trungdq

How many percent of discount to make an average sold E Class/5 Series become as cheap as an average ES/RX 350 which contribute to 50% of Lexus volume?

Motor

Toyoda is the man.

spwolf

I dont know, but I will tell you that MB wont be making great profits this year with such discounts. Most profitable manufacturers these days have 6% margins and at best times had 12%.

You do the numbers.

In normal years, Lexus was considered most profitable part of Toyota, and Toyota had largest margins in the industry at >8% (only Porsche had higher before recession).

TRDFantasy

I don't understand how someone doesn't understand this simple point ..
The Germans will soon have several models below 30K in the US, with FWD and 4 cylinder engines.

Read the article again carefully. Yoshi Inaba said the Germans are going downmarket. As in, it's going to happen in the future, not right now. This has nothing to do with average transaction prices.

TLe2006

BMW and Mercedes have no choice to go downmarket to make more profits. Lexus has Toyota to sell 4 cylinders and fwds.

trungdq

The Mercedes had A Class in Europe more than ten years ago (1997). But when the gas price was low, the American did not like small cars, so Mercedes did not bring it to the US. In the future, Mercedes is not going downmarket, but bring a models from one continent to another continent according to the customer's needs and the fuel situation when gasoline price tends to increase.

Audi produce A1 and Q3 mainly to compete with its German rivals in Europe rather than bring them to the US. The US is not a big market for small cars like Europe.

Lexus brought CT-h to the US before Mercedes bring A Class to the US.

trungdq

You are wrong! to make high profit margin, small cars are never the choice of luxury. Mid-size luxuries like 5 Series or E Class are the money printers because they both bring high profit margin and volume.

For non-luxury cars in the US, Toyota make high profit because it sells more mid-size (Camry) than its rivals. Camry brings both high volume and profit margin. Small cars like Yaris have very low profit margin.

TRDFantasy

Everything you said is fine, but still doesn't directly address what I said .

Let me state again, in the coming future, the Germans will have several, I repeat several vehicles with FWD and 4/3 cylinder engines here in the US.

The 1 Series will change from RWD to FWD for BMW. 1 Series will also have 4 cylinder engines in the US. Mercedes is not just bringing the A Class. They will also have a coupe, and an SUV based off their new FWD architecture. Renault-Nissan is also interested in using this FWD architecture for an entry-level Infiniti model.

So yes, this IS going downmarket. Mercedes will go from one low-end FWD vehicle (A Class) to *several* low end FWD vehicles. BMW is also working on a FWD vehicle below the 1 Series with a 3 cylinder engine. Again, that is going downmarket, along with the rumored change of the 1 Series moving to a FWD architecture and other rumored vehicles from BMW using this FWD architecture.

spwolf

once again, when you are selling at average 12.7% discount, you are not making any profit with large cars either.

As to the CT200h - check how much it costs compared to its European rivals in Europe. CT200h is significantly more expensive vehicle, and here in Europe A3 and 1 series start at 10k less.

LexFather

1. This chart (which is wrong) should be re-sized.
2. Your source is not a source. If you used it in a literary paper you would fail. Massively. It was a nice effort by someone to "estimate" what they "thought" was avg price. Some brands are missing and it is their guesstimate. It is not a legitimate source at all so its pretty irrelevant.

Its simply taking the median price of the base model and then loaded model and saying "that is the avg price'. That is WRONG.

Where is 2011 data? The same old recycled numbers are being used from prior years.

The fact is the Germans have done downmarket for over a decade now and they sell. They are not niche models, the A3, 1 series and A class all sold over 200,000 units last year. Imagine if Lexus sold 200,000 more sub entry level cars.

Double standard again!

seanlee

lol at SAAB.
they can price their car however they want, but the actual translation price for SAAB (i cannot speak for other cars) is wayyyyy less than its sticker price. the same goes for Cadillac.

did you even visit saab dealer and see how their 45k+ sticker price card is on sale for 30k+?

save you the trouble, go to edmund now and price out a saab. i did just that and a 41k saab 9-3 has true market value going for 36k. and i can tell you that i will almost definitely get that car for not much more than 30k.

there is something to be said about price inflation and confusion over "sales" take BMW for example, how do you categorize a car that is leased? do you count in this data base?

gengar

Ya, I suppose it's a sports car problem. Didn't seem that long ago the Celica was selling 50k+ a year in the US.

trungdq

Most of Mercedes profit come from E Class, not A, B, C Class while most of Lexus profit come from ES and RX 350. Now just compare the average price of E Class with ES/RX 350 to make it clear!

Europe is a different market where the Europeans have advantages to sell cheaper. European people use much more diesel as fuel than Americans. Don't try to compare hybrid cars in Europe with gasoline cars. Lexus is very small in Europe. So far Lexus is successful United States, the Germans are more successful in other major markets (China, Europe).

ST430

I don't know why you try to go on tangents to support your data. You have no understanding at all of the Chinese market. First, the Audi will outsell everyone almost every year. Why? Because 1) they are made in China and 2) are the official government cars there (go to Beijing and you'll see them everywhere). Second, you do realize that your classic 5 series in china is a 4 banger? In China, engine size matters because import duty tax is valued against it. The ES there is actually the only 6 cylinder and most people don't buy it because its too damn $$$. It probably doesn't also sell as well because the Toyota Camry there is almost like the ES but has a 4 cylinder and costs significantly less. Please stay on target with what you're actually trying to say and use data from one source to support one position. In the case of the OP, it was about the American market and how ther Germans are going downmarket. That is fact. I hope you're not arguing against that.

spwolf

you clearly know nothing of what you speak about

at 12.7% average discount, they are not making profit on cars they sell in the USA.

Now we get to China? Lexus has no Chinese factories, nor European factories, they will not sell well... but you what they do best? Bring loads of profits to Toyota.