Notices
LX - 3rd Gen (2008-2021) Posts related to the LX570 belong in this forum

Lexus about to make a mistake with pricing?

Thread Tools
 
Search this Thread
 
Old Sep 18, 2007 | 05:02 PM
  #1  
syswei's Avatar
syswei
Thread Starter
Pole Position
 
Joined: Nov 2002
Posts: 228
Likes: 0
From: CT
Default Lexus about to make a mistake with pricing?

Pricing hasn't been released yet for the LX570, but it is out now for the TLC...
http://www.toyota.com/landcruiser/models.html

Base MSRP for the TLC goes up by more than 12%

If something similar is done with the LX570, imho it will be a mistake. I have posted in other threads my opinion that the LX faces more competition now than it did when the LX450/470 were early in their lifecycle. Also, Lexus has no 6+ passenger high-mpg vehicles to compete with diesels from MB (and others next year), putting it at a further competitive disadvantage.

Back when the LX450 was new, Lexus bragged about taking the number one spot in unit sales away from the Range Rover in a matter of months...I believe it was something like 6 months. If pricing is this high with the new generation, I don't see them as having quite the same competitive success this time around, except maybe for fleeting period when the new SUV is very early in its lifecycle.
Reply
Old Sep 19, 2007 | 07:05 AM
  #2  
pemarsh's Avatar
pemarsh
Pole Position
 
Joined: Mar 2004
Posts: 297
Likes: 1
From: Illinois
Default

WOW!!! starting at nearly $64000---without the NAV option!?!? LOL!!
I cant wait to see what the LX is going to start at!!!
Reply
Old Sep 20, 2007 | 02:00 AM
  #3  
syswei's Avatar
syswei
Thread Starter
Pole Position
 
Joined: Nov 2002
Posts: 228
Likes: 0
From: CT
Default

Originally Posted by pemarsh
WOW!!! starting at nearly $64000---without the NAV option!?!? LOL!!
I cant wait to see what the LX is going to start at!!!
My guess is 75-78k base. At that price, imho Lexus isn't going to be the sales leader in the segment. MB is, with the GL.
Reply
Old Sep 20, 2007 | 05:11 AM
  #4  
syswei's Avatar
syswei
Thread Starter
Pole Position
 
Joined: Nov 2002
Posts: 228
Likes: 0
From: CT
Default

After further thought, here are my predictions:

1. Lexus prices the LX570 at $77,495 to $77,950 base.

2. In the first year of the product cycle (calendar 2008), Lexus could possibly take the top spot in unit sales in the large luxury ute segment. But only in 2008, when the product is the newest on the block, and also benefiting from pent-up demand.

3. In 2009 and beyond, the MB GL takes the number one spot in unit sales in the segment. Reasons: (a) better value ($53k for the GL320 CDI, $56k for the GL450, $77k for the GL550), and (b) MB has diesel, while Lexus doesn't, and we won't see a hybrid LX in 2009 (and probably not in 2010 either, I'm guessing).

Those are my predictions for what Lexus will do, but that is not what I think they should do. I think what they should do is be more price-aggressive right out of the box, if they want to be the segment leader. Either that, or include practically every feature as standard equipment with a 78k price.

Last edited by syswei; Sep 20, 2007 at 05:23 AM.
Reply
Old Sep 20, 2007 | 08:32 AM
  #5  
Sal Collaziano's Avatar
Sal Collaziano
Lexus Test Driver
 
Joined: Nov 2002
Posts: 904
Likes: 3
From: Florida
Default

Lexus REALLY has to think about their pricing strategy. First, Lexus hasn't been WOOING it's customers as much as it used to lately. Maybe not for any reason other than, at this point (with technology), it's getting very difficult. But the problems are popping up... Even with the flagship LS460. Second, if their pricing becomes ARROGANT - like that of Mercedes - they're going to lose a lot of customers.

When I saw the starting price of the new Mercedes S550, I couldn't believe it. If that's where Lexus is heading, they're going to lose too many customers.
Reply
Old Sep 20, 2007 | 08:59 AM
  #6  
syswei's Avatar
syswei
Thread Starter
Pole Position
 
Joined: Nov 2002
Posts: 228
Likes: 0
From: CT
Default

Originally Posted by Sal Collaziano
When I saw the starting price of the new Mercedes S550, I couldn't believe it. If that's where Lexus is heading, they're going to lose too many customers.
The S550 did fine in first year sales, but I think year two (this year) is another story. The car is basically selling at similar unit rates as it did with the previous generation, even though it is a better car and reliability has improved. That has to be a disappointment to MB management. Credit prices that were set too high. I too fear that the LX will go a similar route.

Unfortunately for LS buyers, MB's pricing on the S provided a price umbrella for Lexus with the LS460, which is one reason I think that Lexus went with prices siginificantly higher than on the LS430.
Reply
Old Sep 20, 2007 | 11:45 AM
  #7  
Gojirra99's Avatar
Gojirra99
CL Community Team
20 Year Member
Liked
Loved
Community Favorite
 
Joined: Oct 2002
Posts: 30,271
Likes: 349
From: Canada
Default

Originally Posted by syswei
The S550 did fine in first year sales, but I think year two (this year) is another story. The car is basically selling at similar unit rates as it did with the previous generation, even though it is a better car and reliability has improved. That has to be a disappointment to MB management. Credit prices that were set too high.
I think the new S-class is doing fine even now, considering they are only selling the more expensive S550, S600 & the AMG variants now, whereas with the previous generation S-class, the lower-priced S430 was available, they even offered the S350 the final year before the new S550 was launched.
Reply
Old Sep 20, 2007 | 02:40 PM
  #8  
encore888's Avatar
encore888
Lexus Champion
 
Joined: Mar 2005
Posts: 8,695
Likes: 2
From: CA
Default

Yeah, I was just going to say, with the LS 460 having set a precedent, from base $55,000 to $61,000 increase, I'm expecting a serious increase for the LX 570. Not to mention, the press conference talked about how LX buyers are Lexus' most affluent customers.

