Video: Lexus LM Minivan at the Shanghai Auto Show

Can someone help me understand the Chinese dealership experience? Why would you need to pay exorbitant markup for something like this (40% of the value of the car itself)?

Gecko

Can someone help me understand the Chinese dealership experience? Why would you need to pay exorbitant markup for something like this (40% of the value of the car itself)?

Short answer: car makers don't have restrictions on markups and car prices are not regulated by the government.

When the regular public are willing to pay 10% for a Civic or a Camry it completely makes sense the rich people can pay 50% for a luxury car. When a license plate costs over $15k a few extra thousands on the car itself is not a big deal.

That being said, nowadays the average markup on Alphard is nowhere close to 40% (more like 10%). It was the case two years ago when demand is over 3x the supply (roughly 300 per month). Toyota increased LHD Alphard production to about 1,000 per month last year so the wait time without markup is reasonable now. In fact when the LM becomes available, the out-the-door price of the Alphard and Vellfire is expected to drop very close to MSRP.

Do note that paying markups for cars is exception not rule since the economy is slowing and the car market just crashed. Many brands have to offer very high discounts to keep sales afloat. As an example JLR and Volvo offer up to 25% discount when their sales are cut almost by half in recent months. It's just a few very desirable models (like the aboved mentioned Civic and Camry) that have markups.

ssun30

Short answer: car makers don't have restrictions on markups and car prices are not regulated by the government.

When the regular public are willing to pay 10% for a Civic or a Camry it completely makes sense the rich people can pay 50% for a luxury car. When a license plate costs over $15k a few extra thousands on the car itself is not a big deal.

That being said, nowadays the average markup on Alphard is nowhere close to 40% (more like 10%). It was the case two years ago when demand is over 3x the supply (roughly 300 per month). Toyota increased LHD Alphard production to about 1,000 per month last year so the wait time without markup is reasonable now. In fact when the LM becomes available, the out-the-door price of the Alphard and Vellfire is expected to drop very close to MSRP.

Do note that paying markups for cars is exception not rule since the economy is slowing and the car market just crashed. Many brands have to offer very high discounts to keep sales afloat. As an example JLR and Volvo offer up to 25% discount when their sales are cut almost by half in recent months. It's just a few very desirable models (like the aboved mentioned Civic and Camry) that have markups.

civic 和camry并不是什么很好的例子。
civic在“机油门”事件后，没有听说出现加价的情况，何况在ciasi的碰撞测试中，出现了B柱断裂这样严重安全问题。
camry去年已经有一定的优惠出现，avalon上市后更是如此。
我觉得8AR的highlander和RX300才是最好的例子，因为从15年上市以来，到现在为止加价情况从来没有断过。
而且我不认为现阶段埃尔法的加价幅度限于10%，这个数字至少在20%以上。或许你应该告诉他们，埃尔法在如此高的溢价能力下，依然实现了年销超过10000辆，而作为对比，雷克萨斯LS在终端打折的情况下，年销量也没有5000辆。
虽然中国新车市场今年一直在萎缩，但截至目前，丰田、本田的销量依然实现了增长，而且也没有在成交价上作出像沃尔沃、路虎捷豹这样的妥协。

shizhi

civic 和camry并不是什么很好的例子。
civic在“机油门”事件后，没有听说出现加价的情况，何况在ciasi的碰撞测试中，出现了B柱断裂这样严重安全问题。
camry去年已经有一定的优惠出现，avalon上市后更是如此。
我觉得8AR的highlander和RX300才是最好的例子，因为从15年上市以来，到现在为止加价情况从来没有断过。
而且我不认为现阶段埃尔法的加价幅度限于10%，这个数字至少在20%以上。或许你应该告诉他们，埃尔法在如此高的溢价能力下，依然实现了年销超过10000辆，而作为对比，雷克萨斯LS在终端打折的情况下，年销量也没有达到5000辆。这或许能解释为什么要在中国推出LM，因为中国市场看起来更需要雷克萨斯的豪华MPV。

Playing armchair Google Translator, here's what I think is the gist of Shizhi's post above:

Civic and Camry are not good examples of models that have kept price premiums in China. Civic has been affected by a problem caused by an unusual amount of un-combusted petrol collecting in the engine’s lubricant oil pan in 1.5-liter turbo engines, and Camry has seen some discount offers, especially after Avalon went on sale here.

I think the Highlander and RX 300 powered by the 8AR-FTS 2-liter turbo are the best examples of models that have commanded continuous price premiums in China. Those model lines have seen price premiums for the past 15 years.

And I don't think that the price increase of Alphard at this stage is limited to 10%. I'd say it's at least 20%. Perhaps you should tell them that Alphard has achieved annual sales of more than 10,000 units with such a high premium. In contrast, Lexus LS annual sales have barely reached 5,000 units after discounts. This may explain why LM is to be launched in China, because the Chinese market seems to need Lexus's luxury MPV.

I like how simplified kanji are always different font than Japanese.

Joaquin Ruhi

Playing armchair Google Translator, here's what I think is the gist of Shizhi's post above:

Civic and Camry are not good examples of models that have kept price premiums in China. Civic has been affected by a problem caused by an unusual amount of un-combusted petrol collecting in the engine’s lubricant oil pan in 1.5-liter turbo engines, and Camry has seen some discount offers, especially after Avalon went on sale here.

