Official Lexus Future Product & Powertrain Megathread

[Tragic Bronson]

What is the point of your picture?

Sarcasm

 

[Tragic Bronson]

I don't think it's desperation but I meant offer really compelling products while at the same time, providing the option of longer financing terms at lower rates.

If something is not compelling enough, nothing will happen to sales even with a -2% 120 month terms.

You have great financing deals when you are desperate to sell cars and then lose your profitability. Not other way around - you are not profitable if you sell cars with huge incentives.

Spwolf stated that these sales programs are detrimental, yet Lexus does too so its not unusual. Only ones that don't (at least publicly) are Lamborghini, Rolls Royce, etc. Lexus use them as much as any other brand, especially with the RX, ES, NX and even UX. Lease specials and low interest financing are part of the game, not to mention plenty of manufacturer to dealer incentives as well. That cuts into Lexus division profits. I would think in China and Europe, their ATPs (average transaction prices) are higher than here since it is well known that if you shop hard enough on any luxury vehicle, you can get a pretty good discount. What Johnny L said, sounds extremely believable about the amount of NX's sold with cash on the 'hood'. My dad's ES was purchased similarly, with a very sizable discount off invoice price, which is meaningless these days.

 

[Gecko]

With regard to what @Tragic Bronson and I are both saying about low profitability, this is not something that only Lexus is struggling with. Here in the USA, in the age of TrueCar, CarGurus, Kelley Blue Book True Market price, the internet, etc... everyone expects to get everything at "cost." Car at cost, options at cost, negotiate down the dealer fee, the list goes on. This type of pricing transparency has drastically changed the car shopping, buying and selling process for consumers and dealers alike.

Where the Germans excel is both options and more middle tier and flagship product to make up for selling stripped out CLAs and 2 Series. For years, Lexus fans - myself included - would talk about the nickel and diming of options, paint colors, interior colors, wheels, standalone features vs. packages, etc in the German brands.... but all of that nickel and diming A) adds up and B) helps to lock in some level of profitability.

When I've been to a BMW or Mercedes dealership, they often have 2-3 black/black or white/tan C Class/3Series that are basically just ad cars that come with zero options, they are the bare bones models and cheapest MSRP that nobody actually buys. From there...

Oh you want this blue exterior? That's an extra $750.

You want real leather? That's part of a luxury package that comes with 18" wheels and an upgraded audio system for $7,800.

Oh, you want all that but you like the sport wheels? Those will be an extra $3,850, and we recommend the warranty because of the streets in Atlanta, so that's another $700.

Oh, you like the panoramic roof? That's part of a premium luxury option package that upgrades your leather to perforated - oh, and it only comes in saddle leather, so that's also $825 more - it gives you the pano roof, rear sun shades, extra power adjustable seat settings, and the Bang and Olufson sound system. That package is $6,600.

Piano black interior trim? That's a standalone option that costs $1,750 but you will love it!

Oh, you wanted those nicer headlights? They're a $2,300 option!

Now your $38k C300/330i is $65k++ and the dealer just put you on the hook for $20k+ worth of options just to get the car more optioned than a Toyota Camry XSE/XLE. If you were to step to a 340i, that would be $70k. The markup on options is *insane*.


Lexus still pulls basic features into 2-4 common option packages that are both efficient to produce and cheaper/easier to sell. For the consumer, I can see it both ways... you'll save money with a Lexus but you might not be able to get the car optioned exactly how you want. With the Germans, you will pay more, but you'll be able to have exactly what you desire. That type of customization and ability to easily add on options and packages piles on the profit QUICKLY.

My point about it being easier to make a profit on products like 5/E/A6/GS/X5/GX/GLE and S/7/LS/LC/8 has already been made. The problem is those parts of Lexus' portfolio are really struggling or being cancelled/delayed.

 

[internalaudit]

I think the complaint people have with Lexus is either you have the F Sport package or the Executive package when maybe it's best to offer an Ultimate package. Of course, one cannot have comfort and stiff suspension without AVS.

They should allow AVS on ECO and normal driving modes too because I would rarely set a vehicle to Sport++ and burn extra fuel I really don't need to. Or simpler, allow various driver set combinations instead of just factory preset ones. People like choices.

 

[CRSKTN]

Mods remove if inappropriate, but I couldnt help but think of this for some reason

I will just say, without much further detail, that these are all (based on) real people who are still (mostly) active on the street, and if you get lucky you may end up dealing with them not realizing they were the guys from the book.

You're right though. The subprime car lending market is just another version of the same mistakes made that led to 2008.

 

[Gecko]

I think the complaint people have with Lexus is either you have the F Sport package or the Executive package when maybe it's best to offer an Ultimate package. Of course, one cannot have comfort and stiff suspension without AVS.

