Should Lexus Have a Vehicle Subscription Service?

I would be very tempted by this, to be honest. I already lease my cars, so it's not like I own them anyway. It would be great to swap from IS to GS to NX to RX depending on what I need to do.

This sounds interesing considering I only keep my lease 18 months or so.. Hopefully it works out.

I believe this started with Cadillac right? It would essentially be a car rental company with a guaranteed customer base. Im sure car rental companies would LOVE subscribers.

It would totally make sense as its a industry disruption move, something that T-Mobile would launch against Verizon and AT&T for more market share.

Its hip to the new "sharing economy" as well as provides even more options to luxury buyers.


Lexus SHOULD do this, more options = better.

I don't think there's harm in offering this type of service, especially when most Lexuses sold are a certain combination of packages anyway. However, thorough research will have to be done in order to find where it would be profitable for this type of service to be implemented.

I know that at dealers not in large metropolitan areas, a large percentage of people purchase their Lexus rather than lease. This topic has been discussed on the forum before, where Lexus has a higher percentage of finance purchases rather than leases when compared to their German rivals. What then, does a dealer do with a car that someone can return at any point and there isn't someone waiting to take it? Does it get used in the loaner fleet? It can't sit around and not make money.

An interesting idea would be to pay a monthly fee to have access to any vehicles in the loaner fleet. Use it when you need it, return it when you don't. Most dealers have popular products like RX, NX, ES, & GX in the fleet anyways.

Lexus should make this a priority, I lease two cars and not only would this be saving for me and may others , added with reliability and a lowest payment possible for the customers. It would equal more repeat customers and $$ in the bank .

Sounds very appealing since we lease only ... It would be interesting to see how the costs compare.

GTG

Lexus should make this a priority, I lease two cars and not only would this be saving for me and may others , added with reliability and a lowest payment possible for the customers. It would equal more repeat customers and $$ in the bank .

RAL

Sounds very appealing since we lease only ... It would be interesting to see how the costs compare.

Well, I would seriously consider it if this would match or be cheaper than my lease payment with insurance and maintenance costs. However, I don't see it as being cheaper. Cadillac charges $1800 per month for access to one car at any one time among the predetermined fleet. I was paying that amount in Cdn $ for both the IS + RX leases with all taxes, insurance/maintenance combined. Of course, if you're paying that amount for a single loaded LS/LC/LX then it may make sense since you get the variety of (lesser) Lexus vehicles, but not for me when I have (and need) two cars.

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The other negative for me personally is not feeling that the car is mine. Even though I lease some of my Lexus vehicles for a relatively short time (~2 years), I still treat and customize them (wheels, rims, tints, drop) like they're mine.

Still open to the possibility though...

I agree man . The price that you quoted $1800 is a lot for one car .Volvo has there's for $600 hundred for the base XC 40 and $700 hundred for the R Design . If Lexus can do better on the price ( 400 ) to (500) for NX , IS , and UX this would work as well as make a subscription that allows the leaser to buy the car for less . This new subscription thing that everyone is doing won't pick up if the price is not less . The prices for Porsche,Cadillac and Mercedes are too high .

Yes Lexus should do that, because others do, even if I dislike this concept, because it makes no logical sense if one can change cars from a single brand that has the same cars. Lexus should also this program to get a Toyota. What is you need a Tundra for a while?


I personally hate this concept for many reasons.

1. It is a "consumerist" concept, where the buyer always looses. Pay, you have, stop paying you have nothing. Change all the time and get the latest, even if it is not the best. Who needs a solid and reliable product, when you'll change before it breaks or is worthless?

2. If the goal is to have a vehicle at disposal for each situation (i.e. a pick up truck for the boat you tow that day, a limousine for the day you drive your clients, a sports car for track day or mountain road trip, etc.), then the products are really bad in almost all cases, because they are all redundant and offer very little diversity. A sports that is not a single car, does not need to compromise on comfort, tech and practicality for example, as is the case with Porsche 911/718. A pickup does not need limousine luxury carpeting and leather dash if it is used for "dirty" stuff, and so on. But what single brand has a car for each purpose? Except Mercedes (and who knows how their program works: can you get an AMG GT or AMG GT4 and a Sprinter?), no other, unless you consider TMC one. Volvo has 3 SUVs and 2 sedans/wagon. I see no benefit in being able to change between any of them.

