2009 with about 210,000 units sold, down from 260,087 in 2008.
Meanwhile, Templin says Lexus continues to study a small premium car and cross/utility vehicle for the U.S.
The LF-Ch compact hybrid concept, unveiled in September in Frankfurt, will travel the U.S. auto show circuit (beginning this week in Los Angeles) to gauge consumer reaction. In addition, Lexus is featuring the model on its website, where it also is seeking feedback.
A trend toward smaller cars points to a strong possibility the LF-Ch will make it to production.
“We’re excited about the opportunity,” Templin says. “We just want to make sure consumer perception is our reality.”
As for a smaller CUV to compete with BMW’s X3 and Infiniti’s EX, he notes the volume of the entire segment doesn’t equal that of the Lexus RX midsize CUV.
“There is a trend that shows us eventually there will be a market for those smaller (CUVs),” Templin says. “(But) at what point do you enter the market: when it’s early and you can’t sell any volume or do you wait?”
Ward’s data shows Lexus sold 81,564 RXs through November, making it the 12th best-selling light truck of 2009.
The best-selling small luxury CUV, the Mercedes-Benz GLK, racked up sales of 19,572 units through November.
http://wardsauto.com/ar/lfa_pricing_reasonable_091204/
12-04-09, 01:51 PM
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Doesn't sound good...
Does this mean no GS-F/LS-F?
Does this mean no larger than RX JX crossover? (a more glaring omission than a stupid RDX/EX competitor)
Does this mean no GS-F/LS-F?
Does this mean no larger than RX JX crossover? (a more glaring omission than a stupid RDX/EX competitor)
12-04-09, 02:00 PM
#3
Pricing makes sense when compared to the other carbon-fiber supercars. If they sell all 500 units , obviously the car was priced and marketed correctly. What would a monthly lease payment be on this car ?? what's the residual ?
12-04-09, 02:25 PM
#4
Thx for the full article, I only saw the tease earlier. LF-Ch sounds good to go, while a smaller cute-ute looks perhaps best for Europe only. I do think though that given Lexus' success with the RX, they have the potential to expand the cute-ute market if they build a capable model...the GLK sells in large part, IMO, as a mix of its capabilities and the brand image; the RDX and EX are similarly sized and in some ways more capable, but their sales are much less. Lexus has the brand image and SUV success track record to potentially do well here, IMO. A 7-seat crossover larger than the RX is also a possibility, although whether that should replace the GX...who knows.
Regarding: "the brand doesn’t have a strategy to introduce ultra pricey, special-edition performance models...We don’t want to be something different than we’ve been for the last 20 years...We still have a huge core group of people who love our products and what they provide. That’s a bigger market than the small niche of people who want the performance cars...he sees the LFA, and other low-volume models such as the IS-F sport sedan and new LS Sport grade, boosting the brand’s performance credentials."
That can be interpreted one of a number of ways. On one hand, it could emphasize that they are not going to neglect what made Lexus a success--mainstream luxury. They are not going to drop the ES and just sell IS+F variants. The statement still points to the IS-F and LS Sport as image-boosters with low volume production, and premium but not 'ultra pricey' (vs. competitors, or even LFA grade) levels. So it doesn't preclude GS-F or LS-F IMO, although it doesn't suggest them either.
Furthermore, Lexus Global exec Toshio Furitani was quoted last month:
http://www.eyeofdubai.com/v1/news/newsdetail-36624.htm
New derivatives of existing models does sound like more F-models and hybrids.
Regarding: "the brand doesn’t have a strategy to introduce ultra pricey, special-edition performance models...We don’t want to be something different than we’ve been for the last 20 years...We still have a huge core group of people who love our products and what they provide. That’s a bigger market than the small niche of people who want the performance cars...he sees the LFA, and other low-volume models such as the IS-F sport sedan and new LS Sport grade, boosting the brand’s performance credentials."
That can be interpreted one of a number of ways. On one hand, it could emphasize that they are not going to neglect what made Lexus a success--mainstream luxury. They are not going to drop the ES and just sell IS+F variants. The statement still points to the IS-F and LS Sport as image-boosters with low volume production, and premium but not 'ultra pricey' (vs. competitors, or even LFA grade) levels. So it doesn't preclude GS-F or LS-F IMO, although it doesn't suggest them either.
Furthermore, Lexus Global exec Toshio Furitani was quoted last month:
http://www.eyeofdubai.com/v1/news/newsdetail-36624.htm
Mr Furutani concluded: “Lexus has come a long way in 20 years, but the next 10 are even more exciting and important for us. From a product point of view, we will expand our offerings into new segments and introduce exciting new derivatives of existing models, especially aiming to attract young affluent buyers. With every new Lexus, we aim to inject aspects of a more enjoyable or fun to drive feeling as well as more leading edge solutions, like the Lexus Hybrid Drive. Our aim is to be able to rollout new models, but also new technologies, across more markets faster than in the past.
