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Profitability remains a key concern for Lexus dealers in the United States, many of whom are leaning more heavily on Lexus Certified Pre-Owned vehicles as well as their fixed ops departments to maintain or boost their bottom lines, says Paul LaRochelle, the chairman of the Lexus National Dealer Advisory Council.

LaRochelle, a partner at Sheehy Lexus of Annapolis, in Maryland, says Lexus dealers still miss having an "Escalade fighter" in the lineup, but that the brand is taking steps to fill that and other needs. His Lexus dealership sold about 1,100 new vehicles and 1,200 used vehicles in 2019.

LaRochelle, 48, spoke with Staff Reporter Larry P. Vellequette. Here are edited excerpts.

Q: Sales were largely flat for Lexus nationally in 2019. What was the year like for Lexus dealers?

A:
I think what we were able to do is, as we've done in the past and as we did in the recession, we were able to really all balance our operations. A lot of us are getting more actively involved in the Lexus Certified business. We have a tremendous program. So between used sales and new sales at almost all dealers being a 1-to-1 ratio, it's balanced out.

We've continued on as most, so even being in a flat year, I would just say that the [units in operation] count is still healthy. Therefore, the service and fixed ops business has been a primary driver in the overall growth of the dealership and the profitability of the dealership.

I think the key point is just the way we've all balanced our operations to make sure that every department is getting its fair share, whether it's the sales up front, new or used, the finance end of it or the fixed ops end of it.

AUTOMOTIVE NEWS Has Lexus put in place any standards for data security or privacy for the dealership?

PAUL LaROCHELLE: Lexus has requested that all of its dealers obtain cyber insurance and recommended that they secure minimum coverage of $5 million. At our group, we take data security very seriously. And we've got a compliance officer who comes around and spot checks us for making sure everything's kept locked up and secured.


Right now, what's the bigger concern for Lexus dealers: profitability or affordability? And why?

Profitability. We actually have a committee on that which I'm a part of. But I think that the easiest way that we fix that, which I have said to some other individuals, is that profitability comes from having exciting, desirable product. That's not new. That is the silver bullet, and that is what makes us the best brand, from way back when we launched this company 30-plus years ago — having great product in a luxury market that brings consumers in, because it is value-priced, but with exceptional quality and desirable vehicles.

We changed our brand, totally, when you think back to the 1999-model-year RX. For us, that changed us because we had a vehicle that no one else really had: a luxury SUV that fit the needs of a wide variety of clients and consumers and that is, still to this day, our No. 1 seller. But as we look into the world we're now selling into, which is certainly an SUV-driven world and buyer, we've got a great product lineup. Now it's just a matter of changing, redesigning, coming out with different variants of those luxury utility vehicles and SUVs that we currently sell, and perhaps even a few new ones along the way.

Do special editions, such as the Black Line vehicles, sell well for Lexus?

Yes, they always have. I can think back to when we did the first Coach edition cars. They've always done well. So we always welcome the special editions. I think now we will obviously see the Black Line editions and some other special editions coming out in various models. They're well received; generally, they do well. It's just subtle amount of change, but enough to where it does drive current and new buyers to our showrooms.

Let's talk about Lexus Financial Services. What is the day-to-day advantage that Lexus Financial Services brings to Lexus dealerships? How does that play out in your store?

Lexus Financial Services has always been a tremendous partner for all of us, and the ability that we have, because of the buying power we have with them in ensuring that our clients are getting outstanding programs — whether it is predominantly to lease or to finance their cars conventionally. They will give us programs that someone else is not necessarily going to get in the open market.

They compete with credit unions and any bank when it comes to rates, but over the years, we've seen some outsiders try to come in and pilfer the leasing end of our business, and they can't sustain it. Because what Lexus Financial Services does, even in the tough times and the recessionary times — I can remember distinctly when gas hit $4 a gallon, and a lot of people found themselves in a not very favorable equity position in some of these big V-8s. Lexus Financial had to take it on the chin, and they did, but they were our partner in that, and you know, they stood the test with us.

