Cliff Banks - The Banks Report

Lexus to Begin One Price Test

April 1, 2016 — Despite most of its 236 dealers not in favor of offering no-haggle pricing, Lexus will begin piloting a one-price initiative at 11 stores within the next few weeks, says Jeff Bracken, general manager for the luxury automaker.

Lexus has spent more than two years designing the program, called LexusPlus, along with six months of training dealership personnel, Bracken tells the attendees at the J.D. Power Automotive Summit in Las Vegas yesterday.  In addition to offering no-haggle pricing, customers will have one person from the dealership to interact with throughout the entire sales process and any service work during the ownership cycle.

The program will be in place for about a year at which point Lexus will determine whether to continue it and expand it to other dealerships. However, Bracken has emphasized in the past that Lexus will not force the program on all of its dealers.

Lexus will also begin testing ways to reduce the time customers spend in the purchase process in the showroom. Bracken says Lexus doesn’t have a set target in mind for how long the process should take, but does know it has to get shorter.

The overall goal is to increase the level of customer experience at its dealerships as the brand continues to roll out “more emotional products” the next few years.

A mix of dealers ranging from small to large in different geographic markets are participating in the pilot program. Lexus believes the program will enhance dealer profitability; reduce employee turnover; increase local market share and improve customer retention.

Lexus came in second in overall luxury sales in 2015 in the U.S., only 1,422 behind BMW. But it finished first in overall registrations, according to data from IHS Automotive, with more than 3,000 than runner up Mercedes Benz.

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