12-04-09, 03:24 PM
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Thanks for the link to the Eye of Dubai article. Definitely an interesting read.
It's true that that passage is subject to interpretation. I think it's mostly reassurance that Lexus' core will remain its soft and comfy non-enthusiast models, but also that there will be niche performance derivatives as well. Frankly, I didn't read it as possible future GS F and LS F models are dead.
It's true that that passage is subject to interpretation. I think it's mostly reassurance that Lexus' core will remain its soft and comfy non-enthusiast models, but also that there will be niche performance derivatives as well. Frankly, I didn't read it as possible future GS F and LS F models are dead.
12-04-09, 03:55 PM
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Thanks, great read. Lexus shared those same "cute ute" thought a few years ago and they are right. It is not even worth entering, hell the Rav-4 is for that. The RX dimensions were that small 10 years ago with the first gen. The fact is no one wants to go head to head with it and when they try, they lose. Can't blame them.
The LF-Ch seems to be a go.
His comments about more "sports cars" are similar to my talks on the SC replacement. "Still undecided where they want to go". They are going to have to make a decision soon.
He is also echoing thoughts of the last chief. Lexus will continue to keep their core customers/market happy and will find ways to expand into different areas. Like encore, I also see this as expanding the F-line/F-sport/sport products.
Lexus is a careful, cautious company as they understand any failure will be a huge black mark (look at Acura/Infiniti and all their discontinued cars). So what enthusiasts might want from Lexus takes longer to appear.
C&D actually got it right calling the LFA an Enzo bargain. They are right. Considering what the car has and its build process it IS a bargain. However Lexus simply does not the exotic image to most people and most people WANT Lexus to fail for whatever reason. I am glad to see Lexus defend its pricing.
As for a lot of vehicles, the SLR never met sales goals, nor the Porsche CGT.... and those cars were sold in an INCREDIBLE economy with more buyers than ever. So 500 LFA's is a good bet.
The LF-Ch seems to be a go.
His comments about more "sports cars" are similar to my talks on the SC replacement. "Still undecided where they want to go". They are going to have to make a decision soon.
He is also echoing thoughts of the last chief. Lexus will continue to keep their core customers/market happy and will find ways to expand into different areas. Like encore, I also see this as expanding the F-line/F-sport/sport products.
Lexus is a careful, cautious company as they understand any failure will be a huge black mark (look at Acura/Infiniti and all their discontinued cars). So what enthusiasts might want from Lexus takes longer to appear.
C&D actually got it right calling the LFA an Enzo bargain. They are right. Considering what the car has and its build process it IS a bargain. However Lexus simply does not the exotic image to most people and most people WANT Lexus to fail for whatever reason. I am glad to see Lexus defend its pricing.
As for a lot of vehicles, the SLR never met sales goals, nor the Porsche CGT.... and those cars were sold in an INCREDIBLE economy with more buyers than ever. So 500 LFA's is a good bet.
12-04-09, 04:46 PM
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Furthermore, Lexus Global exec Toshio Furitani was quoted last month:
http://www.eyeofdubai.com/v1/news/newsdetail-36624.htm
New derivatives of existing models does sound like more F-models and hybrids.
http://www.eyeofdubai.com/v1/news/newsdetail-36624.htm
New derivatives of existing models does sound like more F-models and hybrids.
But who knows since they did say there won't be "ultra pricey, special-edition performance models"
Thanks, great read. Lexus shared those same "cute ute" thought a few years ago and they are right. It is not even worth entering, hell the Rav-4 is for that. The RX dimensions were that small 10 years ago with the first gen. The fact is no one wants to go head to head with it and when they try, they lose. Can't blame them.
But anyway if they do make a sub-RX CUV I hope it's not based on the Rav4. They should differentiate it from the RX by putting it on the IS's platform and going after the Q5 and X3 in the sporting department. Or instead of going in the sport direction maybe they could base it on the HS and have the first dedicated hybrid CUV. Anything other than a baby RX would be a decent idea I suppose. As long as it doesn't eat into Lexus's bread and butter CUV.
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12-04-09, 09:17 PM
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Thank you for the "eye of Dubai" article. You're right that it sounds like more variants of vehicles like coupes convertibles hybrids and "F" models are coming.
But who knows since they did say there won't be "ultra pricey, special-edition performance models"
You're probably right, and that makes sense. Lexus doesn't want to alienate it's core base or buyers so their keeping soft models (ES/RX/LS), and adding niche enthusiast friendly models (IS-F/LFA).
I'm still lukewarm on the idea of a sub-RX CUV. For one that would eat into RX sales (which would probably hurt profits) and thats not a good thing. A larger more expensive sports CUV would be better. High profit margins and an easy 2K sales a month.
But anyway if they do make a sub-RX CUV I hope it's not based on the Rav4. They should differentiate it from the RX by putting it on the IS's platform and going after the Q5 and X3 in the sporting department. Or instead of going in the sport direction maybe they could base it on the HS and have the first dedicated hybrid CUV. Anything other than a baby RX would be a decent idea I suppose. As long as it doesn't eat into Lexus's bread and butter CUV.