They also are great in servicing the clients, and making sure that we are ahead of clients maturing in their leases, and there are great communications with them as well as us. It's a great partnership and always has been, and I'm really happy with the leadership that is now there with [Toyota Financial Services CEO] Mark Templin and the rest of his team.

Both Lexus and Toyota are all-in and committed to their sedan lineups. Are sedans and coupes a harder sell now because there are fewer customers looking for them? Or are they an easier sell because so many of your competitors have left the segment?

I don't think it's the latter. I just think we've always built sedans that are high quality that offer the clients what it is they want, whether it's technology or any of the features in the vehicles.

Again, going back to the launch of Lexus 30 years ago, giving clients in the LS a high-value luxury car. Those who have had them, the only ones who generally leave us aren't leaving the brand, but going to one of our own luxury SUVs.

I always remember back in the day, when I used to sell these cars many moons ago, I used to tell clients that if they were looking at an LX, an LX is an LS with all-wheel drive. And what I meant by that was you're not losing all the luxury feel and fit and finish, because in most cases, you sacrifice that getting an SUV. In our case, the LX just lifts you up, literally, and gives you all-wheel drive. You're not losing the luxury drive and quietness of a Lexus that you're used to.

What do you think is missing from the Lexus lineup? Do Lexus dealers miss not having a full battery-electric vehicle to offer to customers?

No, I think we have taken the appropriate wait-and-see approach when it comes to an all-electric vehicle. When we talk about electrification, we consider that hybrid technology, which is something we came to market with first with the RX hybrid. The RX hybrid continues to dominate the luxury hybrid market.

The big miss for us right now is a two-part answer: No. 1, which is thankfully what (Toyota President) Akio Toyoda committed to us, is to continually look at the length and the cadence of our vehicles, on how long we go between redesigns — and I mean not just headlight changes, but a good, healthy redesign. And then there are some things that are in the pipeline, in what I would call the 2025 plan, where he committed to us that over the next five years, Lexus is going to get at least two to three redesigns, or even potentially a few new vehicles added to the lineup each year over these next five years.

One of our biggest misses, and it's great to say it's coming, is the new LC 500 convertible. That's very helpful, to be back in the convertible conversation, although at a very low volume. It's great that we have that, but some of the other things that we are working on that are going to be coming soon are some larger SUVs — I'll call them people movers. It seems like Lexus has a desire, and dealers have a desire, to have a seven-passenger [Cadillac] Escalade fighter, or a Denali fighter or a Lincoln Navigator fighter. Truly having the prestigious seven-passenger, people-moving, kids' soccer-family-moving vehicle. The LX is great; that vehicle will be getting an enhancement soon.

But the biggest want right now, unanimously through Lexus dealers, is to have something in that larger luxury-vehicle segment. That larger vehicle is really a big miss for us in an LUV/SUV world, where gas prices are pretty stable and with the job the nation has done to become energy independent.

Toyota and Lexus dealers have consistently had the best relationship with their manufacturer of any brands. When you talk to your fellow dealers with other brands, or even your own experience, what makes the Toyota/Lexus experience so different? What is the special sauce?

It's because I have a direct line of communication with the brand leadership, and not just because of my role as chairman. Even before, and I'm talking back 12 to 15 years — whether it was the area general manager, or whether it's the field reps, when we go to fireside chats, or on area councils or national council meetings — this is the only brand that truly doesn't just sit in the room and get a bunch of head-nodding, that truly listens to the dealers, listens to us.

These meetings are invaluable. I remember going to my first fireside chat 20 years ago, and I thought how, in a sense, it was just odd because it just wasn't normal, from my experience. I remember thinking, "Don't you just send us the product and tell us to sell it or whatever, pressure us to sell it?" I mean, they were listening, and there was no topic that couldn't be covered.

So the answer is, it is truly a partnership, where we both realized that they've got to listen to the feedback that we're getting from the consumers, to get us product, to be able to sell product, to finance and lease that product, with programs that are exceptional.
 

