Adventures in Car Buying - Lexus CT200h

The first car I brought home for an overnight test drive was a 2012 Lexus CT200h. A compact hatchback based on the Toyota Prius, the CT200h does a couple things outrageously well, and one thing quite poorly.

But before I get into any of that, I feel compelled to discuss two topics that I myself have spent years trying to digest:

On badge engineering

In short, badge engineering is the ubiquitous practice of borrowing a model from another manufacturer and then slapping your name on the outside, often with little or no additional customization.

Examples of badge engineering

• Acura ILX = Honda Civic
• Lexus ES350 = Toyota Avalon
• Lincoln MKS = Ford Taurus
• ad nauseam

I approve of the concept on principal; if your blue-collar model is refined enough for your white-collar consumer, well done you. Everybody wins. But the smaller the difference between these two models, the more closely must the buyer examine his motivation behind choosing the more premium brand. Especially when a non-trivial cost difference is involved.

There are myriad ways to justify that cost difference without ever addressing egoism, but I think this is disingenuous at heart, so I won't list them here.

Which leads neatly into the next topic:

On premium brands

Premium brands exist entirely along the segment of the diminishing return curve where total return on investment as a proportion of the total investment decreases. Put another way, when you buy premium you're getting less for more, relative to a non-premium counterpart.

In reality the core value proposition of premium brands is that they are out of reach of a given percentage of the population, and so by extension are those who buy them.

So ultimately, would I buy one?
Yesssssssss.

Why?
Because we can afford to right now, and all the ugliness that implies.

On the intersection of premium brands and badge engineering

The CT200h, henceforth referred to as the Lexus Prius, really is a lovely little thing; but it is defined by the contradictions it holds within the whisper quiet cabin.

The Lexus Prius is chic but not sexy. Isolating but not numb. Exclusive but not unattainable. The Lexus Prius is Helen Hunt in As Good as it Gets.

Drive the Lexus Prius and ambient noise fades away, like the moment before a pressure induced yawn on an airplane. Front seats are perfectly sculpted with excellent mid-back lumbar support. You'll have to fight to get fewer than 40 highway MPGs because the car will always default to Eco mode.

This is the perfect car for two people on a cross-country adventure. This is not the perfect car for three people on a cross-county adventure. Back seat room is a bit confined, as per usual in this class.

So why didn't this one work? At the end of the day, this is still a Prius, and that means reigning in fun to boost fuel economy. And Nura wanted something a little bit hotter.

Adventures in Car Buying - Backstory

I am addicted to cars. And trucks. And motorcycles. And occasionally bicycles, modern and vintage wrist watches, tablet computers, cell phone cameras, running shoes, dog breeds, airline tickets, jackets (rain, winter, and leather), hi-fi stereos, or anything else I happen to desperately need in that moment.

My addiction is fed, but indeed never sated, through endless searching; stating and restating requirements describing vague and fleeting moods with the goal of either identifying the perfect thing, or determining at what cost that thing should be bought.

Stimulation and pleasure are found in the hunt, and then in the kill, rather than from hanging a trophy on my wrist or parking it in the garage.

But I now find myself in the position, and oddly uncomfortably so, of needing to finally commit and transact on a car for Nura.

I say uncomfortable because for me the perfect car changes not on a yearly or monthly basis, but on a daily and occasionally hourly cadence. On Monday morning at 9:00, the most perfect car in the world; the quick and quiet, capable and reliable, sexy and understated machine that will literally bring about world peace is a clear and unconscionable error in judgement well before noon.

Normally I would simply defer to Nura to pick out the car. It will be her daily driver after all. But few things in this world register as less appealing for Nura than car shopping.

List of things Nura would rather do than shop for cars:

• Hang out at Wal-Mart
• Volunteer customer service
• Putting down pound puppies
• Talk to vegans

And so the task falls to me: Identify a car befitting of her current and potential future needs, is exciting for her, and fits the budget.

I'll try to talk about the process and the findings here until we finally buy.


