DealershipsUSA

Negotiation-Free Pricing Works for World’s Largest Lexus Dealership

Lexus JM Lexus Plus

WardsAuto has an update on the Lexus Plus negotiation-free pricing program and how it’s working at JM Lexus, the brand’s largest volume dealership in the USA:

“Anybody that’s bought a car from us, I haven’t heard a discouraging word at this point,” [JM Lexus vice president and general manager Jim] Dunn tells WardsAuto in an interview. “As I tell them why we are doing this and what are the benefits for you, they understand it’s time to really do something different.”

“We see if they’re not going to have to go to five or six different dealerships anymore, and they’re really only shopping one, or up to one-and-a-half stores these days, that the consumer wants something different. And we’re listening.”

Dunn says his fellow Lexus dealers are watching and waiting, but he thinks they will opt for Lexus Plus eventually.

“The guys in my (dealer) group, they know at some point it’s going to be incumbent upon them to do the same thing,” he says.

Lexus USA vice-president of marketing Cooper Ericksen also addresses the issue of non-negotiable pricing in a large market like Southern Florida:

“(Undercutting) has happened, it will happen. But again the real value proposition comes in where ultimately a customer is going to make a decision: Is it worth it for me to go dealer-to-dealer, to call and to email and to text, and to negotiate and spend all the time to go to all these different dealers looking to save a small amount of money?”

He notes every dealer pays the same amount for a vehicle and has the same amount of profit margin, so if Lexus Plus models are pre-negotiated at market-based prices, the gap between what they can be sold for and what a buyer will pay a Lexus Plus store is small.

Meanwhile, Dunn believes JM Lexus’ “world-class service” will trump any small pricing difference between it and other South Florida Lexus dealers.

Comments
M
mmcartalk
Possibly, but price-fixing, as we know it, is usually a collusion by several different manufacturers or companies to agree on set-prices for a shared commodity or product, not necessarily just one manufacturer, company, or dealership.
That's exactly what I meant. I'm not talking about the UAE.

If they adopt haggle free pricing, they can all decide to set the price of the IS-F, for example, to $44,155 as stated on Lexus's website, with no negotiations. Is there anything you can do about it?

mmcartalk
Again, I don't know about the laws there in the UAE, but, in the U.S., some jurisdictions don't allow auto manufacturers to set up and operate their own company-owned retail outlets. Tesla, for example, operates that way in some states (company-owned outlets)....but is having legal trouble in others and facing some lawsuits over the issue.
And that's why Tesla is far more successful and has penetrated the market the way it did.
Mohammed Taha
That's exactly what I meant. I'm not talking about the UAE.

If they adopt haggle free pricing, they can all decide to set the price of the IS-F, for example, to $44,155 as stated on Lexus's website, with no negotiations. Is there anything you can do about it?
Do you mean the F-Sport? A full IS-F model will likely run a lot more than that....probably low 60s.

And that's why Tesla is far more successful and has penetrated the market the way it did.
Perhaps, but a more likely factor is the Tesla's long-range batteries. They are one reason why Teslas cost so much....even with company-owned stores.
M
mmcartalk
Do you mean the F-Sport? A full IS-F model will likely run a lot more than that....probably low 60s.
Yes ... that's what I meant. :)
http://www.bloomberg.com/news/artic...schools-lexus-in-art-of-no-haggle-sales-pitch
The Car Dealer Who Schooled Lexus in Art of the No-Haggle Sale

Buying a Toyota from Brian McCafferty is about as close as you can get to point-and-click shopping on a car lot. He posts his bottom-line price and less than an hour later you’re inhaling that new-car smell.

No-haggle pricing is an unusual strategy in an industry that typically shuns such transparency. By offering fixed prices, McCafferty has turned his Toyota store near Phoenix into an exemplar of customer loyalty, market share gains and profits. Lexus U.S. brand chief Jeff Bracken noticed, invited McCafferty to speak about no-haggle selling at a corporate retreat and then decided to bring the pricing model to Toyota’s luxury brand.

“He’s flourishing in a very competitive market,” Bracken said. “So we know it’s worked.”