Gecko

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So...TL;DR
  • Lexus dealers aren't making any money on new cars, and are leaning on CPO and service to maintain their margins
    • Subtext: "Profitability comes from having exciting, desirable product" (and we don't have it)
  • He identified Lexus as a value brand
  • Lexus is still "wait and see" for electric cars, and focused on hybrids
  • Problem 1: Length between redesigns
  • Problem 2: Product
  • Allegedly 2-3 redesigns or new vehicles added per year between now and 2025
  • Considers LC 500 convertible a miss because dealers would rather have SUVs, like a full size, three row Lexus Sequoia
I find most of this article very alarming. Dealers not making money on new cars, and leaning on CPO, used and service to maintain margins is what you expect from a brand like Mitsubishi or Infiniti. The reality here is that yes, car buying has changed and everyone wants invoice pricing, but Lexus has no models that are new and desirable enough for them to hold their line on pricing or increase finance rates. Of all the things in this article, knowing that dealers aren't making money selling new Lexus vehicles is the most concerning.

Lexus as a value brand, coming from the chairman of the dealer council. Interesting. In the 90s and early 2000s, yes, many of us considered Lexus a value brand, but they have tried so hard to ditch that mentality since then. Considering the source (LaRochelle), this is a clear indication that Lexus is having to discount their cars to sell them against the competition. Not surprising considering their age and overall competitive state, but it's also proof that when such neglect becomes so systemic and persistent, it does incredible damage to your overall brand.

Problems 1 and 2, quite frankly, we have heard Lexus/Toyota make many promises over the last 15 years and almost all of them have gone unfulfilled. I will believe this when I see it.

To that point, Lexus should not be in such dire straits that dealers feel like an LC 500 convertible has stymied the timetable for a new LX or full size SUV. Toyota is the most R&D intensive brand in the automotive world with tremendous resources and scale. The state of the GX/LX/etc is sad, and if Lexus is telling dealers, "Sorry, we pulled the LC 500 convertible forward and it's going to push your SUVs back," that is yet another red flag.
 
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James

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I agree with you Gecko. These are some serious red flags. My lease is up Nov of 2021 and I'm sure I'm not the only one that is having this problem but I have no idea what to get next year. The GS will probably be gone and if not will be the same as I have now. The LS will more than likely be out of my price range. The GX, while I love the exterior changes, is still a really old model and somewhat same with LX as I look at the competition and the really cool models they have (X7, Q8, SQ8 to name a few). The IS is old as hell as well. The ES, which this new one is a great car, is not sporty enough for me honestly. We own a NX so don't want another one and RX is fine but not what I really want. I'm loyal to a t but when you spend a good amount of money you want it to be worth it and these older models just aren't cutting it for me. I'm hoping and praying that surprising news comes out and here are new models but I am seriously concerned. And like Gecko said to say we came out with the LC convertible first pushed SUV's back is crazy to me. This shouldn't have been a this or that it should be we are coming out with both of these immediately to help the bread and butter client but also to excite the high end clients.

These next 18 months are really interesting for me and I'm sure others are waiting on what will Lexus come out with. Because hey once they finally come out with something new, as a buyer you still have to like what the new product is as well...
 

Will1991

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With dealers “bleeding” like this, I’ve to question, how is it possible this lack of atitude from Top Management?

I don’t have any MBA, but choosing to do nothing to see if gets any better, certainly doesn’t seem a solution to me...
 

krew

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Lexus plans to release two to three vehicle redesigns per year for the next five years, according to an Automotive News interview with Paul LaRochelle, chairman of the Lexus National Dealer Advisory Council:

…thankfully what (Toyota President) Akio Toyoda committed to us, is to continually look at the length and the cadence of our vehicles, on how long we go between redesigns — and I mean not just headlight changes, but a good, healthy redesign.
And then there are some things that are in the pipeline, in what I would call the 2025 plan, where he committed to us that over the next five years, Lexus is going to get at least two to three redesigns, or even potentially a few new vehicles added to the lineup each year over these next five years.

This is a major statement at a time when it feels like...
Continue reading...


 

meth.ix

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they may be trying to do what Mercedes-Benz is doing, with a uniform design language for every generation of their models
3748
Next-Gen E-Class Leak
37493750
Next-Gen S-Class rendering based on spy shots
3751
2020 GLS-Class
37523753
2020 CLA-Class

As you can see, all these models have similar elements in their design, just like the previous iterations of the same models had their own design.
 