The increase in price hasn't hurt LS sales, actually it is part of the increased prestige of the brand. That said, I agree Lexus should not be too arrogant with its pricing. The idea is supposedly that those seeking better value could go for the lesser models in the lineup. Hopefully they can achieve a balance of sorts.

But then again, volume doesn't seem to be the main concern of #1 Lexus, rather overall volume+value etc.
Reply
Old Sep 20, 2007 | 03:10 PM
  #9  
spwolf's Avatar
spwolf
Lexus Fanatic
20 Year Member
Liked
Loved
Community Favorite
 
Joined: Jan 2005
Posts: 20,212
Likes: 261
Default

Originally Posted by enigma888
Yeah, I was just going to say, with the LS 460 having set a precedent, from base $55,000 to $61,000 increase, I'm expecting a serious increase for the LX 570. Not to mention, the press conference talked about how LX buyers are Lexus' most affluent customers.

The increase in price hasn't hurt LS sales, actually it is part of the increased prestige of the brand. That said, I agree Lexus should not be too arrogant with its pricing. The idea is supposedly that those seeking better value could go for the lesser models in the lineup. Hopefully they can achieve a balance of sorts.

But then again, volume doesn't seem to be the main concern of #1 Lexus, rather overall volume+value etc.
it hasnt hurt LS sales because they improved LS that much...

And same will happen with LX.

It is luxury SUV with every possible feature you can imagine. It has more features than any SUV on the planet.

It wont be cheap. Sorry.
Reply
Old Sep 20, 2007 | 06:39 PM
  #10  
tella's Avatar
tella
Driver
 
Joined: Mar 2003
Posts: 162
Likes: 0
From: Illinois
Default

It is funny, that some dealerships take pre-orders for the upcoming LX570 at the current prices of the 07 model. Who will win???
Reply
Old Sep 20, 2007 | 07:05 PM
  #11  
350ripper's Avatar
350ripper
Driver
 
Joined: Jul 2007
Posts: 163
Likes: 1
From: TX
Default

the lx is going from underpowered to NICELY power at 381 horses! that kind of power ain't cheap!
Reply
Old Sep 21, 2007 | 07:40 AM
  #12  
Sal Collaziano's Avatar
Sal Collaziano
Lexus Test Driver
 
Joined: Nov 2002
Posts: 904
Likes: 3
From: Florida
Default

Originally Posted by syswei
The S550 did fine in first year sales, but I think year two (this year) is another story. The car is basically selling at similar unit rates as it did with the previous generation, even though it is a better car and reliability has improved. That has to be a disappointment to MB management. Credit prices that were set too high. I too fear that the LX will go a similar route.

Unfortunately for LS buyers, MB's pricing on the S provided a price umbrella for Lexus with the LS460, which is one reason I think that Lexus went with prices siginificantly higher than on the LS430.
That first year was all the people with more money than they know what to do with. Those who had to 'have it before anybody else in their area'. Once those people fade away, everyone who notices prices realizes they're not getting a very good deal. You could get an S500 fully loaded for a fair price. Now, the S550 has options you just should NOT do without - but bring the price to a whole new level..
Reply
Old Sep 21, 2007 | 04:02 PM
  #13  
syswei's Avatar
syswei
Thread Starter
Pole Position
 
Joined: Nov 2002
Posts: 228
Likes: 0
From: CT
Default

Originally Posted by spwolf
it hasnt hurt LS sales because they improved LS that much...

And same will happen with LX.
The bigger reason imho that the new LS has done ok unit-wise is that MB raised the price umbrella.

No major competitor is really raising the price umbrella in the large luxury SUV segment. So I think that beyond the first year sales, LX unit sales won't be all that great, and very likely less than GL unit sales.
Reply
Old Sep 22, 2007 | 03:37 AM
  #14  
lexxtasy's Avatar
lexxtasy
Driver
 
Joined: Feb 2005
Posts: 105
Likes: 0
From: ON
Default

Here in CANADA at least the current '07 LX470 is priced at around the same MSRP as the Range Rover ($101,000), IMO thats the market that the LX competes with rather then the GL

The new LX570 will probably be priced somewhat in between the Range Rover and Range Rover Supercharged (so in between $101,000 and $121,000) which gives it some cushion and will not sway away buyers. Since now the LX570 has power to compete with the supercharged version!

Definitely people who are LX customers and are able to afford it will not sway just because of a small price increase
Reply
Old Sep 22, 2007 | 12:38 PM
  #15  
AyM's Avatar
AyM
Driver School Candidate
 
Joined: Jan 2006
Posts: 48
Likes: 0
From: AL
Default

My opinion conversely is that Lexus will do right thing if it increases LX price substantially. I'm not in USA. When u see 1.41 EURO/$ rate today u may observe how Mercedes, BMW, other Europian cars' prices go up in Europe. And except of sales Lexus must also care about brand image. Between such an expensive competitors it may lose it's brand image if it keeps low prices.
Reply



All times are GMT -7. The time now is 02:22 PM.