But who knows since they did say there won't be "ultra pricey, special-edition performance models"
You're probably right, and that makes sense. Lexus doesn't want to alienate it's core base or buyers so their keeping soft models (ES/RX/LS), and adding niche enthusiast friendly models (IS-F/LFA).
I'm still lukewarm on the idea of a sub-RX CUV. For one that would eat into RX sales (which would probably hurt profits) and thats not a good thing. A larger more expensive sports CUV would be better. High profit margins and an easy 2K sales a month.
But anyway if they do make a sub-RX CUV I hope it's not based on the Rav4. They should differentiate it from the RX by putting it on the IS's platform and going after the Q5 and X3 in the sporting department. Or instead of going in the sport direction maybe they could base it on the HS and have the first dedicated hybrid CUV. Anything other than a baby RX would be a decent idea I suppose. As long as it doesn't eat into Lexus's bread and butter CUV.
12-04-09, 10:05 PM
#10
Well the rumors of an RX 350 L had some traction for a while, and they did make the LF-X concept model, so those are two possible approaches. If the cute-ute market is not so great (although the GLK seems to be doing well for that segment), a larger model would probably be more profitable and could be image-enhancing.
Anyhow, the price of the LFA is what it is, and reminds me of Lexus' move upmarket and its current strategy -- in the neighborhood of European rivals, but somewhat to slightly less in cost. The LFA competes with other CFRP models as such. But having unleashed the engineers to build a cost-no-object supercar, they have left a large pricing gap which could be filled with an SC-F for instance.
Anyhow, the price of the LFA is what it is, and reminds me of Lexus' move upmarket and its current strategy -- in the neighborhood of European rivals, but somewhat to slightly less in cost. The LFA competes with other CFRP models as such. But having unleashed the engineers to build a cost-no-object supercar, they have left a large pricing gap which could be filled with an SC-F for instance.
12-05-09, 01:18 AM
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Well the rumors of an RX 350 L had some traction for a while, and they did make the LF-X concept model, so those are two possible approaches. If the cute-ute market is not so great (although the GLK seems to be doing well for that segment), a larger model would probably be more profitable and could be image-enhancing.
Anyhow, the price of the LFA is what it is, and reminds me of Lexus' move upmarket and its current strategy -- in the neighborhood of European rivals, but somewhat to slightly less in cost. The LFA competes with other CFRP models as such. But having unleashed the engineers to build a cost-no-object supercar, they have left a large pricing gap which could be filled with an SC-F for instance.
Anyhow, the price of the LFA is what it is, and reminds me of Lexus' move upmarket and its current strategy -- in the neighborhood of European rivals, but somewhat to slightly less in cost. The LFA competes with other CFRP models as such. But having unleashed the engineers to build a cost-no-object supercar, they have left a large pricing gap which could be filled with an SC-F for instance.
12-05-09, 10:13 AM
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What's funny with that is the more expensive 3 row sports CUVs outsell their cute ute equivalents (X5 outsells the X3/MDX outsells the RDX/etc), but Lexus would rather enter the cute ute segment...
Lexus already has a concept and a platform so they just need to bring the LF-X concept to market. We even saw spy shots of LF-X mules driving around, 2 years ago, during the same time we saw 2010 RX mules driving around...
fixed.
Well the rumors of an RX 350 L had some traction for a while, and they did make the LF-X concept model, so those are two possible approaches. If the cute-ute market is not so great (although the GLK seems to be doing well for that segment), a larger model would probably be more profitable and could be image-enhancing.
I completely agree with the image-enhancing versus a cute ute.
Anyhow, the price of the LFA is what it is, and reminds me of Lexus' move upmarket and its current strategy -- in the neighborhood of European rivals, but somewhat to slightly less in cost. The LFA competes with other CFRP models as such. But having unleashed the engineers to build a cost-no-object supercar, they have left a large pricing gap which could be filled with an SC-F for instance.
This would be a good time for an SC-F for all of us that love the LFA but can't afford a $400K supercar
12-05-09, 12:42 PM
#14
Yes there are rumors stating that the decision is pending...however other rumors are that the SC line will take a year off and come back with the 3SC...and then there were the softtop rumors.
I was also wondering about its supposed rival, the SL...the SL has been on a 9 year cycle; the 1SC and 2SC have now had 9 years; would the current 'new headlights' SL be a refresh then in its final year(s)...perhaps a new SC would also come out around the same time as the SL. An "F" model would be a year or more out after that, I'm wildly guessing. And the 3SC could take one of a number of forms, with a number of possible competitors...6-series perhaps? Some suggested the 2SC competed with the TT? Anyhow...
Looking at the US Patent and Trademark filings, so far there's been nothing filed except for the CT 200h/300h/400h; the GX 460 was filed years ago, while the HS 250h was only filed this year, so who knows.