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    Thread: Lexus hasn't made a profit in 2 years...

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      09-10-2019 03:34 PM #126
      Quote Originally Posted by The_Real_Stack View Post
      I'm not talking about the advertising itself, I'm talking about the position in the market. What does Genesis bring to the market that isn't already there? Just a low price, and generic looks. BMW is sporty, MB is luxury/stately, Audi is styling, Lexus is reliable, Genesis is...cheap.
      I mean, there's value in that. What does a $65K M340i do that a $45K G70 3.3T doesn't, besides have the right badge? Plus the G20 looks like a Lexus from the back. I'd also argue that the Germans aren't exactly holding up to their promises. BMW has dialed back the sport significantly over the last decade across most of their lineup. There's nothing luxurious/stately about a CLA/GLA. Audi has been in design paralysis for a decade... you have to be a forensic scientist to tell the generations apart. All at a premium against the likes of Genesis & Lexus. What's the value proposition there?

      So while I agree that the luxury market is absolutely saturated, complacency and incompetence by the incumbents has presented some opportunity. What do Audi/BMW do that warrants the 20-40% premium they charge over Genesis? I don't think Genesis' dealer problems are worth five figure sums.

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    3. Member The_Real_Stack's Avatar
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      09-10-2019 03:54 PM #127
      Quote Originally Posted by CTK View Post
      I mean, there's value in that. What does a $65K M340i do that a $45K G70 3.3T doesn't, besides have the right badge? Plus the G20 looks like a Lexus from the back. I'd also argue that the Germans aren't exactly holding up to their promises. BMW has dialed back the sport significantly over the last decade across most of their lineup. There's nothing luxurious/stately about a CLA/GLA. Audi has been in design paralysis for a decade... you have to be a forensic scientist to tell the generations apart. All at a premium against the likes of Genesis & Lexus. What's the value proposition there?

      So while I agree that the luxury market is absolutely saturated, complacency and incompetence by the incumbents has presented some opportunity. What do Audi/BMW do that warrants the 20-40% premium they charge over Genesis? I don't think Genesis' dealer problems are worth five figure sums.

      The problem is, if you are looking for value, you can spend a lot less. What does a $65k Mercedes E300 do that a loaded Camry or Accord can't? Realistically, not much. So what regular people (not enthusiasts) in those market segments are paying for are intangibles, and a huge intangible is brand name.

      If you want to gain sales in those segments, you need to be something that A) existing brands don't offer and B) people shopping in those segments WANT. People looking to spend $65k on a Mercedes are specifically NOT looking to drive something that screams "I bought this because it was cheaper than a Mercedes."
      Quote Originally Posted by Volkl View Post
      My wife wanted a SUV with a manual transmission. I suggested a Wrangler, she said no way, too masculine

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      09-10-2019 08:09 PM #128
      Quote Originally Posted by The_Real_Stack View Post
      The problem is, if you are looking for value, you can spend a lot less. What does a $65k Mercedes E300 do that a loaded Camry or Accord can't? Realistically, not much. So what regular people (not enthusiasts) in those market segments are paying for are intangibles, and a huge intangible is brand name.

      If you want to gain sales in those segments, you need to be something that A) existing brands don't offer and B) people shopping in those segments WANT. People looking to spend $65k on a Mercedes are specifically NOT looking to drive something that screams "I bought this because it was cheaper than a Mercedes."
      You are confusing value with cheap. Someone looking to spend $60K+ on a car probably still wants value. For most people in that price range value is tied to brand. But for someone who wants the most content/performance for their money, the Germans are terrible, and brands like Genesis, Lexus, Infiniti etc make sense.

      Genesis' main problem isn't the brand's image. It's the abysmal rollout and the complete lack of crossovers. The crossover situation is more dire and doesn't need strong branding to succeed. The top selling midsize crossover is a warmed over Toyota Highlander.

    5. 09-10-2019 09:40 PM #129
      Quote Originally Posted by CTK View Post
      I mean, there's value in that. What does a $65K M340i do that a $45K G70 3.3T doesn't, besides have the right badge? Plus the G20 looks like a Lexus from the back. I'd also argue that the Germans aren't exactly holding up to their promises. BMW has dialed back the sport significantly over the last decade across most of their lineup. There's nothing luxurious/stately about a CLA/GLA. Audi has been in design paralysis for a decade... you have to be a forensic scientist to tell the generations apart. All at a premium against the likes of Genesis & Lexus. What's the value proposition there?

