Saving Lexus -
In 1996 I took a job with a company in California that promised great things in exchange for hard work. Not one to turn down a challenge, I resigned from my job and moved from New Jersey to California to start a new life. At the ripe old age of 21, my goals, dreams and desires were quite large, and the promise of a decent salary along with commission had me making plans on how to spend this new found wealth. During the first week at this new job, the managing partner called me into his office and instructed me to make a list of goals that I would have to review with him in several days.
I was new in town and hadn’t met a lot of people yet, so after work I spent a lot of time looking at cars at the numerous dealers in Southern California. I prepared the list of goals, and top on that list was what kind of car I wanted to be driving. Several days passed and I was again summoned into the managing partners office and he inquired as to my goals.
After I went over the sales goals I proudly told him that I intended to purchase a Lexus SC400 once I had gotten my commissions rolling. I took a brochure out of my stack of paperwork showing him the car I intended to purchase once I had started meeting my goals, and he took one look at me and laughed. He went on to say that I would never make enough money to be able to afford that car.
I lasted less than four months at that company before going with a startup that would eventually allow me to afford no only the Lexus SC400, but a lot of other cool cars as well.
There has been a lot of news lately that hasn’t been kind to Lexus. A survey posted by Agent 009 has Lexus in the lead as I write this story as the company our readers suspect will lose the most customers during the economic downturn we have been experiencing for the last 12 months. BMW has caught up to Lexus in both quality and will most likely surpass Lexus this year in sales as well, and while it is easy for us to play armchair quarterback, the fact is that Lexus seems to have faltered in the market place.
While Lexus won’t go out of business, I do feel that several strategic moves could really catapult it back to the top of the luxury car echelon, and even give BMW a run for their money.
The biggest single factor in play at Lexus is that their cars just don’t have the “got to have it” appeal anymore. Cold, calculated and sterile seems to be status quo with the current model lineup, and while they may be great well built cars, there is no passion. That passion and appeal are the very things that made a much younger me lust for the SC400 coupe, but those things are currently missing from the model lineup.
So how do you fix Lexus?
A good question perhaps, but first you have to acknowledge that Lexus needs to be fixed. There are certainly some hardcore Lexus fans on this site that might argue that Lexus doesn’t need to be fixed, but for the time being, grant me the leeway and assume that Lexus is indeed broken.
Lexus has always had a front wheel drive entry level car and a rear wheel drive flagship sedan in the fleet, so lets start there. The LS has become a benchmark vehicle that others aspire to be in terms of quality, but it is boring. This car is not bought for the way it performs, but rather the way it is put together.
Lexus first and foremost needs to get back that “got to have it” quotient that is missing from the lineup. The IS-F is the only car that comes close to having that quality, however when driven back to back with the competitors it does still come across as conservative.
So why not start with a bottom up redesign of Lexus. Lets start with the IS. I think the IS is a great looking car, I think the rims on the IS are some of the best looking rims currently on a production car. Lexus needs to infuse some soul and passion into the IS, and then steal a page from the BMW playbook and introduce both a coupe and a convertible version of the IS.
To make the IS a true competitor to the BMW 3-Series a manual transmission is a must across the board. The percentages really don’t matter as to how many cars roll with the manual, it is the perception the manual transmission option creates that Lexus needs to capture. Drivers of sporty cars like the option of the clutch pedal, and Lexus needs to get this into the lineup immediately. In addition, continued enhancement of the IS-F along with the addition of a manual transmission would round out the lineup for the IS.
The GS is a good car at a great price. Lexus could capitalize on this model range by doing a few simple items. The first thing I would suggest is defining whom the GS is truly going after in terms of sales. Is it the BMW 5-Series or E-Class Mercedes-Benz? If the 5-Series is the answer, I would again suggest a manual transmission across the board. Most people purchase automatic transmissions, however the inclusion of the manual again creates a perception in the customers mind as to the sporting intent of the car. BMW includes the manual on the 5-Series for this very reason, and even though the numbers are small the value of the perception created through the offering is invaluable.
Lexus needs to follow through and create the GS-F as well giving them a car that can compete with the BMW M5. On this one Lexus could have the upper hand as the current M5 with the standard SMG has a “love it” or “hate it” reaction with people. I recently drove a SMG M6, and was surprised at the “clumsiness” of the transmission. Lexus could easily move to the head of the class with the GS-F and have a car capable of competing with not only the M5, but the MB E63 and Audi S6 as well.
For the time being I would leave the LS alone however I would suggest the next ES and RX be rear wheel drive. Keeping the ES but making it RWD is a great strategy move and one that will continue to pay big dividends for Lexus. This car could compete with the MB C-Class and continue to be a huge asset to Lexus. By making the RX RWD as well, it allows it compete with the ML and BMW X3 while taking away the stigma of it being a Camry on steroids.
Finally I would propose two things that I think would go a long way towards fixing Lexus, and recreating it as world class tier one manufacturer versus a USA only car company. First off scrap the LF-A. You don’t need it, and quite frankly I am not convinced people are willing to buy it right now. Bring back the SC400 coupe. Make it convertible as well, but offer it initially as a coupe. Offer a manual transmission, and create a –F version of it as well. The original SC400 was a great car, but it was lost in translation when it became the bloated Tylenol shaped blob known as the SC430.
Secondly, and I think most importantly is this, Lexus needs to take the Toyota out of Lexus. Currently you can sit in a LS460, and then go down the road to a Toyota dealership and sit in a Camry or Corolla and start looking at the switches and textures and you will see the same things. Part of Lexus’ success has been built on Toyota buyers moving up, however there are a lot of Toyota buyers who move up to something different. I really believe that if you have driven a Toyota for a number of years, moving up into a premium car brand you would expect to see something different. That is not the case with Lexus. The vast majority of switch gear and surfaces are the same as in lesser Toyotas, and I don’t care how well it is put together the bottom line is the perception of a higher quality just isn’t there.
That is a tremendous compliment to Toyota, however it is not to Lexus. For Lexus to set itself apart from Toyota, it needs to keep the quality but change the pieces. Don’t use the same window switches as Toyota, or the same turn signal stalks, or the same font on the instrument panel. Do something different. Create an experience that is different from Toyota thereby making it a truly special experience to drive a Lexus. This single item more than anything else will help to kill the perception that Lexus is nothing more than just a dressed up Toyota. Make Lexus special. Make Lexus world class.
I just checked back to the survey to see how Lexus was fairing and they are still in the lead in the survey Agent 009 posted, there seems to be a consensus that Lexus needs help. I just laid out my game plan, what would be yours?
I think back to my younger years as that 21-year-old kid that lusted after a Lexus. Recreate that in people’s minds, and you will have a run away hit on your hands.
Lexus, are you listening?
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