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suxeL

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Cant come soon enough :)

Jump into any TGNA vehicle and then jump into its corporate cousin/same size of vehicle with Lexus and you wonder whats been going on.

LS/UX/LC/ES are great they way they are in terms of feeling like a vehicle in the current decade.

Everything else you have to question whats going on. Lexus RX-L vs the 2020 MY Highlander...the highlander in some forms exceed the lexus in design imho.

The RAV4 vs the NX, night and day in terms of size and also how the vehicle is designed inside.

GX/LX/LC/4R....Pure legacy products that depend on their heritage to sell. If you walk into a Toyo/Lexus dealership and then visit a Lincoln, MB, BMW, etc its quite hard to pay msrp on the toyota product, since you can walk into a used card dealer and buy the exact vehicle for less and not loose much.


In regards to dealerships selling at cost, happens more often with all brands nowdays. Selling used cars keeps you in direct control over margins (no backend moving goal posts) and service is the best (sell a $20 service for $100). Happens at almost every brand.
 

CRSKTN

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Awesome.

The LF1 becomes the new LX (with some sort of luxury 4 seater option), while the Sequoia becomes the underpinning platform for a massive luxury SUV?

This could be Lexus' take on the Q7/Q8, X6/X7, and the benz coupe suv/suv concepts. Also lines up against range rover and range rover sport pairing too.

Very excited to see what the next generation looks like.
 

spwolf

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So...TL;DR
  • Dealers aren't making any money on new cars, and are leaning on CPO and service to maintain their margins
    • Subtext: "Profitability comes from having exciting, desirable product" (and we don't have it)
  • He identified Lexus a value brand
  • Lexus is still "wait and see" for electric cars, and focused on hybrids
  • Problem 1: Length between redesigns
  • Problem 2: Product
  • Allegedly 2-3 redesigns or new vehicles added per year between now and 2025
  • Considers LC 500 convertible a miss because dealers would rather have SUVs, like a full size, three row Lexus Sequoia
I find most of this article very alarming. Dealers not making money on new cars, and leaning on CPO, used and service to maintain margins is what you expect from a brand like Mitsubishi or Infiniti. The reality here is that yes, car buying has changed and everyone wants invoice pricing, but Lexus has no models that are new and desirable enough for them to hold their line on pricing or increase interest rates. Of all the things in this article, knowing that dealers aren't making money selling new Lexus vehicles is the most concerning.

Lexus as a value brand, coming from the chairman of the dealer council. Interesting. In the 90s and early 2000s, yes, many of us considered Lexus a value brand, but they have tried so hard to ditch that mentality since then. Considering the source (LaRochelle), this is a clear indication that Lexus is having to discount their cars to sell them against the competition. Not surprising considering their age and overall competitive state, but it's also proof that when such neglect becomes so systemic and persistent, it does incredible damage to your overall brand.

Problems 1 and 2, quite frankly, we have heard Lexus/Toyota make many promises over the last 15 years and almost all of them have gone unfulfilled. I will believe this when I see it.

To that point, Lexus should not be in such dire straits that dealers feel like an LC 500 convertible has stymied the timetable for a new LX or full size SUV. Toyota is the most R&D intensive brand in the automotive world with tremendous resources and scale. The state of the GX/LX/etc is sad, and if Lexus is telling dealers, "Sorry, we pulled the LC 500 convertible forward and it's going to push your SUVs back," that is yet another red flag.
Lexus dealers are most valuable properties in the US dealer franchises. US dealers rate Lexus as #1 brand to work with for 12 years straight.

Why do you think that is? Because they lose money? Or because they are most profitable in business.

but it's also proof that when such neglect becomes so systemic and persistent, it does incredible damage to your overall brand.
Q: How was 2019 for Toyota dealers?


A:
Toyota dealers, I think, were extremely happy with 2019. Car sales were relatively flat, but profits were great, and I think we're excited about the future lineup.
 