List of potential cars for Nura:

Pontiac Aztek

Trix Donk

Nissan Juke

Toyota Prius

Consider the Supra

Things I like:

• Salted caramel almost anything
• Espousing uninformed, misguided, authoritative sounding dribble
• Cappuccinos – not salted caramel though

I already had a cappuccino today, and I think I’m getting fat from sugar, so I guess that leaves me with adding confusion to a topic I know nothing about.

The Toyota Supra

I mean, I know a little about it: I can spot one in a crowd, and I can read about it on Wikipedia. But I don’t know most things – like development costs, profit margins, or target market demographics. The exact things needed to make the following statements even remotely plausible.

1. Everybody and their mother killed the Supra in a great big team effort
2. There are non-car people working at Toyota and they should quit
3. Nissan is doing one hell of a job keeping the dead Supra dead

Lemmesplain

In 1997 everybody had lots of money and they were all ready and willing to spend. It was the middle of the longest continuous economic expansion in US history, oil was back to cheap after the gulf war, and the Yen was dive-bombing suffering during the Asian financial crisis.

Americans could finally afford a little something extra in the automobile department, and we figured the bigger your SUV, the thicker your pen is to write checks. Anyhow, that was the beginning of the large SUV and the end of the berserker Japanese sports car. For a while.

Ten years later, in 2007, the number of sports car models Toyota sold was exactly zero. For the first time since 1969, Toyota offered no sports or sporty cars. The last of the breed, the Celica, was axed only the year before. And no, the Scion TC doesn’t count. From a styling and performance perspective, it never quite fit the bill.

Toyota Models

But the story isn’t over there. Or at least I hope it isn’t. We still have an appetite for the sports car, so why won’t Toyota satisfy us?

Well, they’re starting to. Kind of. The GT-86 is a serious step in the right direction, but it wasn’t all Toyota, was it? The cost-sharing program with Subaru demonstrates that someone at Toyota still isn’t willing to take on that risk alone – someone at Toyota believes the spreadsheet should dictate which cars to R&D, and which cars should take up space on dealer lots. Someone at Toyota still doesn’t believe in the sports car, and they need to go.

But at the end of the day, the GT-86 was green lighted, so Toyota is willing to at least test the waters once again. Good on them. However, something else happened in 2007 that, I suspect, is now the only reason for keeping our filthy little hands away from the new Supra.

Nissan’s GT-R

It’s long known that Nissan and Toyota ignored their own gentleman’s agreement to limit horsepower in the Skyline and Supra, meaning at one point Toyota cared enough about their own car, as well as the other guy’s, to lie to various governments and to the population at large. And god bless them for it. Seriously.

It’s probably a safe bet then that, when it comes to resurrecting the Supra name, Toyota won’t do it until they have something that’s competitive, once again, with the old rivals. And good lord have you seen what that GT-R can do? You have to step into something truly exotic to fell Godzilla, and whatever that thing is always makes the Nissan look as tall as a minivan.

The Supra will almost inevitably be a loss leader, which to bean counters is impossible to imagine, so let me explain how this will work through the magic of metaphor.

The Supra is a man. A big man, with big arms and a big chest and a big beard. And he’s angry and he throws a chair through a window.

Now, you would think that a big man with a temper should be terrifying, right? That people would run away in fear? Well, if the man is handsome enough, and the Supra absolutely was, an odd thing happens: That big, scary, hairy man has lots of sex with lots of women. Additionally, there will be many more women who want to have sex with the scary man, but are already married. So they go home and have fantasy sex with their noodly armed husbands.

In this case, we the car-enthusiast buying public are the horny women, and the noodly armed husbands we want to have sex with are other Toyota models that we end up buying, and it’s at this point that the metaphor breaks down. But you get the point.

Just do it, Toyota!

Autonomous Mobility

Give it 12 years. 2025 is a nice, round number.

I’ve been thinking a lot about the inevitable automation of cars. I think that full automation – not touching the wheel, gas, or brakes – is closer than most people think. There will be a number of factors keeping broad adoption low to begin with, but from a commercial availability perspective, it’s right around the corner. Though when I say available, I’m somehow not saying on sale to the consumer. But I’m getting ahead of myself.

There are plenty of moving parts that march us ever towards this new relationship with vehicles; I’ll try to name as many as I can before I feel the need to admit I don’t know what the fuck I’m talking about.