They should allow AVS on ECO and normal driving modes too because I would rarely set a vehicle to Sport++ and burn extra fuel I really don't need to. Or simpler, allow various driver set combinations instead of just factory preset ones. People like choices.

Agree. The fact that you cannot get an LS F Sport with some type of wood trim and only limited interior colors is crazy to me. My dream would be a matte black wood trim that is exclusive to the F sport paired with a brown leather.

 

[CRSKTN]

Agree. The fact that you cannot get an LS F Sport with some type of wood trim and only limited interior colors is crazy to me. My dream would be a matte black wood trim that is exclusive to the F sport paired with a brown leather.

Aren't we starting to see this though? Didn't the new refreshed RX come out with a new version of the F-sport options that broke it down into styling and performance options that let you get a better mix of luxury and F-Sport? I think it was like a styling package, an air intake package, and some other package.

 

[mikeavelli]

I know I’ve said this before but I think the luxury market is pretty tapped out in America. Also TESLA came out of nowhere the last ten years and sold a crap load of vehicles. No one saw that coming. No one.

I think 300-330k is the Max and is an insane number of luxury vehicles from one brand. That was the total market 3 decades ago.

As Gecko stated and what I’m seeing talked about is the COVID-19 crisis has dealerships reassessing things. Volume became the key metric it seems and not profit. Well good luck with volume today.

And I’ll be quite frank I think there’s just too damn many luxury cars around new and used. Doesn’t feel nowhere was special as 20-30 years ago. They are too attainable and don’t conjure up feelings of luxury as everyone chased volume. That is one thing I love about the LX or the LC or even LS. They are rare. Look at how even AMG bastardized things with slapping AMG on. 43/53 etc cars... all for the sake of volume.

 

[Gecko]

Something else that is interesting to me as an observer:

Years ago when vehicles like the 1 Series, 2 Series, X1, X2, A Class, GLA, CLA, A3 and Q3 were launched, many people (including ToMoCo executives) said Lexus "Wasn't going downmarket because they don't need to" and made jabs about Lexus being a more premium brand that didn't need to go below the $30k mark with product. That sounded good at the time.

What we have seen since then is Lexus' brand cache sliding and the Germans, especially Audi, becoming stronger and more desirable than they ever were with products like X7, 8 Series, upcoming X8, X6, GLE Coupe, revamped GLS, S Coupe and convertible, AMG everything, Q8, S/RS lines, A5 Sportback, eTron, etc. So in my opinion, I don't really think lower end product has impacted the desirability or "prestige factor" of Mercedes, BMW and Audi.

I am not grinding this axe, but losing GS (ES is still seen as an entry level product), GX being 10 years old, 5LS product issues, UX execution, lack of F products, the shift to CUVs with a dated CUV/SUV lineup and a reluctance to join new segments (CUV coupes, performance CUVs, 4 door coupes) have drug Lexus down more than the Germans for offering cheaper products.

I really don't know what the perfect mix is with affordability, approachability and cache. Jaguar offers a limited and more expensive lineup, but is struggling to survive. Cadillac changes their approach every two quarters. Infiniti... are they going to make it out of 2020? Acura may have something of a product resurgence on the horizon, but even if it is well received, the brand has a long way to go. Genesis was a good idea at a bad time, with the wrong product for a CUV-driven market shift. Lincoln has fizzled out again.

Comparatively, Lexus is still in a good position, but it's going to take time, focus and a significant amount of R&D to fix their problems. The vehicles with the biggest upside and ability to positively impact the brand and market IMO are: next gen ES, NX and RX, refreshed LS and the next LX. Some key updates for the LS with an all new LX will go a long way for Lexus' flagship appeal. The importance of a production LF-1 also cannot be understated.

 

[LexsCTJill]

I know I’ve said this before but I think the luxury market is pretty tapped out in America. Also TESLA came out of nowhere the last ten years and sold a crap load of vehicles. No one saw that coming. No one.

I think 300-330k is the Max and is an insane number of luxury vehicles from one brand. That was the total market 3 decades ago.

As Gecko stated and what I’m seeing talked about is the COVID-19 crisis has dealerships reassessing things. Volume became the key metric it seems and not profit. Well good luck with volume today.

And I’ll be quite frank I think there’s just too damn many luxury cars around new and used. Doesn’t feel nowhere was special as 20-30 years ago. They are too attainable and don’t conjure up feelings of luxury as everyone chased volume. That is one thing I love about the LX or the LC or even LS. They are rare. Look at how even AMG bastardized things with slapping AMG on. 43/53 etc cars... all for the sake of volume.