Gecko

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Lexus dealers are most valuable properties in the US dealer franchises. US dealers rate Lexus as #1 brand to work with for 12 years straight.

Why do you think that is? Because they lose money? Or because they are most profitable in business.
Correction: Lexus dealers HAVE HISTORICALLY BEEN the most valuable US dealer franchises. Having the head of the US dealer council say that they are relying on CPO and fixed ops to keep margins consistent is *very alarming.*

Why are you bringing up Toyota dealers?
 

zeusus

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  • Dealers aren't making any money on new cars, and are leaning on CPO and service to maintain their margins
    • Subtext: "Profitability comes from having exciting, desirable product" (and we don't have it)
  • Considers LC 500 convertible a miss because dealers would rather have SUVs, like a full size, three row Lexus Sequoia
I find most of this article very alarming.
Like many of your other "the sky is falling" posts, you've interpreted this article with your own confirmation bias filter. Look I get it, you think Lexus is failing at everything, ok great opinion . But somebody reading your post as opposed to the actual Q&A would be getting two completely different stories. I don't know if that is your intent or not but as an Admin, I believe you do have a responsibility as a sort of forum influencer. New readers/members may come and see that Admins bashing Lexus non-stop and think that is the norm here.


There is no subtext needed, because he literally elaborated right after.

Corrected for fact:
Subtext: "Profitability comes from having exciting, desirable product" (and we don't have it)

"profitability comes from having exciting, desirable product. That's not new. That is the silver bullet, and that is what makes us the best brand" -Larochelle

Your other misinterpretation about the LC500 was also incorrect. He did not say he "would rather" have SUVs over the LC500 vert, he said the convertible was a miss because they wanted it earlier. SUVs was added to the conversation as a side note, bonus.

Corrected for fact:
Considers LC 500 convertible a miss because dealers would rather have SUVs, like a full size, three row Lexus Sequoia

"One of our biggest misses, and it's great to say it's coming, is the new LC 500 convertible. That's very helpful, to be back in the convertible conversation, although at a very low volume. It's great that we have that, but some of the other things that we are working on that are going to be coming soon are some larger SUVs" -Larochelle
 
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suxeL

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I think the subtext is fine. Its the chairman of a dealership giving a "state of the brand" and folks removing the layers of PR speak to understand the reality of the matter.


Dealers have in the past and still are pushing for more SUVs (RX-L was rushed to market to appease the dealers). The LC500 has not sold in amazing numbers when compared to the luxury GT market competition, so why invest in a convertible form (which i think is actually a better looker) compared to say a LARGE SUV a dealership can sell in LARGE numbers. Just saying?
 

Gecko

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Like many of your other "the sky is falling" posts, you've interpreted this article with your own confirmation bias filter. Look I get it, you think Lexus is failing at everything, ok great opinion . But somebody reading your post as opposed to the actual Q&A would be getting two completely different stories. I don't know if that is your intent or not but as an Admin, I believe you do have a responsibility as a sort of forum influencer. New readers/members may come and see that Admins bashing Lexus non-stop and think that is the norm here.
Happy to take discussions about my Admin/Moderating style offline with you via PM.

There is no subtext needed, because he literally elaborated right after.
Yes, so lets go ahead and post the full quote:

Right now, what's the bigger concern for Lexus dealers: profitability or affordability? And why?

Profitability. We actually have a committee on that which I'm a part of. But I think that the easiest way that we fix that, which I have said to some other individuals, is that profitability comes from having exciting, desirable product. That's not new. That is the silver bullet, and that is what makes us the best brand, from way back when we launched this company 30-plus years ago — having great product in a luxury market that brings consumers in, because it is value-priced, but with exceptional quality and desirable vehicles.

Translation, and you're free to disagree with me here:
"Profitability is the bigger concern and we have a committee to try to fix that issue. The best way to fix it is to have exciting, desirable product. This is obviously not brain science and it's something that Lexus has historically been very good at over our brand history, but right now, we aren't. I'm going to put a quick spin on us as a value brand with high quality. This isn't wrong, I'm just trying to answer the question in a way that still puts the brand in a positive light."