Lexus has 2 coupes, 3 sedans, and 4 SUVs/CUVs. Basically a sport(y /-s)car, a daily car and a utility car. If the ideal garage is 3 cars, tt is better, easier and cheaper to take the best car of each car category cross-shopping all brands. The most used car on a daily basis is the most important one, and the one that will change more often because of use. Why change the other ones if they work fine?


Such programs, for consumers (not professionals) are money grab and only benefit the company (if it works). The customer always loses.

Your right but if Lexus crosses brands with Toyota that would help choices and cost . Plus car insurances will have greater losses and even have to merge with car companies to serve. The car companies don’t want to have a problem like 2008 anymore . Turning there businesses in to a stand alone, and not depending on other factors,by taking over other assets . All of the brands will do this but who does it the cheapest and with more reliability will win .

In a word, yes. If Lexus doesn't roll it out at the OEM level, individual dealers and dealer groups will. It's inevitable.

corradoMR2

Cadillac charges $1800 per month for access to one car at any one time among the predetermined fleet.

$1800 per month is brutal for one vehicle, but the Cadillac line-up is rather limited and must cover all models. Lexus could break up their offering in two ranges: Standard & Executive. Standard could be ES & RX on down, and Executive could be all the L-models.

Levi

1. It is a "consumerist" concept, where the buyer always looses. Pay, you have, stop paying you have nothing. Change all the time and get the latest, even if it is not the best. Who needs a solid and reliable product, when you'll change before it breaks or is worthless?

Such programs, for consumers (not professionals) are money grab and only benefit the company (if it works). The customer always loses.

I don't see how it's much different than leasing, except maybe an additional cost for the flexibility. Sure wish I could swap my IS with an NX every few months depending.

GTG

I agree man . The price that you quoted $1800 is a lot for one car .Volvo has there's for $600 hundred for the base XC 40 and $700 hundred for the R Design . If Lexus can do better on the price ( 400 ) to (500) for NX , IS , and UX this would work as well as make a subscription that allows the leaser to buy the car for less . This new subscription thing that everyone is doing won't pick up if the price is not less . The prices for Porsche,Cadillac and Mercedes are too high .

Why in the world would Lexus offer more expensive NX for less money per month than cheaper and smaller XC40?

Everyone needs to understand that this is an value added service from manufacturers, where they want to make more money, not less. So it is never going to be cheaper, but it might be simpler and let you switch cars easily.

spwolf

Why in the world would Lexus offer more expensive NX for less money per month than cheaper and smaller XC40?

Everyone needs to understand that this is an value added service from manufacturers, where they want to make more money, not less. So it is never going to be cheaper, but it might be simpler and let you switch cars easily.

Exactly. But "value added services" are usually marketed as "money saving advantage". Uber type car service is sold as cheaper than owning a car, when it is not true, because it depends on many factors. Have you seen a car ad with sale price, rather than monthly lease rate?

I don't have sales statistics, but when I worked for a car bank product strategy, the data I had was worthless. Quite surprising for big data and big brother surveillance to be so useless and incomplete.

This is only loosely related to the subject of this thread, but a couple of days ago Toyota Japan announced a new Premium Class car rental service offering Lexus models. Here's the introduction of the official news release:

March 22, 2018
Toyota Introduces Premium Class in Car Rental Line of Business

Toyota Motor Corporation (Toyota) announces the introduction of a new Premium Class car rental service offering Lexus models with an expected commencement of service on April 2 at Toyota Rent a Car locations in Japan.*1

With the motor vehicle industry in a once-in-a-century transformational period, customer needs are extending beyond conventional vehicle ownership and into shared utilization. The number of operating vehicles in the total car rental market in Japan has grown rapidly from roughly 610,000 at the end of 2013 to approximately 800,000 by the end of 2017. Of these, the number of premium models (luxury vehicles) in operation has also increased at a rate surpassing that of market growth, from roughly 5,000 at the end of 2013 to approximately 9,000 by the end of 2017.

The new Premium Class has been introduced in response to such needs. In addition, the service was created for the expansion of opportunities for customers to experience the appeal of the Lexus brand through car rental.

The main models to be made available to customers to adapt to various user lifestyles include: LS, GS, and IS sedans; CT hatchback; and RX and NX SUV models.*2 In addition, models will be made available for rental according to two price ranges, namely, for the latest model (current generation) and for the model before the redesign (previous generation), to satisfy a broad range of customer needs.

Service will commence from Tokyo, as well as select regions*1, and will be expanded gradually nationwide.