      So while I agree that the luxury market is absolutely saturated, complacency and incompetence by the incumbents has presented some opportunity. What do Audi/BMW do that warrants the 20-40% premium they charge over Genesis? I don't think Genesis' dealer problems are worth five figure sums.
      Because you're still spending $45,000, not an insignificant sum....on a G70. A compact car that lacks any heritage, brand recognition, original and desirable styling, reliability history, projected resale value, or really anything that could be construed as uniquely desirable above and beyond just a lower price over its competition. Even its performance, while better for the money than the competition, is not trend setting or a conversation piece (unlike the Cadillacs). It's an anonymous blob of a car more at home in an insurance commercial than parked among premium brands.

      Furthermore I think a big problem for value luxury brands is that when you lease these cars, the price difference factor is not as big.

      As far as Lexus is concerned, it has a very strong brand and a proven track record, but the effort in terms of powertrain and cutting edge platforms is not there in cars like the IS, GS, RC, GX, or LX. This is probably because Akio Toyoda took over, had the bean counters look at the product, and started focusing on the volume money makers, not realizing that ignoring your prestige products is a great way to kill your prestige brand.

      He wanted to kill the GS, half assed the RC, dragged his feet on the LS, and only built the LC because everyone in the media told him to - but the LC was poorly marketed and priced, and failures there will probably have Akio falsely conclude that it too should be killed, in favor of another ****ty entry level product like the UX or maybe that ugly city car thing they've been toying with.
      Last edited by tejlab; 09-10-2019 at 09:53 PM.

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      09-11-2019 08:24 AM #130
      Quote Originally Posted by tejlab View Post
      Because you're still spending $45,000, not an insignificant sum....on a G70. A compact car that lacks any heritage, brand recognition, original and desirable styling, reliability history, projected resale value, or really anything that could be construed as uniquely desirable above and beyond just a lower price over its competition. Even its performance, while better for the money than the competition, is not trend setting or a conversation piece (unlike the Cadillacs). It's an anonymous blob of a car more at home in an insurance commercial than parked among premium brands.
      I mean, I drive an Acura, and I see plenty of people in them. If I had $45K to spend on a luxury sedan, it would probably be between a new TLX SH-AWD Advance and a G70 3.3T. Why?

      Heritage, brand recognition? Some people don't give a **** about that (as evidenced by the existence of luxury brands without either). Desirable styling? The only good looking cars in this segment are the C-Class and Giulia. Everything else, including the German offerings, are somewhere on the spectrum of boring/derivative (3er, A4, CT4/ATS) or ugly (IS). A $45K sedan that can give trouble to a $60K BMW is a conversation starter- this was Infiniti's successful play with the original G35, remember?

      Plus what can you really get for $45K from brands with "heritage and brand recognition"? A $45K 3er/A4/C-Class is almost not even worth buying, unless you are a completely shameless brand whore. None of them are worth ~$10K more than something like an Accord Touring, and I'd venture a guess that the only reason anyone gets them at all is because of how cheap they lease for. For the same monthly payment some people would rather have a stripper Benz than a loaded Honda I guess. Value means different things to different people.

      Quote Originally Posted by tejlab View Post
      Furthermore I think a big problem for value luxury brands is that when you lease these cars, the price difference factor is not as big.
      This applies to some degree, but brand aside you still get more for your money with Genesis IMO.

      Quote Originally Posted by tejlab View Post
      As far as Lexus is concerned, it has a very strong brand and a proven track record, but the effort in terms of powertrain and cutting edge platforms is not there in cars like the IS, GS, RC, GX, or LX. This is probably because Akio Toyoda took over, had the bean counters look at the product, and started focusing on the volume money makers, not realizing that ignoring your prestige products is a great way to kill your prestige brand.
      Again, who, besides nameless experts on the internet, is begging for Lexus to make stronger powerplants? There are several luxury brands with newer, more powerful powertrains that would kill to be in Lexus' position. I would personally love Lexus to pump all their vehicles up with more horsepower, but I also see that HP is not an issue for people who actually buy new Lexuses.