Your other misinterpretation about the LC500 was also incorrect. He did not say he "would rather" have SUVs over the LC500 vert, he said the convertible was a miss because they wanted it earlier. SUVs was added to the conversation as a side note, bonus.
Once again:

AN: What do you think is missing from the Lexus lineup?

--cut text about redesigns and model cadences--

One of our biggest misses, and it's great to say it's coming, is the new LC 500 convertible. That's very helpful, to be back in the convertible conversation, although at a very low volume. It's great that we have that, but some of the other things that we are working on that are going to be coming soon are some larger SUVs — I'll call them people movers. It seems like Lexus has a desire, and dealers have a desire, to have a seven-passenger [Cadillac] Escalade fighter, or a Denali fighter or a Lincoln Navigator fighter. Truly having the prestigious seven-passenger, people-moving, kids' soccer-family-moving vehicle. The LX is great; that vehicle will be getting an enhancement soon.

But the biggest want right now, unanimously through Lexus dealers, is to have something in that larger luxury-vehicle segment. That larger vehicle is really a big miss for us in an LUV/SUV world, where gas prices are pretty stable and with the job the nation has done to become energy independent.

Translation:
"The LC 500 is cool and it's nice to be back in that segment, but nobody really asked for it because what we've been asking for all along is a large luxury SUV and Lexus didn't deliver it, so that's pretty frustrating. Lexus says they want it, and we definitely want it, and we're losing marketshare to Cadillac, GMC and Lincoln because we don't have one. I'm going to coincidentally, not coincidentally mention the new LX here. *wink wink*"


There is little sense in splitting hairs on this stuff. The text is filled with PR speak but there are dashes of honesty and promise, which is what most of these news bites are built on. If you can read through the standard company verbiage, the themes of what he is saying are pretty clear, IMO.
 
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Interesting
Las Vegas, 2016. Las Vegas, 2018. Las Vegas, here again in 2020.

About the only thing as reliable as this city's place on the NADA Show schedule is Lexus' dominance in NADA's twice-a-year Dealer Attitude Survey.

Lexus picked up another No. 1 ranking in the latest study, released to Automotive News this month. It was the luxury brand's 12th in the last decade.

How does Lexus keep its edge with dealers? An unpublicized program, called Elevate Lexus, may provide a clue.

Paul Clark, a Toyota veteran who heads Lexus College, says the effort was inspired by dealers. They sought the factory's help in guiding their employees through an expected era of profound change.

The series of three-day seminars, 11 in total, began last fall. The program combines leadership training and a deep-steeping in what Clark calls the brand experience. It's aimed at dealership managers, not principals — the folks who don't normally get to rub elbows with Toyota bosses.

Current and former Lexus execs share their views. Lessons in enlightened customer care come from Union Square Hospitality Group. Southern Methodist University's Cox School of Business is a partner. It's all capped with a dinner at the Cowboys Club at the Star, a nod to another enduring brand, the Dallas Cowboys.

About 70 percent of 242 U.S. dealerships have sent managers to the jointly funded program (dealers pay $4,995 for the first employee; discounts after that), Clark says.

One of them is Pohanka Lexus in Chantilly, Va. President Scott Crabtree sent six staffers in January, including himself, and four more this week. The cost: at least $7,000 each, counting course fees and transportation.

Why? Trust and customer retention are paramount these days, Crabtree says. Change is coming rapidly. Decisions must be made at lower levels. And, there’s that time-honored Toyota value of continual improvement.

Lexus’ Clark expects close to 100 percent dealer participation after the final round, in March.

By then, Lexus may be on its way to a 10th straight year without a U.S. luxury brand sales championship. Yet it will be a safe bet to win another trophy that says a lot more about enduring strength.
 