I agree with all of this. It is also pretty awesome that when you do see a LS500, they are super rare and adds to their prestige.

 

[Tragic Bronson]

Something else that is interesting to me as an observer:

Years ago when vehicles like the 1 Series, 2 Series, X1, X2, A Class, GLA, CLA, A3 and Q3 were launched, many people (including ToMoCo executives) said Lexus "Wasn't going downmarket because they don't need to" and made jabs about Lexus being a more premium brand that didn't need to go below the $30k mark with product. That sounded good at the time.

What we have seen since then is Lexus' brand cache sliding and the Germans, especially Audi, becoming stronger and more desirable than they ever were with products like X7, 8 Series, upcoming X8, X6, GLE Coupe, revamped GLS, S Coupe and convertible, AMG everything, Q8, S/RS lines, A5 Sportback, eTron, etc. So in my opinion, I don't really think lower end product has impacted the desirability or "prestige factor" of Mercedes, BMW and Audi.

Definitely, lower level models only did add to the brands' appeal, thanks to brand cachet. Websites like Leasehackr help would be buyers find deals, so MSRP is not a factor at all when you shop on monthly payments and money factor, where many times, you can find a lease on a nice vehicle for the price of a Corolla.

I am not grinding this axe, but losing GS (ES is still seen as an entry level product), GX being 10 years old, 5LS product issues, UX execution, lack of F products, the shift to CUVs with a dated CUV/SUV lineup and a reluctance to join new segments (CUV coupes, performance CUVs, 4 door coupes) have drug Lexus down more than the Germans for offering cheaper products.

Losing the GS may not mean much saleswise, but it is becoming a cult Lexus vehicle. Lexus SHOULD find away to bring it back because it still has equity, but at this point, the folks didn't know what else to do with it after stuffing the 2URGSE.

I really don't know what the perfect mix is with affordability, approachability and cache. Jaguar offers a limited and more expensive lineup, but is struggling to survive. Cadillac changes their approach every two quarters. Infiniti... are they going to make it out of 2020? Acura may have something of a product resurgence on the horizon, but even if it is well received, the brand has a long way to go. Genesis was a good idea at a bad time, with the wrong product for a CUV-driven market shift. Lincoln has fizzled out again.

Jaguar: The brand is the sore spot for Tata, their crossovers are struggling to be relevant when Land Rover is about to launch the Defender with much fanfare and buyers are more attracted to 100K RRs than 10 year old Land Cruisers.

Cadillac: They're pushing their CT4 and 5 models now (will they suffer the same fate as the ATS and CTS), but Escalade will always have the bling factor.

Infiniti: Great place to score a Q50 RS400 for $400/month, otherwise, Infiniti is more product barren, while Nissan is putting their money into the mothership brand which obviously is having its own issues.

Acura: RDX and MDX are relevant and pay the bills. Will the next TLX invigorate the car side? Still miss the Integra and original NSX.

Genesis: Poor timing with launch and product mix but their cars are decent, and the all new G80 and GV80 are well received it seems. Some Toyota alumni work there now, including the head of USA sales who started at their career at Toyota/Lexus.

Lincoln: They actually had a sales increase last year; products finally decent like the Aviator, Corsair and especially the Navigator, where it is a relevant player in the segment with the Escalade and Range Rover. I believe this is the vehicle Lexus dealers really want, and buyers are paying close to $100K for them. OTOH, their cars are weak but we know Detroit isn't big on them anymore.

Volvo: XC40 definitely caught my attention. Best executed CUV in this segment IMO, sold as many units as the UX. Still niche luxury but relevant.

Comparatively, Lexus is still in a good position, but it's going to take time, focus and a significant amount of R&D to fix their problems. The vehicles with the biggest upside and ability to positively impact the brand and market IMO are: next gen ES, NX and RX, refreshed LS and the next LX. Some key updates for the LS with an all new LX will go a long way for Lexus' flagship appeal. The importance of a production LF-1 also cannot be understated.

Still great to be #3, but Lexus was always striding to be #1. The growth is in the SUVs right now, and old tech in luxury vehicles pushes buyers away.

 

[CRSKTN]

When I was young luxury cars were rare and hard to justify because you could do so much more with your money.

Now, becoming wealthy is effectively impossible for most, even in wealthy countries. Your place now depends ever more on where you started, vs what you've done. When people realize this, and things like homes are impossible to own, things like cars become the easier, lower hurdle to add some sense of achievement and quality to life.

Combine that with poor financial literacy and easy access to debt, and as soon as some people see others being irresponsible they feel like they can be too.

Then you end up in a world flooded with luxury cars, as purchasing power stagnates.