Cars are getting smarter

The tech needed to support fully automated cars exists right now, and already has hundreds of thousands of proof-of-concept miles in the bag tank trunk. Companies like Google, VW, and Toyota have had driverless cars quietly moving around cities and highways for a few years, to wildly safe success.

Much of that same tech is routinely baked into current consumer vehicles, but packaged as individual safety or luxury features. Brake assist, lane departure warnings, anti-fatigue measures, and pedestrian avoidance systems are commonplace. Steer by wire, super cruise, and intricate arrays of advanced sensors and cameras are coming on line more and more. Each of these features use the same technological underpinnings that are needed for fully autonomous cars.

All this boils down to one quiet yet important fact: You can buy a Mercedes, today, that can drive itself in stop and go traffic; speeding up, slowing down, and going around corners, without your input. Tomorrow you can buy an Audi that finds a parking spot in a garage after you’ve gotten out and gone inside somewhere. And to a computer, the difference between 5 mph and 75 mph isn’t nearly as big as it is to us.

We’re not getting any better at driving

We suck at driving. All of us. Even you. Compared to machines your situational comprehension, reaction time, decision making ability, spatial reasoning, and object permanence is embarrassing. Unfortunately, all of these are extraordinarily important components in being able to drive well. On top of that, modern cars and the roads they drive on are get better, which means average speeds are increasing, shrinking our precious margins of error.

How long will it take the insurance industry to recognize, in miles driven before a wreck, the difference between an autonomous Prius and a 16 year old with a hashtag addiction? Or an octogenarian with undiagnosed Alzheimer’s? Or any male under the age of 35? Seven weeks is my bet – a month to generate the numbers, a week for analysis, a week to double check that analysis, and a week to draft new policies for automated cars.

There are other nickels and dimes to be saved

Besides the insurance savings, less will also be spent on gas. Initially, smarter routing based on real-time traffic updates, and smoother mechanical operation (acceleration and breaking), will boost individual MPG returns. Rerouting around accidents will become a trusted component and barely even noticed by the driver, so time spent in traffic will decrease. But when you scale up adoption city wide, and then to a national level, the 5% lift in efficiency you found individually will be dwarfed by what comes next.

Take the morning commute for any major city: When a certain percentage of cars automatically execute on the fastest route to anywhere, the burden of traffic will ease exponentially. This will raise the average speed on any given street or highway, adding efficiency to every car on the road. This is to say nothing of the fact that accidents will become fewer and farther between, further pushing down traffic load. Taking all the gains found at the city level, from a national perspective a measureable ease in fuel demand will occur, and the market price will drop.

Nice.

There are a number of other reasons to adopt this tech, but as it turns out I don’t know what the fuck I’m talking about (made it 700 odd words). I’m also itching to get to the big one.

Commercial Industry Incentives

Insensitivity warning: Insensitivity ahead.

There are lots of professional drivers out there. Millions of ‘em, in fact, making their living and supporting their families as long-haul truckers and delivery drivers. Each year they move goods nearly a quarter of a trillion (trillion (with a fucking T)) miles in the US alone. And those muhfuggas are expensive.

Do you have any idea what $.40/.25Trillion is? I do. It’s the annual number of dollars that trucking companies pay their drivers. Or taken another way, it’s the number of dollars tacked on to goods purchased by consumers. It’s also a hundred billion. And it’s only a matter of time before one of those two paying entities want some of their dollars back.

And again with the exponential return thing: As go the truck drivers, so goes the weekly mileage limitations imposed for safety reasons. So goes the time “wasted” while the drivers “sleep”, or “eat”. So goes the unreliable dependence on sight for safety at night, or in inclement weather. No more rookie driver mistakes costing time and money, fewer touch-points for shrink (“Musta fell off the truck”), and so much less paid out in liability for accidents with other motorists. Most people already know the truckers are the careful ones, but if you’ve got 6 cameras on each side of your trucks, you’ll have some beautiful footage of the idiots who crash into your stuff.

So we’ve got the tech, we’ve got the incentive. Why hasn’t this happened already?

Lots of reasons.

