Cars.com's Kicking Tires blog reports a low supply of the badge-engineered Toyota Land Cruiser Lexus LX570. The big rig's specs are impressive enough to bring tears to any fan of a full-figured SUVs: 5.7-liter DOHC V8 good for 383hp and 403 ft.-lbs. of twist, 8500 lbs. towing capacity, and a manufacturer claimed 0 – 60 time of 7.4 seconds (presuming the only ass you're hauling is your own). The LX570 starts at $74,700 and ascends from there, from the Technology Pack ($4200) to rear DVD ($1990) to cargo net ($64). The not-so-PC-SUV guzzles gas at a wallet-emptying EPA rating of 12/18 city/highway. Given the temper of the times (i.e. gas prices), it may come as no surprise that the upmarket LX570s is outselling its downmarket Land Cruiser cousin by 50 percent. We're talking small numbers, though. "Lexus doesn't build 60,000 a year; rather, less than 10,000,” Global Insight analyst Aaron Bragman reveals. “If the high-volume Chevrolet Tahoe was down to a four-days supply with gas at $4 a gallon, it would be a different story. It's not that demand is high… supply is kept low so that the LX 570 is at a four-days supply of unsold inventory rather than at 100 days and has to be discounted."
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With gas prices at current levels, keeping the LX570 in short supply is a good idea.
If GM stopped making Truck based SUVs today, they would not get to the four day supply level before the things were old enough to ship to Russia as duty free used vehicles.
Keep supply near demand- what a novel idea. I imagine there are some manufacturers who are envious of Lexus’ ability to accomplish this.
Jeff Niman :
May 29th, 2008 at 10:57 am
Keep supply near demand- what a novel idea. I imagine there are some manufacturers who are envious of Lexus’ ability to accomplish this.
On the contrary, a 4 day supply means they’re NOT keeping supply near demand. Not even close. Instead of an oversupply, they’ve decided to piss off well-healed customers who can’t find an LX570 to buy. Great strategy.
I bet CAFE plays a role in this as well. The Tundra is a thirsty beast and selling in large numbers. Prior to the new Tundras introduction, the Land Cruiser/LX750 were the least efficient Toyotas. The Tundra must be dragging down their fleet average in spite of the Prius; hence a reluctance to build more Land Cruiser/LX570s which are less important than the Tundra, strategically.
Lexus can keep this going because they only sell very small numbers of them and they don’t rely on this model to rake in the income needed to develop new models.
Plus, they didn’t do a lot of developing on it anyway since it’s a badge engineered LandCruiser. It’s a very niche product that they basically can built upon order.
Personally I think the LandCruiser is overpriced already so this thing is rediculous, but at the same time I understand people buy this and not the LandCruiser. It’s one of those cases of well if you are going to buy a LandCruiser anyway, might as well go for the LX570.
Would be interesting to see 4-day supply on the IS…
This is the beastie my wife wants to trade her RX in on…maybe I can tell her they’re just too hard to get?
“This is the beastie my wife wants to trade her RX in on…maybe I can tell her they’re just too hard to get?”
You are not in enviable position. I think marriage counseling might be in order. Maybe buy her some jewelry. It is just as expensive, but it doesn’t need gas.
IIRC the Lexus LX has always sold in limited numbers as does the Land Cruiser. These are speciality vehicles and Toyota has always treated them as such. That is why Toyota created the simpler, larger, and less expensive Sequoia to take advantage of the SUV craze in America.
I beat Toyota is producing enough to satisfy its hard-core Land Cruiser/ LX fanbase and is making a handsome profit on each sale. Now the question we need to ask in the USA is, Is Toyota limiting USA sales due to a soft dollar and are shipping the majority of LXs to the middle east and other more profitable markets?
Nintendo is currently doing exactly that with its Wii systems. While there is still a shortage in the USA, in Europe and Asia they are readily available. Orginially in 2008 the USA was to get 700,000 units shipped here. Nintendo has cut that back to only 400,000 units because the porfit margin is higher elsewhere.
Wow, I guess we aint the cat’s meow anymore!
Toyota has never had any CAFE problems, and never will. They regularly beat all three numbers (imported cars, “domestic” (including those made in Mexico and Canada) cars, and “light trucks” (only one number for them)).
It’s easy to see why. Take the light truck category. The RAV4 is the most fuel-effieicent non-hybrid SUV. Toyota sells thousands of actual hybrid SUVs each month. Plus, I believe they can call anything that has rear seats that fold down to make a flat rear storage area (such as the Scion xD or xB or the Toyota Matrix) a “light truck” for CAFE purposes.
CAFE is not the reason for the shortage here. It’s probably simply the high demand of a new model.
“This is the beastie my wife wants to trade her RX in on…maybe I can tell her they’re just too hard to get?”
DUDE! ( I can say that I’m 19) your wife is going to run your wallet and her gas tank dry. My dad has a Tundra and it’s getting parked 4 days a week while we take the Motorcycles to work and to school.
A 45 mpg Honda Shadow (1100 Sabre) sure beats an 18 mpg behemoth that you cant find a parking spot for!
Seriously people, motorcycles are becoming a very real proposition! If you don’t want to get rid of your SUV but you can’t pay that gas bill, get a bike that can handle highways and get 40 or 50 mpg. (i recomend at least 750cc’s
According to J.D. Power the LX had the quickest RTR in April at 8 days. ASP was $82,800.