Not that Lexus is plunging in. Saturn once had a no-haggling policy, but that didn’t save the brand from withering away inside a cash-strapped, pre-bankruptcy General Motors Co. And while luxury auto sales are booming, Lexus is locked in a dogfight with Mercedes, BMW and Audi. So it plans to start testing fixed pricing at 12 stores next year and see how it goes before asking other dealerships if they’d like to try it.

McCafferty’s unusual approach -- only one other U.S. Toyota dealer offers fixed pricing -- is essentially an acknowledgment that the Web has changed how people shop. When we visit stores now, we expect more. Luxury dealers have adapted by ladling on service. BMW is adding Apple-style genius shopping assistants. Ditto for Audi, which also has expanded service hours. Some Mercedes dealers even have nail salons.

Top Frustration

All that hard-earned goodwill can be erased if a customer feels they’re being overcharged. About 44 percent of consumers don’t want to negotiate over the price of a car, according to a March study from Autotrader. Haggling is their top frustration, yet most car buyers think it’s the only way to get a fair price, so 56 percent are committed to duking it out.

Before opening his Toyota store near Phoenix, McCafferty interviewed about 300 customers to get a sense of their likes and dislikes. Many told him that it took too long finalize a sale and that they didn’t like not knowing how much a car costs, opaqueness they saw as deception.

“They said, ‘I ask you how much a car costs and I don’t get an answer,’” McCafferty said. “The customer perceives that as dishonesty. That was a profound statement and realization. I saw that the sales process was needlessly complicated, in the eyes of the consumer as well as the dealership staff.”

‘Simple Premise’

He started selling Toyotas at fixed prices in Arizona about a decade ago, and did the same after opening a second store five years ago in Oakland, California. Prices are transparent, for customers and for his competition, something dealers have traditionally avoided. Yes, sometimes rival dealers check his website and undercut him, but McCafferty says customers are typically willing to spend more if they can cut out the haggling and get out the door in less than an hour.

“We are just giving the customer what they want,” McCafferty said. “It’s a very simple premise. Why should it be any harder than that?”

Last year, Toyota invited McCafferty to address dealers and executives at a retreat in Jackson Hole, Wyoming. He gave a 90-minute talk to the group, which was exploring the possibility of a no-haggle sales model. The reaction was mixed.

“It ranged from guys saying, ‘This is what I’ve been looking for’ to others getting vocally displeased with me would be a kind way to say it,” McCafferty said.

After much discussion, the 12 dealers there unanimously backed the strategy, according to Lexus chief Bracken.

Persuading all of Lexus’s 236 U.S. dealers to sign on is probably the key to success, says Stu Lasser. He ran a successful Saturn store in New Jersey in the 1990s and decided to try no-haggle pricing at his Infiniti store, too. It didn’t work so well because other dealers undercut him on price.

Lexus “might be able to pull it off,” Lasser said, “if they’re all in sync and they’re dedicated.”
M
Tragic Bronson
http://www.bloomberg.com/news/artic...schools-lexus-in-art-of-no-haggle-sales-pitch
Great article. I think one of the problems you guys suffer from is the options system.

In the UAE, there are around 3 to 4 different trims of the same vehicle with trim 1 being the best; it makes it easier to understand what you're getting. The pricing though, that's hard to swallow.
I bumped up this almost year-old thread to give some feedback on that policy, but the article only describes one specific dealership.

http://www.bloomberg.com/news/artic...ricing-sends-some-buyers-fleeing-as-most-stay

In the seven weeks since his Lexus of Omaha dealership switched to no-haggle pricing, salesman Jim Endebrock has had one customer walk out.

“It was a little disappointing because I had sold him eight cars before this,’’ Endebrock said in an interview at the dealership. “But he considers himself a shrewd negotiator, and he thought he should get something better.’’


’Upfront Pricing’ on a Lexus

Source: Lexus
Still, Endebrock has managed to sell 40 cars since June 1. Those customers, he says, have been delighted with the no-haggle approach, which means the dealership puts its best offer for new and used vehicles on the window sticker and then refuses to entertain counteroffers. Toyota Motor Corp.’s Lexus division is the first luxury brand to launch a factory-sanctioned pilot program for expanding the idea nationwide, according to Erin Kerrigan, founder of Kerrigan Advisors in Irvine, California.


