"LJ909" (lj909)
12/03/2018 at 12:26 • Filed to: None
1
5|
"LJ909" (lj909)
12/03/2018 at 12:26 • Filed to: None | 1
| 5 |
Subscription programs seem to be all the industry rage now. Mainly because these companies think that this will appeal to us Millennials. Personally, I think they are dumb marketing gimmicks putting niceties on a glorified lease with a marketable name. But that’s besides the point.
!!!error: Indecipherable SUB-paragraph formatting!!! that their after speaking to Lexus marketing chief Cooper Ericksen at the LA Auto Show, he stated: “ I think there’s a lot of unanswered questions about how you take a depreciating asset and have a revenue model that is good for the consumer and good for the brand over the long term of that asset “. He’s exactly right and I think this is the question that no one is asking regarding these subscription programs.
The article states that the closest thing Lexus has is something I was unaware of called the Complete Lease Program that balls maintenance, insurance, tire protection and in vehicle services in with one 2 year lease. The weird thing is is that, like I mentioned earlier with wanting to target young people, its only available on the new youth targeted crossover thing, the UX. And dealers set prices which is...different.
Newport Lexus
Ericksen also stated that dealers will also have the final say so regarding whether or not they will go forward with a full fledged subscription service due to them wanting to maintain the close relationship with the customers.
With the recent cancellation of Booked By Cadillac, do you guys think its a good idea for Lexus to get in on Subscriptions? Or is it ultimately just an industry trend right now?
Future next gen S2000 owner
> LJ909
12/03/2018 at 14:07 |
|
Subscription Program: Fancy words for very expensive factory rental service.
These things will die out when people realize how horrendously expensive they are and the automakers realize there isn’t the volume to cover the overhead and make any money .
|
LJ909
> Future next gen S2000 owner
12/03/2018 at 14:17 |
|
This is what I’m hoping. But you’re exay right. They are automaker backed rentals for 3 kinds of people: people with too much money and not enough sense to see these aren’t good deals; people too broke to buy a car outright but enough to blow it; and people that just don’t want the outright obligation of financing or the limits of a typical lease.
WilliamsSW
> LJ909
12/03/2018 at 14:19 |
|
I think this is spot on:
“ I think there’s a lot of unanswered questions about how you take a depreciating asset and have a revenue model that is good for the consumer and good for the brand over the long term of that asset “. He’s exactly right and I think this is the question that no one is asking regarding these subscription programs.
The math just doesn’t work - and all the more so for luxury brands. If you’re going to offer flat rate insurance, then by definition, you’re targeting younger city dwellers (ie, people with low insurance costs will self-select out).
That group either a) needs a car only occasionally, so Zipcar/Enterprise can fill that niche; or b) doesn’t really need a car at all; or c) needs a car, but probably doesn’t need to swap it regularly. That last group probably puts a lot of hard miles on a car, too - commuting to a suburban job, etc. I speak from experience on that group.
On top of all that, city dwellers are often more pragmatic about the car they choose - and doesn’t necessarily want to spend the extra $ on a luxury brand. It might make more sense for Toyota to do this than Lexus, I think.
So I think it makes sense for Lexus to sit this out - however, the counterargument to this is that Lexus’ target market is pretty damn old. They (and Toyota) need to find ways to attract younger customers.
|
LJ909
> WilliamsSW
12/03/2018 at 15:26 |
|
Exactly right on all points. The depreciation hits luxury vehicles the most. What doesn’t make sense to me is that it’s the wrong brands that are doing these programs. It also points to a wider problem of everyone and everything now targeting people with money or luxury lives.
It would make more sense to have something like this on a CH-R than a UX especially considering these companies and auto journalist seem to think that we Millennials are all city dwelling hipsters with good jobs when in reality we’re all broke and saddled with enough student loan debt individually to buy 2 Lexus’.
|
WilliamsSW
> LJ909
12/03/2018 at 18:40 |
|
Mo st of their target audience has either no car, a 2009 Civic, or a rusty XJ, TBH.
I predict failure...