What's the difference between a Camry and a Lexus?

February 3, 2012 1:40 PM

A Camry and a Lexus are basically the same car. What's the REAL price difference?

I'm doing a business presentation where I talk about brands, and how similar products are separated by branding - Coke vs. Pepsi, Microsoft vs. Apple, etc.

I've found that Toyota uses "twinning" -- using the same chassis for two different cars, the Camry and the Lexus. So basically they're the same car, but with a $10,000 difference in cost.

But I was wondering: how different are they? Does the difference in engine or fuel injection come with a price tag? What about interior and electronics? Is the difference really $10,000 or more like $3,000?

This stuff is beyond me and isn't readily available online. Can any car buffs out there tell me what the real price difference is between the 2012 Toyota Camry and the 2012 Lexus ES350?

Thanks.

posted by Flying Saucer to Travel & Transportation (23 answers total)

Part of it is a difference in customer service. A friend whose last 2 cars have been Lexus SUVs talks about being treated like royalty by the dealer whenever he's there.
posted by jon1270 at 2:01 PM on February 3, 2012

Among other things, the "road feel" is different.

I drive a Volkswagen, which handles pretty sportily, but it's not quite as sporty as Audi, and certainly not as much as a Porsche.
posted by ablazingsaddle at 2:06 PM on February 3, 2012

One of the biggest differences you'll notice between a Camry and its Lexus cousin is sound insulation.
A Lexus is much quieter.

Also, they tend to come with more gadgets as standard (bluetooth, nav, heated seats.)
You can also add more toys (adaptive cruise control, secondary start system, better radio).

The perceived prestige also plays a part in the added cost as does the perceived luxury.

So, yes, the underlying structure is the same, but what is built on top differs significantly. Whether or not that's worth an extra $10k, well, that's one of those questions only you can answer.
posted by madajb at 2:08 PM on February 3, 2012 [2 favorites]

Differences in the trim and gadgets can add up and it's not all visible. I was in a colleague's Lexus the other day. It wasn't a 2012, because he's had it a while, but it was whisper quiet in the cabin. I don't know what they do it or how they do it, but that level of quiet is my new top requirement in any future car buying decision.
posted by IanMorr at 2:09 PM on February 3, 2012 [1 favorite]

A lot of manufacturers have cars that share the same chassis. Car ≠ chassis. There any many many parts that sit on top of a chassis to make a car. Even paint quality is a huge difference between the brands.
posted by wongcorgi at 2:12 PM on February 3, 2012 [4 favorites]

I wonder what percentage of people who get the 2012 Camry get the one on the same chassis as the Lexus (the 3.5L V6) and how many opt for the cheaper 2.5L 4-cylinder?
posted by muddgirl at 2:12 PM on February 3, 2012

As noted, the ES 300 and Camry share the same platform - along with the Avalon and even major bits with the SUV RX (until last generation - now its based on the Highlander). This means that they share engine/tranny/frame design and parts. The first through fourth generation Lexus ES sedans also shared body styling elements with the Camry, but each generation has seen fewer and fewer similarities between cars. The ES is no longer an extra nice trim level of the camry - they have been substantially different for several generations and you can see some of the differences in a picture here.

As for branding differences:
Current branding differences include much lower build tolerances on the Lexus, which is built in Japan, no shared sheetmetal, very different interiors, different suspension, and a whole bunch more kit is built into the ES. Is it worth the extra $$? Part of the price difference is the import factor - the Camry is built state side. The ES has "nicer" interior, a sharper look and these things typically command a premium beyond the extra kit that the Lexus is packaged with.

As far as price/brand discrepancy between cars sharing platforms I think that the ES vs Camry isn't a particularly notable abuse of branding/upselling, in part because the Camry isn't particularly cheap and the ES not particularly expensive, but there certainly remains a price premium on the ES that could only be the result of branding.
posted by zenon at 2:36 PM on February 3, 2012

You need to separate cost from price.
Something that is priced at $10k with a 50% gross margin has a $5k manufacturing cost. I believe car manufacturers price their least expensive models and most stripped down versions close to "at cost" and make it up on their higher end models. I would imagine that Toyota's margins on Lexus vehicles are higher than on the Toyotas.
posted by elmay at 2:36 PM on February 3, 2012

using the same chassis for two different cars, the Camry and the Lexus. So basically they're the same car

Not at all, actually. The chassis is just a large component that is expensive to tool up for, develop and build so having it common is just good sense. It dictates the external shape to some degree, which is why they also look similar, but there is massive scope for variation in internal components, engines, tuning levels, transmissions, suspension design and components (including extended expensive development to further improve the ride over the basic versions) , trim levels and seat comfort, sound insulation/NVH choices of materials.

It's not as simple as 'these cars are equivalent and so the difference in price is largely because of prestige'. The profit margins may be different (I imagine Lexus's mark up is higher then Toyota, but not necessarily by much). The cost saving across both models could be as a result of using a percentage of common components and so saving in terms of unit cost through volume and allowing the Toyota to be sold cheaper in order to compete in the market with a better product.

