Lexus Manila president explains why fixed pricing is important

Let's hope the competition reads this
by Vernon B. Sarne | Mar 15, 2013

Lexus Manila

If you regularly check out our buyers' guide, you are surely now familiar with the phrase "available (or price) upon request." That's what we put for cars--usually high-end ones--whose local distributors refuse to divulge their price list. The usual excuse that these distributors give us is this: They can't provide official pricing because the exchange rate (usually euro to peso) is often fluctuating.

We've always taken that excuse with a grain of salt, wondering how come importers and sellers of some European brands (like BMW, for instance) are able to release official prices for their vehicles. And then we had a chat today with Lexus Manila president Danny Isla on premium-car pricing. True, Lexus vehicles are not sourced from Europe, and the fact that they come from Japan allows them to benefit from the tax break afforded by the Japan-Philippines Economic Partnership Agreement. But hey, the yen-to-peso exchange rate can be pretty unstable, too.

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But Lexus Manila is committed to a fixed-pricing policy. They're able to publish an official price list because they don't alter their pricing from buyer to buyer. It's called transparency, something that customers appreciate.

"Our pricing is one and the same for all customers," Isla told "Imagine if you sell a car to one customer at a certain price, and then sell the same model to another with a hefty discount. Word is definitely going to spread around. Many of our customers belong to the same circles."

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That won't be good for business, in other words.

Which gave us an epiphany. Maybe, some local distributors of high-end cars do not declare official prices because they want the flexibility of adjusting said prices depending on the buyer. And considering how the markup for luxury vehicles is quite high, there's a lot to play around with in terms of profit. Either this or they don't want the BIR to know how much they're really making.

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There's another advantage that comes from implementing fixed pricing, according to Isla. "The distributor's executives will no longer be bothered by their friends or acquaintances asking for huge discounts," he pointed out. "They can always say that their pricing is uniform."

This brings us now to this bit of advice: When buying a luxury car, trust only a distributor that releases an official and fixed price list regularly. Because you know you won't get screwed, and because you're sure the distributor is paying taxes correctly.

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