Toyota Motor Corporation and Toyota Rent a Car locations offer the freedom and pleasure of mobility through a rental car service that is "safe, secure, comfortable, convenient, simple, and swift" with Toyota Rent a Car's extensive model lineup, its fleet of approximately 130,000 cars*3, and its network of roughly 1,200 locations nationwide*3 serving as the foundation.

*1 Service is expected to commence at select locations in 14 prefectures starting April 2. Further details will be made available on the Premium Class page of the Toyota Rent a Car website.

*2 Available models may vary by shop.

*3 As of August 2017

Pricing charts (in Japanese yen, of course) and additional information are best viewed on the original News Release

Joaquin Ruhi

This is only loosely related to the subject of this thread, but a couple of days ago Toyota Japan announced a new Premium Class car rental service offering Lexus models. Here's the introduction of the official news release:



Pricing charts (in Japanese yen, of course) and additional information are best viewed on the original News Release

Interesting post!

Some rough math in USD:

CT: $3oo /day
RX: $4oo /day
LS: $600 / day

From a N.AM perspective, this pricing conversion is insane - the cost to rent an LS is comparable to renting an exotic car for the day. It gets worse if you rent per hour.

It really makes a ton of sense.....

It seems that "Lexus by Subscription" will be with us sooner rather than later. The Lexus USA Newsroom press release for the North American debut of the UX line contains this passage:

A New Way To Access a Lexus
When the UX goes on sale in December of 2018, there will be a new option in addition to the usual purchase and lease processes. For the first time in the history of Lexus, the UX will be offered through a subscription service. Details will be announced closer to the UX on-sale date.

Lexus USA to Launch Vehicle Subscription Service

The UX is confirmed to be one of the first models available.

View the original article post

A Bloomberg story states that a Nashville, TN-area BMW dealer plans a pilot launch of the carmaker's Access by BMW vehicle subscription initiative this coming Monday 2 April, with more details to come.

This is already pretty common in other markets. In Italy for example the percentage of people or companies that rent their car for 24, 36 or 48 months is increasing faster than normal sales. Basically all companies offer this service, either directly or through long term rental companies.
I'm renting mine. Instead of buying my over $90.000 car, it's costing me around $700 a month (after tax returns) including road tax, full insurance, maintenance, tyres and a premium service. If I'm keeping the car for 3 years (which is the scheme I preferred, but I can change this along the way if I want to upgrade to a bigger or newer one, of course this costs extra), so in the end it has cost me $25.200 for those 3 years, while the depreciation of the car alone would be more than that. It's a win win for both the consumer and the seller not only because you'll change cars more often, this scheme invites people to rent more expensive cars than they would have bought, so the seller gets a higher pay out than he would have had selling a smaller car and he can earn money on the same car again when selling it after only 2, 3, or 4 years.

S10

This is already pretty common in other markets. In Italy for example the percentage of people or companies that rent their car for 24, 36 or 48 months is increasing faster than normal sales. Basically all companies offer this service, either directly or through long term rental companies.
I'm renting mine. Instead of buying my over $90.000 car, it's costing me around $700 a month (after tax returns) including road tax, full insurance, maintenance, tyres and a premium service. If I'm keeping the car for 3 years (which is the scheme I preferred, but I can change this along the way if I want to upgrade to a bigger or newer one, of course this costs extra), so in the end it has cost me $25.200 for those 3 years, while the depreciation of the car alone would be more than that. It's a win win for both the consumer and the seller not only because you'll change cars more often, this scheme invites people to rent more expensive cars than they would have bought, so the seller gets a higher pay out than he would have had selling a smaller car and he can earn money on the same car again when selling it after only 2, 3, or 4 years.

This trend might indicate people get poorer, but still want to profit from the latest. Also probably because people do not rely on the longevity of new products and also do not want to get left behind if their car is banned from cities of BEVs take over. It could also indicate people live in the present moment (short-term) and do not think about the future and what consequences it might have on their life, they are therefore not prepared for any hardships, should they occur.

Furthermore it indicates people are ready to pay their whole life for a service, they can't afford, rather than save or take debt for a certain time, because they consider the current economy unstable.

Levi

This trend might indicate people get poorer, but still want to profit from the latest. Also probably because people do not rely on the longevity of new products and also do not want to get left behind if their car is banned from cities of BEVs take over. It could also indicate people live in the present moment (short-term) and do not think about the future and what consequences it might have on their life, they are therefore not prepared for any hardships, should they occur.

Furthermore it indicates people are ready to pay their whole life for a service, they can't afford, rather than save or take debt for a certain time, because they consider the current economy unstable.