One of Endebrock’s happy customers is Pat Conroy, who returned to the dealership for a service appointment on Wednesday. Conroy, 79, is the retired purchasing director for Valmont Industries Inc., an Omaha company that makes mobile-phone towers and irrigation equipment. He says he hates haggling with car salesmen.

“I’d rather come in and be relaxed, and know what the price is, and not go away wondering if I should have offered $500 less,’’ Conroy said.


Since the earliest days of the U.S. auto industry, customers like Conroy have had no way of knowing the actual price of a car except to make a ridiculously low offer, and then wait for the dealer to respond.

All that changed about 15 years ago, when the internet began offering buyers reams of data -- not just about the dealer’s costs for delivering each car, but also the prices people were paying for similar models across town and around the country. Among other things, that newfound transparency compressed the profit margins dealers can make on new vehicles to just over 3 percent from 5 percent, said Kerrigan.


As profits in the old system evaporate, more and more individual dealers are now successfully turning to no-haggle pricing, she said, including in big cities where their competitors still use the old-fashioned model.

“They’re not by any stretch the norm, but I do think these no-haggle, one-price policies are becoming a trend,’’ Kerrigan said.


Manpower Shift

So far, 11 of the 236 U.S. Lexus dealerships have adopted the no-haggle plan, said Matt Kaleba, the brand’s national marketing manager. In the future, additional dealerships will be able to opt in and receive staff training and consulting services from Lexus.

To encourage recalcitrant dealers, the company’s Lexus Plus program comes with an additional set of incentives. As it helps dealers move toward no-haggle pricing, Lexus also helps them reorganize their operations to offer customers additional amenities, such as a salesman trained to also handle their financing paperwork, and a single point-of-contact representative for all their service requests.

In effect, Lexus Plus shifts manpower away from the finance departments that once presided over price negotiations and served as a major profit center for the dealerships, and moves it into customer service.

The Lexus of Omaha dealership is on the west side of town, a few hundred yards from the famous Boys Town home for at-risk children. Rebuilt in 2014, its main showroom features two-story glass windows on three sides, and a portion of the back wall covered with various shades of climbing ivy.

The dealership is part of Baxter Auto, a family-owned conglomerate of 22 outlets in Omaha and Lincoln, Nebraska; Kansas City, Missouri; and Colorado Springs, Colorado. Those dealerships offer 19 brands, including Lexus, Toyota, Honda, Mercedes, Volkswagen, Ford and Chrysler.



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Mickey Anderson, who owns Baxter with his sister Angie, said he needed four years of preparation to switch to no-haggle pricing. One reason: Salesmen now receive a flat fee for each car sold rather than having their compensation vary depending on the outcome of talks with each customer. Many dealerships, he said, don’t want to embark on that kind of painstaking reorganization at a time when sales and profits are booming.



Cutting Time

The deals that Lexus of Omaha offers today, he said, are basically the same as those customers could achieve after haggling their way through the old system. But he said he hopes they can complete the transaction in less than two hours, or half the time needed for the traditional approach.

During the first full sales month with the no-haggle plan, Anderson sold 1,200 vehicles at Lexus of Omaha, up 9 percent from last year’s monthly pace. He said he hopes to be selling 1,500 a month by 2018.

“I joined the company in 1990,” Anderson said, “and I knew it was wrong then that wives had to bring in their husbands because, ‘Oh, by the way, if you’re not a man you may not be able to get the best deal that could be made.’’’
In Japan the price is the price, dealerships don't even have inventory, you order your car, pay the price and get your car. I can see opportunity for some dealerships to go this route as many people prefer a seamless process.

What is interesting to me is if Lexus dealerships that don't haggle post a price of $45,000 for a say ES and that is the best price; how will competing dealerships respond? Naturally with a lower price.

