Joeb427

iTrader: (1)

If the cost is discounted off list it may work but I doubt it.
I've seen GM dealers do discounted reg tag pricing and that was short lived.
Saturn had list prices but you could get different deals with trade ins at different Saturn dealers.

Scion sales aren't great and I believe mostly because of list price only.

gengar

And at least 80% of the world lives on less than $10 a day, according to the World Bank. What's your point?

situman

There are plenty of levers Lexus can pull on a fixed price model. Like offering $3k-$5k factory rebates. Of course consumers with more money than sense will just go and pay without looking for incentives. The lazy will just not look for any incentives and walk out of the dealership. Dealers can always offer discounts on packages in addition to manufacturer rebates.

wildeklave

If the fixed price model is similar to TrueCar / Edmunds discounts then that is fine. Dealers are always welcome to sweeten the deal. I think the premise of this pricing idea is to build trust with the customer that they are getting a fair price upfront.

With modern vehicle sales most of the profit for the dealer is not made from the vehicle. The vehicle may get the dealer and sales associate a fixed amount (like $500 per vehicle sold). Where the profits are made are from:
- financing / leases (leases do well for dealers since many consumers are unaware of money factor or residual percentages. For financing they may make 25 to 50 basis points on loans they sell)
- trade ins (sometimes a dealer breaks even or takes a small loss to sell a vehicle but for a resellable vehicle they price the trade so they can make a couple thousand when they resell it)
- extended warranties (this is a high profit area with commissions of up to 40%)
- add on parts (ie. paint protection, mudguards, trailer hitches, etc...)
- service contracts (another high profit area)
- service dept (many consumers prefer to do all service at the dealer even if the prices are slightly higher)

JDR76

Back in 2001 I bought a new Saturn SL2 under the "haggle free" pricing model, and did the same with my 2006 Scion tC. I had no issues with it. Where the real negotiating took place was on my trade in. I found Saturn and Scion dealers to offer up much better trade in values. So maybe you can't get that extra $1k off the new car, but you can get it on your trade, which helps with sales tax as well.

My0gr81

They may be poor, but they still haggle for their products and services, even if they are hand outs, they haggle to get more of them. You claimed that haggle-free is "absolutely the way to go", all I am asking is why? Even the super rich haggle, they just call it "negotiating the best deal" and let their agents or purchasers do that for them. That's my point, but the question still stands, why is the way to go?

bitkahuna

iTrader: (20)

i'd support most anything that would make purchasing/leasing a vehicle less painful. i can't think of a worse 'retail' experience.

Gojirra99

Not for mercedes benz canada in vancouver since they own most of the MB dealerships themselves

S2000toIS350

I hope they publish the list of dealers participating in the program so we can get a sense of how this was set up (a cluster of dealers in a big market or a dealer here and a dealer there)

HanaleiISF

Will this make these dealerships go full court press for add ons?

No more price haggling at Lexus dealerships

SummerRain

I don't think that will be the case or I will be thankful that I just got my IS350 F Sport

JDR76

There's a good thread going about this over on car chat:

https://www.clublexus.com/forums/car...-s-stores.html

lexneffect

"Additionally, we know there is significant growth in the purchasing power of women, millennials and minorities. So, we’ve tailored our sales process to be more conducive to diverse needs and the ever evolving definition of luxury."

I think this article pretty much gets summed up by this sentence. What it really means to me is that Lexus knows consumers have more money these days and a large majority do not like or want to negotiate with pricing so Lexus can set a price (maybe a few thousand below MSRP?) and get away with more profits. All the other "intangible benefits" that are mentioned are just worthless (e.g. baby seat installs and lady's night event to learn about the vehicle), which can be pretty much free if the consumer does a quick search or ask a friend that is somewhat knowledgeable about a car or willing to do some research.

With that said, I've been a huge Lexus devotee since 2001 when I purchased my first 2002 stick-shift Solar Yellow IS300 and along the way bought an IS250, RX350, GS300, and finally a GS350. I've also brought along more friends than I can count to educate and help them purchase their very own first Lexus vehicle. I can say without a doubt, and most of you will probably agree, that having a friend you trust (and enthusiast) discussing to you about a vehicle and the pricing is far more believable and reassuring than a salesman trying to make a living. If this fixed pricing becomes nation-wide, then Lexus will have lost a long time customer and devoted fan in myself. I will likely find an alternate brand like Audi who may not have the full "customer experience" of Lexus but will give me a lower price, which is more meaningful.

theoryguy

Just a tactic to preserve margins, it won't work in where theres high competition or choices of alternatives

pavelekPL

Dumb move imo, looks like Toyota wants us to buy from the competitors