Europe thing is a company tax thing, car for hire, etc, it has nothing to do with cars being banned from cities... plus in big markets, there is a surplus of vehicles so they are giving big discounts via these deals. It does depend on the market, in some it is major way to buy car (like UK) for quite a while.

I think it's smart for Lexus to start off this service "small" with only one model and implicitly run it as a proof of concept and expand later on depending on the success.

Being the first model as the UX means the subscription cost won't scare people away from the price though my expectations are to see a small premium over a comparable lease.

I expect in Canada to pay ~$600/mth tax in, $0 down on a 48 mth lease, for a top trim F Sport. I'd consider it if the subscription would be up to $700-$750.

It’s here !! Hip hip hooray!! Now in two or three years, it along with the rest will kill car rentals and merge insurance companies ,but it will be a move to stay current in the car market and keep customers. I think that this coming to Lexus will keep all ,even me , who lease multiple cars . Price low UX 350 to 400 please ! That would be the best start coming out the gate for Lexus. Merry Christmas to New UX OWNERS !

GTG

It’s here !! Hip hip hooray!! Now in two or three years, it along with the rest will kill car rentals and merge insurance companies ,but it will be a move to stay current in the car market and keep customers. I think that this coming to Lexus will keep all ,even me , who lease multiple cars . Price low UX 350 to 400 please ! That would be the best start coming out the gate for Lexus. Merry Christmas to New UX OWNERS !

$350-400 USD? Seems a bit optimistic, especially if it includes insurance (still tbd from Lexus), but I wouldn't turn that down :). I doubt it will mess too much with the insurance industry model. It may bolster the few that end up as partners in these kinds of arrangements, however. If you look at the model Volvo is adopting, the insurance is essentially outsourced to Liberty Mutual for a flat rate that's included in the monthly price. You also have to qualify for it, which makes perfect sense, since you can't offer the same flat rate insurance to someone who has a terrible driving record, credit, and whatever else they might use to determine a normal rate. I expect the "car subscription" idea to have quite a few variations/tweaks over the next few years, assuming that it sticks around.

I believe that 350 to 400 would be the right area Lexus would need to be with this subscription. If it was 500 max, then okay . The Volvo XC 40 is a bigger vehicle than the UX . Thats why my variation is lower than 600 to 700 which is the cost of the XC40 . At the time the UX comes out , it will be a top seller because of December. You are right there will be more changes to come to the subscription service or services. The December to remember sale will also come with incentives. XC40 subscription service has zero down , if Lexus adopted this with a lower price , there winning. I live in New York City and more for less is big here especially when the price for something is less than 500 then it really becomes affordable here, plus it would fit anywhere you park it . 11 million people live in this city and about 6 million have a license just in the city . Every thing cost more here , so a flat and low free , oh fee, that Newyorkers or any other major city can get with out paying an arm and a leg in insurance would be great . I have seen some people’s car insurance here and it is out of this world .

corradoMR2

I expect in Canada to pay ~$600/mth tax in, $0 down on a 48 mth lease, for a top trim F Sport. I'd consider it if the subscription would be up to $700-$750.

Those prices would be in line with what I consider a "reasonable" price in Canada.

(PS. I do not have any insider info. I don't even know if subscriptions are coming to Lexus Canada.)

GTG

It’s here !! Hip hip hooray!! Now in two or three years, it along with the rest will kill car rentals and merge insurance companies ,but it will be a move to stay current in the car market and keep customers. I think that this coming to Lexus will keep all ,even me , who lease multiple cars . Price low UX 350 to 400 please ! That would be the best start coming out the gate for Lexus. Merry Christmas to New UX OWNERS !

No way it kills rentals, on the contrary rentals will quite probably increase and be cheaper. With rentals you can have a nice car for a few days without long-term contract. I doubt manufacturers 'flat rate' will be as easily cancelable -- on a monthly basis after first month with addition charges -- as Netflix or Spotify.

Levi

This trend might indicate people get poorer, but still want to profit from the latest. Also probably because people do not rely on the longevity of new products and also do not want to get left behind if their car is banned from cities of BEVs take over. It could also indicate people live in the present moment (short-term) and do not think about the future and what consequences it might have on their life, they are therefore not prepared for any hardships, should they occur.

Furthermore it indicates people are ready to pay their whole life for a service, they can't afford, rather than save or take debt for a certain time, because they consider the current economy unstable.

I think it indicates a shift from owning a product to paying for a service. The car industry is becoming more and more a service industry, This is only one of the steps in that direction. Car sharing, autonomous driving are other steps in the same direction.