In short, it's going to be very, very hard to make the equation you are making as the basic premise (two similar/identical cars sold as two different things through brand) is invalid.

Sorry.
posted by Brockles at 2:39 PM on February 3, 2012 [6 favorites]

What you are looking for is "rebadging" or Badge engineering, and having given it a though I would argue that Audi/Porshe is the king of taking a VW and shining it up ( Cough Touareg Cough Cayenne - which are even share doors*), although GM certainly should get a gold star for their efforts.

*in this situation it's the over priced Porsche that's the lemon! Turns out engines need oil in them.
posted by zenon at 2:50 PM on February 3, 2012

You can compare the Camry to the Lexus on the Lexus website. The "comparably equipped" Camry XLE V6 (same engine as the Lexus) costs $32,500 while the Lexus is $37,600.

What does $5,100 get you?

- Lexus has a standard warranty that's 12 months longer than the Toyota's
- Lexus has wood trim on the interior, which is not available on the Toyota
- Lexus has exterior mirror memory settings, n/a for Toyota
- Lexus has Optitron Electroluminescent Instrumentation (lulz), n/a for Toyota
- Lexus has front airbag occupant sensors, n/a for Toyota
- Lexus has rain-sensing windshield wipers, n/a for Toyota
- A few optional Lexus items that are n/a or optional for Toyota: "Telematics" roadside assistance, cooled front seats, adaptive cruise control, extra wood trim bits
- Lexus is slightly longer, has slightly more leg and hip room and a bigger fuel tank
- Lexus is slightly heavier and has slightly worse fuel efficiency (-2 mpg diff)

I'd bet the "retail" value of all those differences probably add up to $5,100, but most are fairly frivolous items. The customer service and ride/noise characteristics don't have an obvious dollar value but are probably more relevant than what I listed above.

Still, a fully-loaded Camry is pretty damn nice and $5k is a big enough "discount" to make it a tough choice.
posted by mullacc at 2:50 PM on February 3, 2012 [4 favorites]

This is a widespread practice. Honda and Accura also have the same relationship, as does Nissan and Infiniti. In the 60's and 70's General Motors sold through Chevy, Buick, Oldsmobile and Pontiac. The were all selling more or less the same cars with slight differences in trim levels, engine choices and minor design differences. For the few years that Ford own Jaguar the Jag sedans were built on the same platform as the Ford sedans.
posted by doctor_negative at 2:55 PM on February 3, 2012 [1 favorite]

This isn't answering the question, but Noka chocolates were once the most expensive chocolates in the world by a factor of 10. The whole thing was a branding scam exposed by a local food blogger. The whole (long) story is here.

This may be relevant to a discussion on branding.
posted by cnc at 3:40 PM on February 3, 2012 [2 favorites]

Response by poster: I apologize for not being clear.

What I'm asking is, how much does a Camry, and a Lexus, cost the company to make?

The difference in price is $11,100. Does that mean the company makes $11,100 more on the sale of a Lexus than the sale of a Camry? Or is the Camry price the "real" price? If the difference isn't really $11,100, then what is it?

Thanks again for your efforts.
posted by Flying Saucer at 4:12 PM on February 3, 2012

My gawrsh, that was a highly unfair slamming of Noka imho. Although it gives some little insight into branding. Note, I would never buy $309/lb. or $854/lb. chocolate anyway. It's common for smaller brands to have larger companies make stuff to the small co.'s spec. Or vice versa. (Apple and Foxconn, say?)
posted by caclwmr4 at 4:34 PM on February 3, 2012

"cost the company to make?" is a pretty imprecise question; you have to consider whether you are including parts and labor, engineering, shipping, overhead, marketing, etc, and the figure might vary depending if you leave things out. The raw parts cost of the Camry might be $12,000 and the parts cost of the similar at first glance Lexus might be $13,000 but that doesn't give you a decent answer.

As someone noted above, you can expect the margin on Lexus is higher. So for example the $35,000 Camry may have 10% profit margin to Toyota, the $45,000 Lexus may have 15% margin due to the higher end branding, before taxes. Roughly crudely speaking.
posted by caclwmr4 at 4:43 PM on February 3, 2012

This is not really a good business question. I'm sure Camrys have a lower margin, but Toyota sell a lot more than Lexuses.

If you're giving a business presentation where the question is "What's the REAL price difference?" maybe dealer price is one indication, however for me the correct answer is "Whatever the customer is willing to pay."
posted by carter at 4:52 PM on February 3, 2012

My gawrsh, that was a highly unfair slamming of Noka imho.

Actually, the Noka case is a really good example of exactly what you are trying to get at with the car example (which is, I think, a dead end: car manufacturers are just as reluctant to release "real costs" of cars as Hollywood producers are to release "real costs" of movies). With Noka, they were taking widely available chocolate at price point A, clumsily refashioning it into smaller pieces, and reselling it for vastly inflated sums by giving deeply misleading descriptions of what the product was.