Ian Schmidt

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I think it's great that they're taking steps to make the dealership experience more uniform. I've had really great experiences with the 3 dealerships I've been to, but I certainly know there are others that aren't up to those standards. They really oughta make it mandatory and comp the dealers on the expenses though.
 

yiantony

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So...TL;DR
  • Lexus dealers aren't making any money on new cars, and are leaning on CPO and service to maintain their margins
    • Subtext: "Profitability comes from having exciting, desirable product" (and we don't have it)
  • He identified Lexus as a value brand
  • Lexus is still "wait and see" for electric cars, and focused on hybrids
  • Problem 1: Length between redesigns
  • Problem 2: Product
  • Allegedly 2-3 redesigns or new vehicles added per year between now and 2025
  • Considers LC 500 convertible a miss because dealers would rather have SUVs, like a full size, three row Lexus Sequoia
I find most of this article very alarming. Dealers not making money on new cars, and leaning on CPO, used and service to maintain margins is what you expect from a brand like Mitsubishi or Infiniti. The reality here is that yes, car buying has changed and everyone wants invoice pricing, but Lexus has no models that are new and desirable enough for them to hold their line on pricing or increase finance rates. Of all the things in this article, knowing that dealers aren't making money selling new Lexus vehicles is the most concerning.

Lexus as a value brand, coming from the chairman of the dealer council. Interesting. In the 90s and early 2000s, yes, many of us considered Lexus a value brand, but they have tried so hard to ditch that mentality since then. Considering the source (LaRochelle), this is a clear indication that Lexus is having to discount their cars to sell them against the competition. Not surprising considering their age and overall competitive state, but it's also proof that when such neglect becomes so systemic and persistent, it does incredible damage to your overall brand.

Problems 1 and 2, quite frankly, we have heard Lexus/Toyota make many promises over the last 15 years and almost all of them have gone unfulfilled. I will believe this when I see it.

To that point, Lexus should not be in such dire straits that dealers feel like an LC 500 convertible has stymied the timetable for a new LX or full size SUV. Toyota is the most R&D intensive brand in the automotive world with tremendous resources and scale. The state of the GX/LX/etc is sad, and if Lexus is telling dealers, "Sorry, we pulled the LC 500 convertible forward and it's going to push your SUVs back," that is yet another red flag.
This is so spot-on, especially the LC part. I don't think the dealers would have a problem if they are pushing out other models as quickly. However sadly, the only major refresh in the recent years and in the coming near future is the LC500. RC, RX, and GX are only facelifted. Those who don't know cars are unlikely to tell the diff between an old RX and a facelifted RX. It's been definitely some sad years for dealers as they are trying to sell the cars in heavy discount. I was surprised that I got the topped out ES within 50K including tax when I just visit the dealer for ES for the first time. I constantly complaining to the sales that I purchased several cars from Lexus about how disappointed I am with their old line up and outdated infotainment system. I am sure a lot of customers do so and they will pass it around. My enthusiasm towards this brand has gone downward so quickly in the past few years. I still remembered how excited I was when they have been refreshing their cars so quickly around 2013 and 2015. If it went back far more, the technology equipped with the second gen IS generations have also made me so excited by then. The big screens are such a big thing to me because the phones I was using were just 2.x ish inches large.
 

yiantony

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I think the subtext is fine. Its the chairman of a dealership giving a "state of the brand" and folks removing the layers of PR speak to understand the reality of the matter.


Dealers have in the past and still are pushing for more SUVs (RX-L was rushed to market to appease the dealers). The LC500 has not sold in amazing numbers when compared to the luxury GT market competition, so why invest in a convertible form (which i think is actually a better looker) compared to say a LARGE SUV a dealership can sell in LARGE numbers. Just saying?
It would be disappointing if they would choose a SUV over LC500C in the future under dealers pressure. They should push both at the same time and as the largest car manufacturer they for sure can do that.
 
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After that whole Yacht thing... I always laugh whenever I hear Lexus wants to add new models to the line-up. Enthusiasts start to imagine RWD CUVs, Mid-Engine Sportscars, and that 2nd Gen LFA, that exciting stuff. But in reality Lexus means Organic Jetpacks, Magnetic Hoverboards, and Spacecrafts. These are exciting, too; just totally not expected.
 

Ian Schmidt

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Lexus isn't making or engineering the yacht, though. And if the hoverboard R&D turns into a maglev adaptive suspension I'm here for it. I don't expect that to happen, but that's why megacorps do weird-sounding R&D stuff sometimes.
 
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