salimshah

G Man:

Don't forget that some decisions are based on a time window and the need at times ends up costing more.

Vehicles are more than machines to serve people. If they were simply a mode of transportation and we did the right financial decision, no one would buy a new car let alone a new model and maybe not even a Lexus.

Salim

CDNROCKIES

I see you have found kalvano.

Hmmm...seems that after questioning me in the other thread, that you admit here that it will take until at least the end of the year for '10 RX pricing to get to near invoice. That seems to be a long time away.

Where are the facts to back up your statements about why a person would buy a new car or issues with first year model Lexus'?

Did you consider that some people might need a new vehicle right now? What about those people that are coming out of leases and need a replacement vehicle? The depreciation on an '09 will be brutal as it is in all last model year vehicles. The '10 has more to offer, why wouldn't you get it?

And where are your stats to support the new '10 RX having more problems? I picked up an IS F last summer and was, of course, very worried about a first year, first attempt super sedan. (My father has lived the nightmare of a first year BMW). Guess what? No major problems and if you search the F forum here, you won't find any major or recurring issues. Nothing like the tranny issues on the M3 or the rear end issues on the C63. Amazing for their first effort in a segment they never competed in before.

Why will the '10 RX be so much worse?

The G Man

One year to get down to invoice picing is actually pretty bad for a 1st year re-design. Similar SUV such as the 01 MDX took about 4 years to get down to invoice pricing.

CDNROCKIES

We'll see. Lexus traditionally has not been very aggressive with pricing or incentives. The uncertainty of the current economy may force them to take a different approach.

If the economy is showing signs of recovery by Q3 or Q4 this year, Lexus will likely hold off on lowering their prices. This is the kind of economic speculation and forecasting that even experts have been failing at.

Your MDX comparison doesn't really work. By the time pricing came down (which was during an economic upswing) it was an old version, with a new one in the works. Kinda the same as the '09 RX...just the current pricing was/is compounded by the struggling economy.

We're both entitled to our opinion but I wouldn't hold my breath on invoicing pricing for the new RX any time soon. Keep in mind, it is the number one selling vehicle in it's segment.

The G Man

You are right Salim, if you need a car right away, you have lost your bargaing chip.

The G Man

I agree that Lexus probably will not take a different approach as far as aggressive pricing or incentives. Lexus is a very flexible company, with a large amount of temp. work force and their factories are very flexible. They also have a very large market outside of US which help help them thru the tough times.

I believe we can compare the 01 MDX with the RX330. The RX330 sold at MSRP maybe for the 1 st year or a year and a half, compare to the MDX which had a much longer run.

The RX is the number one selling entry level SUV, but with the new price increase, it doesnt fit into that catagory anymore. The other factor is that even demand is high for the new RX, Lexus makes too many RX. In 6 months, the dealer will have a pretty good stock on their lot and will start to give discounts. Remember, everyday a new car sits in the dealer's lot, it money out of their pocket.

salimshah

^^ the business model of dealers is quite different ... they do not buy the vehicle from manufacturer to sell it to end user. So a vehicle sitting on their lot is not costing them that much. For sure the dealer makes money on every sale, so they are motivated to sell.

The loss if any is the profit they want to make to cover more than their overhead.

Salim

itrcb4

The US 2010 RX350 will be less than the 2009, and yet here in Canada we are paying for a price increase?

Am I missing something obvious or what gives? Are we being mocked here north of the border just because our economy is very slightly better than how it is right now in the U.S. ???

The G Man

Dealer can either buy or finance the car from the manufacturuer. Most of the dealer finance them. I believe there is a period like 30 days or 90 days that the manufacturer doesnt charge the dealer interest. If a new car sits on the dealer's lot longer than that, the dealer is losing money.

salimshah

Correct Gman, now if the dealer is selling things based on wait list then they have no incentive to lower their profit. The whole setup is not simple as there are volume based incentives and Toyota/Lexus also works on allocation (so each dealer may only like to prefer selling premium models)

Back to the point in question ... the dealers will deal based on what the buyers are going to do. If all buyers decide to wait it out for a better deal, the dealers may drop prices. Historically it takes some months.

Salim