This really was a perfect example of brand magic being used to sell a product that you could purchase down the street for a fraction of the price.
posted by yoink at 4:59 PM on February 3, 2012

seconding that being manufactured in japan (lexus) vs. america (camry) is huge. sorry i can't give you $ numbers but i'd imagine wages, cost of the land and factory itself and a million other little factors would be more expensive in japan. in return, you get a car that's actually built in japan. japanese designed products, toyotas in particular, are well designed and often tend to last. japanese built products are just about indestructible - my parents have a lexus suv that's still running without a hitch after 10 years, and i owned an old, last-generation-toyota-to-actually-be-built-in-japan corolla, it had like 250,000 miles and never once needed a repair in the 4 years i drove it. (ok ok i know this is a sample size of two, but) the same could be said for my japanese import technics dj headphones, our old 70's sony cassette radio, etc etc japanese built products are sought after worldwide, and generally considered to be worth the extra money.
posted by messiahwannabe at 6:51 PM on February 3, 2012

I wonder what percentage of people who get the 2012 Camry get the one on the same chassis as the Lexus (the 3.5L V6) and how many opt for the cheaper 2.5L 4-cylinder?

To be clear, "the chassis" can be a somewhat generic term in this context, but it specifically means the metal structure on which the engine, body, and other components sit. The choice of engine does not change the chassis -- that's the point of using a common platform, because it saves manufacturing costs.

The difference in price is $11,100. Does that mean the company makes $11,100 more on the sale of a Lexus than the sale of a Camry? Or is the Camry price the "real" price? If the difference isn't really $11,100, then what is it?

The parts price might be that much less, but that doesn't make it the "real" price. With brands there are intangibles, such as the mere fact of owning the brand (which in many cases translates into social capital: "Wow, he drives a Beemer."). And then there are the less intangible costs, say of labor, or shipping. GM, pre-bankruptcy, was infamously saddled with the costs of retiree health insurance for a company that was once twice its size; it also spent the highest man-hours per vehicle in the industry. But then GM was also selling Yukons and other big SUVs like hotcakes for a 5-figure profit per. If you are truly interested in going down this rabbit hole, there are experts out there in auto-science land who study this sort of thing and can give you exact figures.
posted by dhartung at 5:02 AM on February 4, 2012

There's certainly a case study in product differentiation to be had here, but you couldn't per se call it as being about branding, because of all the differences between the various cars that share the platform. If you're interested in brand differentiation across vehicles with shared platforms, and OK with looking at the European market a bit, then, like b1tr0t said, looking at what the Volkswagen group do from SEAT ('sporty' budget image) to Škoda (sensible, no frills, reliable image) to VW (sensible, reliable, classic) to Audi (luxury). Looking at that with the cars that share the Golf and Passat platform would probably give the best scope for a presentation.

But they're all different cars. Look at the GM K-cars of the 1980s for getting the branding issues very wrong. Particularly the Cadillac Cimarron.
posted by ambrosen at 6:58 AM on February 4, 2012

To be clear, "the chassis" can be a somewhat generic term in this context, but it specifically means the metal structure on which the engine, body, and other components sit. The choice of engine does not change the chassis -- that's the point of using a common platform, because it saves manufacturing costs.

In the case of vehicles, the term chassis means the frame plus the "running gear" like engine, transmission, driveshaft, differential, and suspension.

The metal structure is just called the frame.
posted by muddgirl at 7:28 AM on February 4, 2012

Even if you were to somehow have access to all the information available within Toyota on vehicle line costing you wouldn't really be able to come to single, good answer to your question.

Even if you narrow the question down to something more answerable - say you only talk about pure materials cost - you'd need to find a parts list of a Toyota and compare it to the parts list of a Lexus - the prices of which are, of course, completely confidential between Toyota and the manufacturers, and subject to complicated volume / pricing / exchange rate / commodities contracts.

Pure materials is only half the story though, and you have a lot of other costs (and revenues!) which are difficult to quantify. For example, maybe a Lexus generates $3000 more than a Toyota in lifetime warranty and parts replacement - are you going to factor that in? But at what discount factor for those uncertain future income streams? How do you treat tooling amortization costs when vehicle line lifetimes and volumes are uncertain?

Also, this is fundamental to your question - the price difference you see as a customer isn't what the company makes. Toyota and Lexus don't sell cars directly to customers: they wholesale cars to dealers, who then retail them to customers. A Lexus may "cost" you $11,000 more, but it probably generates only $7500 more revenue to the company compared to a Toyota - the rest is taken by the dealer.

As a more direct answer to your question: The Toyota and Lexus you are comparing are most certainly "NOT" the same car at all. Say you started with the Toyota, and wanted to design and engineer that Lexus, that would have cost at least a hundred million dollars. There is no way anyone working in the auto industry would think they are the same car.
posted by xdvesper at 9:08 AM on February 4, 2012