1.      The tech probably isn’t quite ready just yet. Nervous manufactures don’t want to get sued because their self-driving car wrecked, so they’ll keep at R&D and then release consumer grade products when they feel like they’re covered.

2.      And speaking of coverage, there will need to be lots more laws written around driverless vehicles. Who pays when one of these things really does crash with fault? The driver who bought it? The manufacturer who made it? The part supplier whose camera stopped working? The software company who programed it?

3.      And speaking of laws, we all know how quick our lawmakers are to understand and embrace technology. Luckily the silver-tongued $100B the trucking industry alone stands to make per year by not paying their drivers is a sweet talking little honey bunny.

4.      And speaking of embracing technology, would you buy a first gen automated car? Consumers will have to be eased into the technology, even as it has existed safely for several years. But waves of releases – a car that drives in traffic, a car that parks itself, a car that can swerve to avoid an accident and then give you back control – will boost consumer confidence. It won’t be long then before fully automated cars are in demand and commonplace.

But, the time scale mentioned above is certainly not on par with my prediction of consumer available driverless cars within 12 years. So how do we bridge that gap? If one wanted to speed up the adoption process, facilitating our transition to driverless cars, there is one more consumer touch-point that I think will be instrumental in the broad familiarization of the new technology.

Car sharing

Call it a taxi, call it ZipCar or Car2Go, call it Lyft. Whatever you call it, it’s not your car but it just drove you somewhere and you paid someone something. The experiences can be great, but more often than not they’re horrible: Sometimes you know for a fact your driver is either lost or taking the long way. Sometimes you pay $50 to go 12 miles. Sometimes you’re drunk and you kill a cabbie (amirite?). Whatever your experience, you know it could be better than it is now.

This is where our first consumer experience with driverless cars will come in. The new automated car service will pilot in a big, tech friendly city. You’ll give it a shot on your own terms, ordering the car and taking a little trip – like a carnival ride. You’ll appreciate the quick, quiet, clean experience. You’ll see your destination on a screen with traffic flow and an ETA. You’ll fare will be automatically deducted from your bank account – no need to even pull out your wallet or phone (this is 12 years from now after all). And then you’ll be hooked. You’ll begin to wonder if you could get rid of your car, and just use this service.

The company that supplies this service will be a giant. Who else will have the pockets to roll it out first? They will have the experience and knowhow from millions of miles quietly piloting prototypes, and this gives them reason to create a market that helps recoup their extensive R&D costs. They’ll have limitless access to bleeding edge technology, world class navigation algorithms, comprehensive street level mapping of every major city, proven influence with legal policy creation, and always looking for deeper product integration. If only such a company existed now.

Lincoln's Dilemma

Congratulations! You’ve just been handed the keys to the Lincoln Motor Company in last ditch attempt to salvage Ford’s underwhelming luxury brand. What do you do now? You could sell parts and patents to the Chinese for enough money to literally skydive with a golden parachute; but do you really want to be remembered as the guy who finally killed the Town Car?

Ok, bad example.

A business model with an expiration date

For too long Lincoln has simply gussied-up the exceptional work done by their “blue-collar” brothers and sisters in a half-hearted attempt at brand stratification. And while badge-engineering is, to an extent, an accepted practice by manufacturers occupying space across multiple demographics (i.e. economy & luxury makes), it is neither as thinly applied, nor as extensively used as it is between Ford and Lincoln models.

And herein lies the major problem: Lincoln does not have the luxury (pun very much intended) of falling back on the rock-solid reputation of a parent brand in the same way that Acura, Infinity, and Lexus enjoy the near mythic reliability of Honda, Nissan, and Toyota. Admittedly Ford has moved heaven and earth to convince the buying public that theirs is a brand finally worthy of comparison to neo-traditional competitors from Japan and Korea, but this has done little in the way of bolstering their luxury arm.

In fact, the shift in perceived quality at Ford has drained what little value Lincoln held, prompting major differentiation between brands now to be found in the buying experience and service orientation, rather than on a product level. And while these are important elements of a successful luxury brand, they are not enough on their own.