It's time soon to get rid of our GS F-SPort as the wife wants to get back to a SUV and in talking to a few various brands/dealerships its a #)(()$#)( headache that I don't enjoy. I wish I could just order what I want, pay the price and that is that.
mikeavelli
In Japan the price it the price, dealerships don't even have inventory, you order your car, pay the price and get your car. I can see opportunity for some dealerships to go this route as many people prefer a seamless process.
That's the way Saturn shops used to operate in the 1990s, back when they were a huge customer success and before the company started going downhill by imitating the rest of GM. You could (and often did) order a car EXACTLY the way you wanted it. In fact, I did it myself....an SL-2. ;)

It's time soon to get rid of our GS F-SPort as the wife wants to get back to a SUV and in talking to a few various brands/dealerships its a #)(()$#)( headache that I don't enjoy. I wish I could just order what I want, pay the price and that is that.
I assume she wants to stay with another Lexus product?
mikeavelli
I wish I could just order what I want, pay the price and that is that.
Same. I've never bought/leased a car that had the exact options set I wanted. In particular, when they used to offer that awesome dark blue on the LS I wanted one bad but it was essentially impossible to get one with an options package I could live with. I only ever saw one that color in real life - Lexus of Orlando had it on display, but it was missing the Levinson stereo or something so I had to say no.
mmcartalk
I assume she wants to stay with another Lexus product?
We will see...

Ian Schmidt
Same. I've never bought/leased a car that had the exact options set I wanted. In particular, when they used to offer that awesome dark blue on the LS I wanted one bad but it was essentially impossible to get one with an options package I could live with. I only ever saw one that color in real life - Lexus of Orlando had it on display, but it was missing the Levinson stereo or something so I had to say no.
Me too..and as I'm getting older, I now realize why people get a German car so they can get exactly what they want....before packages were fine for me but now I would like Lexus to offer more..but I understand that is against their lean method of manufacturing....
C
  • C
    CIF
  • August 1, 2016
mikeavelli
In Japan the price is the price, dealerships don't even have inventory, you order your car, pay the price and get your car. I can see opportunity for some dealerships to go this route as many people prefer a seamless process.

What is interesting to me is if Lexus dealerships that don't haggle post a price of $45,000 for a say ES and that is the best price; how will competing dealerships respond? Naturally with a lower price.

It's time soon to get rid of our GS F-SPort as the wife wants to get back to a SUV and in talking to a few various brands/dealerships its a #)(()$#)( headache that I don't enjoy. I wish I could just order what I want, pay the price and that is that.
Agreed 100%. It truly is a headache in the vast majority of cases.

mikeavelli
Me too..and as I'm getting older, I now realize why people get a German car so they can get exactly what they want....before packages were fine for me but now I would like Lexus to offer more..but I understand that is against their lean method of manufacturing....
Toyota IMO should not be so concerned about their lean methods, where it specifically pertains to ordering and inventory for Lexus. I don't mean forget it entirely. I mean that Toyota has to realize that this is the luxury market, and they need a different approach here to increase customer satisfaction. Toyota has also been very vocal that Lexus is not chasing volume for the sake of it. Lexus is growing slowly and organically and that's the way Toyota wants it. They really need a seamless and hassle-free "custom order" system for Lexus, given they are not chasing volume.

Their next-generation TNGA/GA-L approach to plants and platforms is supposed to help with that, so we'll see.
Both dealers in my state do this "UpFront" price - They even post the MSRP and UpFront prices online..no additional fees...like Amz price.

I do NOT like this at all. Why you ask? because their discount is 1-3% off of the MSRP while you can negotiate on similar vehicles up to 6-10% off....
Ian Schmidt
I've never bought/leased a car that had the exact options set I wanted. In particular, when they used to offer that awesome dark blue on the LS I wanted one bad but it was essentially impossible to get one with an options package I could live with. I only ever saw one that color in real life - Lexus of Orlando had it on display, but it was missing the Levinson stereo or something so I had to say no.
I know it's not common, but ordering a Lexus to taste is not impossible (provided, of course, you're willing to wait). I know, because I did it with my first IS. I had to have a manual transmission in conjunction with the limited-slip differential but, at the time (late 2001), Southeast Lexus distributors decided the LSD was unnecessary in Florida (where I live), Georgia and the Carolinas. I wouldn't take no for an answer, so I special-ordered mine which, I was told, would take 3 months (it was actually more like 4). Still, special-ordering allowed me to get creative (or, perhaps, schizophrenic) and my IS 300 was manual with limited-slip and no sunroof (as sporty as you could get from the factory) but luxe inside (ivory leather/ecsaine and wood trim plates on the doors).
Almost a year after the original "Lexus Plus" announcement at the 2015 Center for Automotive Research (CAR) Management Briefing Seminars, Automotive News has posted its own account of how the plan is going. They interviewed the same Lexus of Omaha dealer featured in the earlier Bloomberg article that mmcartalk posted in this thread almost 2 weeks ago, and parts of the AN account sound similar to Bloomberg's but there are other passages that are different enough to make it a worthwhile read. Here's the article:

Lexus shoppers warm to no-haggle model
Laurence Iliff - Automotive News - August 1, 2016

OMAHA, Neb. -- When customers come in to shop at Lexus of Omaha, one of the test labs for a new sales process called Lexus Plus, salesman Jeff Bahnsen starts off by running through the program's concept statement. It assures them that he alone will take them through the entire purchase and explains why the dealership's prices are non-negotiable.

He then lets the customers decide how to structure the rest of their visit. They can start with appraisal of a trade-in or a test drive or comparisons of different models -- whatever suits them best.

For each vehicle, a label on the windshield shows customers the sticker price, factory incentives and additional discounts that go into the final no-haggle price. (An IS sedan with a sticker price of $46,494 recently carried a no-haggle price of $40,719.)

If a buyer wants to walk out because of the no-haggle policy, Bahnsen reiterates that the quoted final price is indeed final and won't change later. Some customers leave, only to return after doing more research, Bahnsen says. But for the vast majority, it never comes to that.

"They're happy as heck," Bahnsen said. "The fear level is gone. The anxiety is gone."

Lexus execs are convinced that this is a better way to sell luxury cars, and they are betting on it to further differentiate the Lexus brand from competitors. But rather than forcing the change on skeptical dealers, they are rolling it out as a voluntary experiment in the hope that it will spread organically to more of its 236 U.S. dealerships. In some markets, that means a Lexus Plus operator competes against a traditional Lexus dealer not far down the road.

It's still early, but Lexus officials are encouraged by the response they have gotten so far from the 11 dealerships involved in the Lexus Plus pilot program.

"We're seeing some good sales results," said Matt Kaleba, national manager for future retailing and incentives for Lexus. "We're seeing some outstanding customer satisfaction results. So all of the things we're hoping to see, we're starting to see early on."

Two big takeaways, says Robert Mueting, Lexus of Omaha's general manager: Buyers love having a single salesperson to work with -- even more than no-haggle pricing -- and dealership employees enjoy a sales process that is less stressful.

"We were always the person behind the curtain," Mueting said. "We were the bad guys."

'Everybody's serving Starbucks'

A second wave of Lexus Plus opportunities is likely coming soon, Kaleba said in an interview. Dealers are showing interest in signing up for Lexus' extensive Plus training, which helps dealers set their price matrix for new and used vehicles and devise their own compensation plan.

"We believe in this model, but we also believe that it's got to be right for the dealer," Kaleba said. "The dealer has to believe it's right for them. Otherwise, it's probably going to be a challenge at best."

One true believer is Mickey Anderson, president of the Baxter Auto group, which has 22 dealerships with luxury and non-luxury brands, including Lexus of Omaha and another Lexus store in Nebraska that's also part of the Plus beta program.

Anderson said he already had been thinking about how to build on the service and amenities that luxury buyers had grown accustomed to. Lexus Plus, launched in May, was the answer. But first he had to sell it to his team.

"Here's the speech I give to my employees," he said in an interview at Lexus of Omaha. "Everybody's serving Starbucks coffee and everybody's got free loaner cars, and even Cadillac will wash your car when you come in for service. And so how are we going to break from the pack and truly deliver a better experience? What would it look like if we gave the customers exactly what they wanted?"

And what they want, he said, is to be able to trust the deal being offered by salespeople and get through the process in a couple hours. As long as dealers don't change the process, "customers just have to keep experiencing the same bad experience over and over and over again."