I think the Highlander and RX 300 powered by the 8AR-FTS 2-liter turbo are the best examples of models that have commanded continuous price premiums in China. Those model lines have seen price premiums for the past 15 years.

And I don't think that the price increase of Alphard at this stage is limited to 10%. I'd say it's at least 20%. Perhaps you should tell them that Alphard has achieved annual sales of more than 10,000 units with such a high premium. In contrast, Lexus LS annual sales have barely reached 5,000 units after discounts. This may explain why LM is to be launched in China, because the Chinese market seems to need Lexus's luxury MPV.

“从15年上市以来”means since 2015，not past 15 years

In fact, during the Shanghai Motor Show, Buick also released a luxury four-seat MPV.
Buick GL8 Avenir Concept
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^LM looks better. That looks like a cheap Chinese phone that people buy in industrialized west thinking it's good.

shizhi

In fact, during the Shanghai Motor Show, Buick also released a luxury four-seat MPV.
Buick GL8 Avenir Concept
I know Buick GL8 is no longer sold in the United States.In the Chinese network, rumors are that the result of crash test is too poor, which leads to delisting.
ha-ha,the result is same in ciasi test.It may be ironic that GL8 is still sold in China.
http://www.ciasi.org.cn/home/safety/pageone/id/29.html
It looks more luxurious than LM, but the front and back rows are not separated.
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I would recommend that you go sit in a Buick and come back and tell me if you think that company has the competency for that interior to do anything more than just "look more luxurious" (and i'd say even that's off the mark), and hold up over time.

Not surprising about the crash test results.

CRSKTN

I would recommend that you go sit in a Buick and come back and tell me if you think that company has the competency for that interior to do anything more than just "look more luxurious" (and i'd say even that's off the mark), and hold up over time.

Not surprising about the crash test results.

here is the introduce video of this car
https://m.weibo.cn/1667553532/4361427224005503
LM doesn't look luxurious enough because the front row design is too perfunctory. In the seven-seat version, the interior design did not have much difference with Alaphard.Even the seat stitching style is the same.As a Lexus model, LM did not open the gap with Toyota's design, which has been very disappointing.
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shizhi

civic 和camry并不是什么很好的例子。
civic在“机油门”事件后，没有听说出现加价的情况。更何况在ciasi的碰撞测试中，出现了“B柱断裂”这样严重安全问题，这对civic的销售产生了负面影响。
camry去年已经有一定的优惠出现，avalon上市后更是如此。
我觉得8AR的highlander和RX300才是最好的例子，因为从2015年上市以来，到现在为止加价情况从来没有断过。
而且我不认为现阶段Alphard的加价幅度限于10%，这个数字至少在20%以上。或许你应该告诉他们，Alphard在如此高的溢价能力下，依然实现了年销超过10000辆，而作为对比，雷克萨斯LS在终端打折的情况下，年销量也没有达到5000辆。这或许能解释为什么要在中国推出LM，因为中国市场看起来更需要雷克萨斯的豪华MPV。

I was referring to when the Civic and Camry first hit market, the premium was really high. Also the side crash test debacle didn't seem to affect Civic sales as badly as the Oil Gate had on the CR-V.

The premium on Alphards depends on where you live. In Guangdong the markup is usually higher. But up here in the north, we don't have those ridiculous wait times so 10% is what we expect. Not everyone pay the full markup to get the Alphard ASAP.

Yes, the LS failing to sell despite a 10% discount is quite disappointing. Our local dealership offers a 500h Executive for close to ¥1M now.

Also I agree Buick did a better job at least on paper while the LM is not that big a step up compared to the Alphard (especially vs. the Royal Lounge trim). It remains to be seen if the GL8 Avenir is a true contender. I doubt it though since people never really considered Buick a million-yuan brand.

ssun30

I was referring to when the Civic and Camry first hit market, the premium was really high. Also the side crash test debacle didn't seem to affect Civic sales as badly as the Oil Gate had on the CR-V.

The premium on Alphards depends on where you live. In Guangdong the markup is usually higher. But up here in the north, we don't have those ridiculous wait times so 10% is what we expect. Not everyone pay the full markup to get the Alphard ASAP.

Yes, the LS failing to sell despite a 10% discount is quite disappointing. Our local dealership offers a 500h Executive for close to ¥1M now.

Also I agree Buick did a better job at least on paper while the LM is not that big a step up compared to the Alphard (especially vs. the Royal Lounge trim). It remains to be seen if the GL8 Avenir is a true contender. I doubt it though since people never really considered Buick a million-yuan brand.

This is impossible. If there is a place to buy Alphard for an additional 80,000 yuan, the Cantonese has already arrived, and the car will be dragged from the north to Guangdong, and it will not cost much.
Alphard as a reward for dealers to complete sales tasks，dealers won't miss this rare opportunity to earn more money.Maybe you should go to the dealer to get the actual transaction price.
GL8 Avenir is certainly not a competitor of LM, just want to tell them that the Chinese MPV market has begun to receive attention.