      Quote Originally Posted by tejlab View Post
      He wanted to kill the GS, half assed the RC, dragged his feet on the LS, and only built the LC because everyone in the media told him to - but the LC was poorly marketed and priced, and failures there will probably have Akio falsely conclude that it too should be killed, in favor of another ****ty entry level product like the UX or maybe that ugly city car thing they've been toying with.
      I guess I will have to take your word on all that. There is def discontinuity and confusion in Toyota/Lexus' RWD portfolio. You have the old platform the IS/RC/GS is on, then the new one the LS/LC are on, and then the Zupr4. Definitely seems to be a lack of cohesion and direction there, but frankly Toyota can afford it. At this point I don't even know if it's worth the cost to align everything. Focusing on crossovers is the more rational play. Just at a quick glance YTD the RX handily outsells all Lexus' sedans combined. NX handily outsells all Lexus' RWD sedans. Etc. Pls don't tell me you're a halo car believer. Shareholders are out for blood and we're heading into a recession. Time to batten down the hatches and make money, not statements.
      Last edited by CTK; 09-11-2019 at 08:27 AM.

    7. Member DrewSXR's Avatar
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      09-11-2019 09:05 AM #131
      Quote Originally Posted by CTK View Post
      Desirable styling? The only good looking cars in this segment are the C-Class and Giulia. Everything else, including the German offerings, are somewhere on the spectrum of boring/derivative (3er, A4, CT4/ATS) or ugly (IS).
      I still think the Q50, especially Red Sport version still looks better than all these and it is probably the oldest of the bunch.

      The Giulia is pretty interesting styling wise, but I think Mercedes is turning all their sedans into bars of soap with zero styling character.

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      09-11-2019 09:21 AM #132
      Quote Originally Posted by DrewSXR View Post
      I still think the Q50, especially Red Sport version still looks better than all these and it is probably the oldest of the bunch.

      The Giulia is pretty interesting styling wise, but I think Mercedes is turning all their sedans into bars of soap with zero styling character.
      I have mixed feelings about the Q50. It's not ugly and it has a little character. But the Giulia is on a whole other level.

      You are kind of right about Benz, at least on the exterior. But their interiors are the best in the business.

      In any case, the only $45K German cars worth buying, IMO anyway, are Volkswagens (Atlas & Golf R). Well, and maybe the X1, GLB and Q3.
      Last edited by CTK; 09-11-2019 at 10:39 AM.

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      09-11-2019 11:09 AM #133
      Quote Originally Posted by CTK View Post
      I mean, I drive an Acura, and I see plenty of people in them. If I had $45K to spend on a luxury sedan, it would probably be between a new TLX SH-AWD Advance and a G70 3.3T. Why?

      Heritage, brand recognition? Some people don't give a **** about that (as evidenced by the existence of luxury brands without either). Desirable styling? The only good looking cars in this segment are the C-Class and Giulia. Everything else, including the German offerings, are somewhere on the spectrum of boring/derivative (3er, A4, CT4/ATS) or ugly (IS). A $45K sedan that can give trouble to a $60K BMW is a conversation starter- this was Infiniti's successful play with the original G35, remember?

      Plus what can you really get for $45K from brands with "heritage and brand recognition"? A $45K 3er/A4/C-Class is almost not even worth buying, unless you are a completely shameless brand whore. None of them are worth ~$10K more than something like an Accord Touring, and I'd venture a guess that the only reason anyone gets them at all is because of how cheap they lease for. For the same monthly payment some people would rather have a stripper Benz than a loaded Honda I guess. Value means different things to different people.
      Yup. We sat down and said "we want to spend about $50,000 on a family car with an emphasis on back seat comfort" and then we pulled all the full-sized, RWD sedans in the segment. Badge was never, ever a consideration for us and it never will be. We took out a 7-series, but the ride was softer and wallowed more than the Genesis. Plus, the engine was anemic. We took out the S90 (not really the same class), but Sensus was glitchy, the ride was flinty and the NVH was not competitive. The LS was a no-go right out the gate because Lexus' infotainment system is cancer and the air suspension is a money pit. The Continental wasn't on our radar because no thanks to a $50,000 stretched Fusion. CT6 was also out due to GM's political actions. That left the S550, A8L and G90. Both the A8L and S550 were faster, but given we just had a reliability nightmare with the VW, we were really apprehensive with high end Germans. That left the G90: executive rear seat package standard, same NVH as the Mercedes, better ride/handling balance than the BMW, NA V8 that is reliable and has the technology we wanted. That it happens to have a Korean badge was tangential to us.

      Different people have different preferences. I would buy a V6 1LE over a Camaro SS because it ticks all the boxes for me. I would consider an Acura RLX if it wasn't ancient inside.

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