For Lexus of Omaha, changing the process meant a reorganization of the dealership and a steep learning curve. After all, Lexus Plus means a single point person for customers and "upfront pricing" for new cars, used cars, service and everything else that's for sale. Amid robust debate over the implementation, members of the staff had to pore over a huge training manual that Anderson compares with the proverbial Manhattan phone book.

No more back-and-forth

"One of the processes that was really important is to get rid of all of the processes," he said. That gives the control back to the buyer who doesn't want to spend all day in a car dealership jumping through hoops.

The early results at Omaha of Lexus are positive given the radical overhaul going on inside its gleaming, two-story structure, salespeople and executives said. Sales are steady, average transaction prices are comparable, not a single salesperson has left, and few sales have been lost from buyers who insist on negotiating.

And Anderson said he is very strict about the implementation. That's because buyers have been trained over decades to wheel and deal for extras in the hope of getting a fair price in the end. For customers to trust the no-haggle price promise, he said, that kind of back-and-forth needs to be eliminated.

"If we gave one set of floor mats to one guy," he said, "I think it wipes the whole thing out."

http://www.autonews.com/article/20160801/RETAIL/308019953/lexus-shoppers-warm-to-no-haggle-model


And Anderson said he is very strict about the implementation. That's because buyers have been trained over decades to wheel and deal for extras in the hope of getting a fair price in the end. For customers to trust the no-haggle price promise, he said, that kind of back-and-forth needs to be eliminated.

"If we gave one set of floor mats to one guy," he said, "I think it wipes the whole thing out." (-------- Not a very good example given he was talking about premium brands where that is standard equipment.
I also just stumbled onto an official Lexus USA site touting the Lexus Plus program and listing the 11 (down one from the originally-announced dozen) currently-participating dealers:

http://www.lexus.com/lexusplus/
IS-SV
"If we gave one set of floor mats to one guy," he said, "I think it wipes the whole thing out." (-------- Not a very good example given he was talking about premium brands where that is standard equipment.
Actually, on my current LS part of the deal was that I got a set of free rubber winter floor mats along with the standard carpeted ones.
Ian Schmidt
Actually, on my current LS part of the deal was that I got a set of free rubber winter floor mats along with the standard carpeted ones.

Yes, I knew somebody would say that (I actually thought of trunk mat when I wrote it, lol) I still think his example is not very good and essentially immaterial on $40K+ cars.
There's always the trunk cargo net :) I think in spite of its general usefulness it's still optional on pretty much everything.
Ian Schmidt
There's always the trunk cargo net :) I think in spite of its general usefulness it's still optional on pretty much everything.
Not to mention the Lexus keychain....:)
I do like the built-in discounting he's giving in his no haggle price, he's claiming its competitive and will standup to comparisons. If that's true, that's a huge plus.
krew [​IMG]

A visit to Lexus of Omaha to see how the new negotiation-free pricing program works.
View the original article post
M
Did I miss any reference as to how trade-in values are determined? If not, then surely that has to be negotiated. As for setting different prices for different colours, and current market demand for a particular model, surely that means that the "no haggle" price is subject to increase or decrease every few weeks or even less, which leaves a buyer still unsure about the price. And how about dealer fees which can vary and, in my experience, are negotiable. Sorry to be so sceptical, but I'd still bet that the final price for a deal will still vary by customer, as it always has.
Where are the bigger players? Lexus of Manhattan? Longo Lexus or more of the countless dealers in the LA area?
Tragic Bronson
Where are the bigger players? Lexus of Manhattan? Longo Lexus or more of the countless dealers in the LA area?
Excellent question. Indeed, there's only a single California dealer participating in Lexus Plus, and none of the Southeast Florida dealers (including world's #1 JM Lexus) are participating. None in Lexus' new home state of Texas, either. In fact, there are no Lexus Plus dealers in the southeast and south central states with quasi-independent Toyota distributors (Gulf States Toyota and Southeast Toyota Distributors). Coincidence?
Joaquin Ruhi
Excellent question. Indeed, there's only a single California dealer participating in Lexus Plus, and none of the Southeast Florida dealers (including world's #1 JM Lexus) are participating. None in Lexus' new home state of Texas, either. In fact, there are no Lexus Plus dealers in the southeast and south central states with quasi-independent Toyota distributors (Gulf States Toyota and Southeast Toyota Distributors). Coincidence?
In major metro areas like NY and LA, the competition for luxury vehicles is cutthroat. A few hundred bucks here will persuade one buyer to take his business to another dealer like that, where luxury buyers aren't as brand loyal, and are shopping on price and deal (because they're likely leasing LOL). I'm not surprised that Lexus is pushing in places like Nebraska; I'm wondering if both Lexus Omaha and Lincoln have the same ownership as they are the only two Lexus dealers in the Cornhusker state (I know that is the case for Lexus of Albuquerque and Santa Fe in New Mexico).