Instead of raising wages, people in power realized you can just extend credit, and if people are stupid enough (they are), they wont be able to tell the difference and you can get them under your thumb with debt.

I'd wait on any big purchases this year, especially until the dealers are hurting more.

 

[mikeavelli]

Still great to be #3, but Lexus was always striding to be #1. The growth is in the SUVs right now, and old tech in luxury vehicles pushes buyers away.

Lexus states they never sought to be #1. They are happy with it but didn’t aim for it. In contrast Benz and BMW fight to the death to get they #1 spot. BMW has lied about its numbers and is again under investigation.

They sold 300k cars and 200k are the NX, RX and ES. Random thought.

 

[Gecko]

Lexus states they never sought to be #1. They are happy with it but didn’t aim for it.

In all fairness, Lexus changed their story when they realized they were going to lose the title, and for the time thereafter having never regained it. Back in their hay-day, Lexus had no problem mentioning being the #1 luxury brand in the US and was pretty proud of it.

 

[ssun30]

Considering how old their SUV lineup is and how successful they still are, I have some high hopes for the upcoming NX. So far it seems to be on the right track to dominate the segment seeing how dominating RAV4 already is.

 

[internalaudit]

When I was a teenager and still living in the Far East, my Dad had a 190E and 260E MB and back then, it had power everything. I would smoke all the Corollas with carburetors lol.

Fast forward today, even the most basic car has power everything and even boatloads of safety features even for the basic models. No wonder people are buying the cheapest Toyota, Lexus, Honda and Acura's, they already have TSS/LSS and Honda Sensing /Acura Watch.

For lower level Audi's, I think middle or top trim is required to get adaptive cruise control. For BMW, the new 330e in Canada can't even come with ACC.

What to me are considered luxuries that I may consider purchasing? Air cooled seats, massage seats (for wife, we have a basic Panasonic massage chair at home), adaptive variable suspension/height, torque vectoring, maybe newer safety technologies that aren't found in mass market cars and paint that is impervious to bird droppings, tar, etc. Hybrid technology with electric supercharger seems nice too but I am learning towards BEVs to be honest.

What are the minimum I would want: ACC, good mileage, heated steering wheel and heated seats, auto dimming mirrors, driver seat memory, drives at least 85% of a m340xi with various M upgrades so RWD-biased AWD, reliable enough. Maybe .85g and a firm chassis but comfortable ride (if Porsche can do it, so can Lexus)

See, I am not asking for too much.

 

[Ian Schmidt]

With the Germans, you will pay more, but you'll be able to have exactly what you desire. That type of customization and ability to easily add on options and packages piles on the profit QUICKLY.

I specced out a comparably equipped S-Class and 7-Series with their online builders before I went with the LS500 and while they still offer more standalone options than Lexus, it's not like it was even 10 years ago. Many of the standalone things require that you have specific packages first, and it's not always obvious why.

 

[suxeL]

I specced out a comparably equipped S-Class and 7-Series with their online builders before I went with the LS500 and while they still offer more standalone options than Lexus, it's not like it was even 10 years ago. Many of the standalone things require that you have specific packages first, and it's not always obvious why.

Now take that exact build sheet to either dealership and ask how you can go order these three models to spec....maybe throw in custom interior and exterior color appointments....I bet Lexus dealerships will come back with "why bother, we have a great selection of the even better LSs on the lot" or "it will take some time, incentives will not be as good as now" or "Lexus doesnt build them that way".

Lexus dealers are not really interested in custom orders on vehicles on the upper segements (LS, LX) in certain regions of the globe. It`d be nice to have a more accommodating setting for customers in that segment.

 

[Tragic Bronson]

Lexus dealers are not really interested in custom orders on vehicles on the upper segements (LS, LX) in certain regions of the globe. It`d be nice to have a more accommodating setting for customers in that segment.

I wish they would do more bespoke models. In Japan, the process is exactly the way you describe, and that's for any Japanese made car at least, not just luxury brands. I prefer that since you can spec the car exactly the way you want. Special orders for American dealers, you need to wrangle some dealers to do so.

 

[Ian Schmidt]

Lexus dealers are not really interested in custom orders on vehicles on the upper segements (LS, LX) in certain regions of the globe. It`d be nice to have a more accommodating setting for customers in that segment.

Not disagreeing, but the exact car I built on the Lexus configurator was actually on the lot at my local dealer (and it told me so). That was luck, because as we know dealers of any luxury brand these days rarely carry anything that isn't black, white, or grey, and I was insisting on Nightfall Mica this time.

In Japan they have all kinds of options for Lexus, they need to bite the bullet and do that here, at least on the not-so-volume models.