Solving for Lincoln

The first order of business is clarify, if not redefine entirely, the role of the American luxury car in a competitive and globalized businesscape. We must reconcile with the notion that consumers shouldn’t have to sacrifice quality for domestic loyalty, realize the right to build the finest cars in the world, and recognize that heritage and evolution are not mutually exclusive.

This challenge is met through the conception of a halo project – a clarion call of brand values to inform design language and performance ideals – something that excites a new generation of potential Lincoln enthusiasts. Our new flagship will be from the beginning a proof of concept in engineering perfection, not an exercise in mass production, and never to be used as fleet meat. The Lincoln Halo will breathe life into the brand by highlighting strengths in the current portfolio and buy enough time to ready the next generation of product made in the Halo’s image. But this begs two important questions: Who is Lincoln now, and who must Lincoln become?

Well, who we are now is underscored in a Polk survey showing that at 60 years old, ours are the most “distinguished” customers in the industry – three years older on average than Cadillac buyers (the  next closest competitor) and 10 years older than the performance oriented Audi – BMW crowd. So for argument’s brevity’s novelty’s sake let’s split the difference and start getting to know our new target market: At 55 years young, the Lexus buyer becomes a challenging yet highly enticing source of inspiration and income. And the expectations they bring are no less than perfection in terms of reliability, refinement, class, and tech. But builder beware; we must never take the fatal misstep of imitation – as the nature of imitation is limitation in terms of creativity and innovation. So with that in mind, and market share ready to be stolen, our new product portfolio begins to take shape.

And now to address the third and final major challenge to becoming a world-class luxury brand: The buying experience. As your grandfather moved through the ranks at his job, the guy who sold him his first Ford also sold him his first Mercury and then his first Lincoln. And until recently, this was status quo. Now, Ford and Lincoln showrooms have specific employees with specialized training, a step in the right direction. But we need to go one step further and completely decouple the two brands. Separate showrooms, service centers, customer support call centers, and any other touch-points potentially shared between the two families must be different, must feel different, which is imperative for success in brand-conscious China and developing Asia – markets we must find success in to remain competitive on a global scale.

And that’s it! Generate excitement; build to the consumer; and Honor Thy Father but move out of his house. Think you can handle it? We’ll be right here if you’ve got any questions.

Prolly a bad idea

OK. So I've decided to become an amature automotive journalist, and if I'm honest, I'd love to be as awesome as Top Gear. And write like Kurt Vonnegut. And get paid like J.K. Rowling. And look like Brad Pitt. This is all well and good until I realize that I have no access to cars worth writing about, or access to cars in general. So how am I supposed to start writing about them if I'm limited to what I drive (econo-box), and what my friends drive ('bout the same)? Well, two things occurred to me: Firstly, EVERY car is worth writing about, since every car fits exactly the needs of someone, somewhere. Secondly, since I can't afford to lose a grand or so buying random, used cars from dealerships (then re-selling them a few days or weeks later), maybe I could get a dealer's license and buy straight from auction. That would be exciting, right? Possibly even worth writing about. And MAYBE I could even make a few bucks after I'm done with them. If all goes well, each successive car would be slightly more expensive than the last, and I would be exposed to a full spectrum of toys cars.

Cars Etc.

OWNING a car in Seattle isn't like owning a car in New York or L.A; our priorities are different. We proudly hand our Toyota keys to the Canlis valet, and at no point have any of us felt insecure stepping out of a Jag or BMW at Pacific Place. What works in Bell Town works on Beacon and in Bellevue. But what really sets us apart is the huge diversity of demanding terrain found in Seattle and around Western Washington. Within a few hours or so from the city you can visit four active volcanoes, two mountain ranges, an ocean, a desert, a rainforest, alpine meadows, vast coniferous forests, and the fabled scablands. Not to mention the legendarily steep hills downtown. While we aren't quite as steep as San Francisco, when was the last time they had snow? What impresses the L.A. auto-journalist won't necessarily be worth a can of Stumptown's finest to the savvy Seattleite.

So through the lens of the Pacific Northwest, what is the perfect car? Or rather, which car will get you there and back again a hobbit's tale in relative comfort, safety and maybe with a hint of style? I suppose I'll try to find out.