As far as Lexus Plus not being at dealers where GST and SET operate, its just coincidence, since Lexus dealers aren't under the control of any of them really, unless you count JM Lexus being owned by JM Family, but the dealer itself is separate from SET.
Tragic Bronson
In major metro areas like NY and LA, the competition for luxury vehicles is cutthroat. A few hundred bucks here will persuade one buyer to take his business to another dealer like that, where luxury buyers aren't as brand loyal, and are shopping on price and deal (because they're likely leasing LOL).
That is indeed also the case in my native Southeast Florida.

I'm not surprised that Lexus is pushing in places like Nebraska; I'm wondering if both Lexus Omaha and Lincoln have the same ownership as they are the only two Lexus dealers in the Cornhusker state (I know that is the case for Lexus of Albuquerque and Santa Fe in New Mexico).
Yes, the 2 Nebraska dealers are under the same ownership. This was mentioned in the Automotive News article I copy-and-pasted earlier in this thread.
Mr. Pontiac
As for setting different prices for different colours, and current market demand for a particular model, surely that means that the "no haggle" price is subject to increase or decrease every few weeks or even less, which leaves a buyer still unsure about the price. And how about dealer fees which can vary and, in my experience, are negotiable. Sorry to be so sceptical, but I'd still bet that the final price for a deal will still vary by customer, as it always has.
The biggest impact on pricing is still factory incentives, so that will provide the most variance. I understand your skepticism for sure, but the price is determined purely by vehicle and not by who the customer is. It's the pillar of the Lexus Plus program, and any deviation would destroy the entire experiment.

Tragic Bronson
In major metro areas like NY and LA, the competition for luxury vehicles is cutthroat. A few hundred bucks here will persuade one buyer to take his business to another dealer like that, where luxury buyers aren't as brand loyal, and are shopping on price and deal (because they're likely leasing LOL).
My first thought is that this would never work in a major metro area for the reasons you outline. Too much competition, and not just from other brands -- other Lexus dealers would be ruthless.

But then I'm thinking -- if the price is set by local market conditions, a Lexus Plus dealer would be able to advertise a much lower price than a non-Lexus Plus dealer, because a non-Lexus Plus dealer would need some room to negotiate.

Even so, it would take some serious guts to launch this program in NYC or LA proper.
D
This is a bunch of baloney. I just bought an IS 200t F-sport at one of these dealers. They quoted me $2000 off which is easy to get at any dealer. I quoted them a TrueCar discounted price of $63000 of which they gave me. They also gave me $700 off the extended warranty which this program supposedly doesn't allow.
L
Tragic Bronson
In major metro areas like NY and LA, the competition for luxury vehicles is cutthroat. A few hundred bucks here will persuade one buyer to take his business to another dealer like that, where luxury buyers aren't as brand loyal, and are shopping on price and deal (because they're likely leasing LOL). I'm not surprised that Lexus is pushing in places like Nebraska; I'm wondering if both Lexus Omaha and Lincoln have the same ownership as they are the only two Lexus dealers in the Cornhusker state (I know that is the case for Lexus of Albuquerque and Santa Fe in New Mexico).

As far as Lexus Plus not being at dealers where GST and SET operate, its just coincidence, since Lexus dealers aren't under the control of any of them really, unless you count JM Lexus being owned by JM Family, but the dealer itself is separate from SET.
This is still in a test faze and if they decide to roll this out every dealership will be on the same page.. even in NY and LA otherwise it will not work

L
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