What To Do About Lexus - How Would You Turn Them Around?

Lexus until very recently was the defacto way to run a luxury unit.  Clean straight forward, conservative designs, marketed to the masses at an optimum price point.  If you were looking for a fine upscale sedan and price was more of a factor than innovation, Lexus was your sweet spot.  Much of America seemed to agree to the philosophy of 80% of the technology, 60% of the price.  Lexus soon flourished with impressive double digit increases drawing not only from upwardly mobile Toyota customers but from established luxury brands as well.

All of this sets the stage for a fantastic fairy tale ending if it wasn’t for the last few months. Somewhere along the way when the economy tanked the proverbial wheels on the apple cart fell off.

Lexus ended a rough 2008 down 21.7% on the year compared to 2007.  With tight credit and an uncertain job market the luxury unit was hurting just like anyone else.  However at the beginning of 2009 when many makers declines where starting to level off, Lexus sales began to nose dive.

So much so that in May, the year to date sales percentages for Lexus had dropped 37.16% against 2008. They also were now at the bottom of the pack, with only Infiniti edging lower posting a 40% decline on the year.

 To make matters even worse Lexus had now taken a comfortable lead in the number one position in 2008, and lost it to rival BMW. Even more insulting maybe at the current rate of decline Mercedes Benz may out pace them in the next quarter as well.

So far on the year BMW now leads Lexus by over 3,600 and is slowly stretching the lead each and every month.  At the same point last year Lexus had a lead of over 5,800 units on BMW. 

Where did it all go wrong? 

Was it the credit market? I would like to think the Lexus buyers in general weren’t over leveraged.

Is it a lineup that succeeded each year in spite of minimal changes?  After all can you tell at a glance a 2006 RX vs. a 2009? 

It is that consumers are simply more cautious and now want on luxury brands that deliver on all fronts?

If you were leading Lexus how would you steer them back into forefront of the industry?

ChevyFan100 - 6/11/2009 3:02:43 PM

+4 Boost

Lexus is being turned around right now
I bet the ISC and the HS will be strong sellers

Agent009 - 6/11/2009 4:32:18 PM

-2 Boost

HS Maybe, but I wager it will be at the expense of the Prius. Toyota/Lexus has never been able to sell a drop top so I have little faith in the IS-C.

MSP6 - 6/11/2009 3:05:13 PM

-7 Boost

Give them a soul, add some "emotion" to the package.

theoptimisticpessimist - 6/11/2009 3:52:14 PM

-6 Boost

Do some research BMW has no incentive on the new 7er.

Agent009 - 6/11/2009 4:33:58 PM

-9 Boost

But you know what, BMW does indeed "buy" the business, BUT they also still command the high resale too. Thus making them a formidable force.

theoptimisticpessimist - 6/11/2009 5:38:30 PM

-6 Boost

009
BMW also makes more per car than any other car maker save Porsche. So who ever sells the most cars wins.

thstone - 6/11/2009 3:35:02 PM

+1 Boost

Since upwardly mobile Toyota owners are far and few between these days, Lexus needs to focus on the luxury car buyers from MB and BMW who are more sensitive to price than performance. 80% of the function at 60% of the price is still a good value proposition. The key is to convince potential owners that a new Lexus is a better buy than a CPO MB or BMW.

VISO - 6/11/2009 7:05:00 PM

0 Boost

009
BMW also makes more per car than any other car maker save Porsche. So who ever sells the most cars wins.

— theoptimisticpessimist


Actually you are very wrong and need to do some research. Audi makes more per unit with higher return per unit sold than either BMW or MB. But, again BMW fans continue to have grand delusions.

Agent009 - 6/12/2009 9:44:14 AM

+2 Boost

Visio. I never quoted who made more profit. Lexus is pretty tight lipped on that aspect. Maybe they fear a backlash when the consumer finds out they are making a tremendous profit on them.

r_driver04 - 6/12/2009 5:15:03 PM

+2 Boost

There's not much difference btw them anymore price wise because of what Lexus/Infiniti and Acura have done. Germans are still having to come out with more lines just to stay in the fight.

theoptimisticpessimist - 6/11/2009 3:40:06 PM

-3 Boost

Be brave, be daring, don't take eons to bring out product. Have a business plan that isn't based on designing your entire line after the competition.

inspirion7 - 6/11/2009 4:05:05 PM

-1 Boost

I don't understand. Lincoln sales for 2008 was 112,678 vehicles. Cadillac not far behind. Do the numbers need posting as well?

Agent009 - 6/12/2009 9:52:59 AM

0 Boost

The percentages down for Cadillac is around 49% Lincoln is down 28% which is recent improvement.

stevenv1999 - 6/11/2009 4:16:19 PM

-5 Boost

It is really simple, Lexus needs a hook or in their case soul. BMW has handling and connection to the road. Audi has all-wheel drive and hits the price points better with engineering in all the right places. Merc's have technology and safety as their selling points. Lexus needs something other than one-upping everyone else. Refining soul out of their cars no longer works.

lock - 6/11/2009 4:18:13 PM

+4 Boost

Bring back the old commercial voice of Lexus...haha

PlanB - 6/11/2009 4:40:22 PM

+2 Boost

The generations that started out buying their cars aren't getting any younger. And the younger generation isn't really looking at Lexus the same way their mom and dad were. The strategy they used to get into the luxury game is over and done, now being picked up and played with by Hyundai. Quality? That image is dead since most of the automotive industry has caught up them in quality from what I can tell. So where does that leave them? I do know this, if they keep it "business as usual" they will keep slipping further behind their competition.

Ricks2Dogs - 6/11/2009 4:53:51 PM

0 Boost

I would do nothing different than was done over the last 20 years...which was basically to build a high quality product at a very competitive price and simply kiss the customer's ass from start to finish. Stick to the basics...but most important of all...keep your current customers happy. Even if some of them drift from Lexus, it's temporary...most will return when they remember why they bought Lexus in the first place.

2nynbak - 6/11/2009 4:56:34 PM

0 Boost

I'm surprised how few comments have come in for fixing Lexus. To me that says that people here don't care about Lexus much. I think they are suffering from being too much like Toyota when it's tougher for consumers to come up with cash for new cars. Now that these Lexus cars have been around for several product cycles they get harder to tell from older generic Japanese cars especially their Toyota cousins. When noise vibration and harness were in many cars Lexus came in with super quiet smooth cars that were a hit at first but now are at more of parity where the competition is seen as more fun, higher performance, and still stand out in a parking lot 5-10 years down the road.
I think Lexus needs to "join them" rather than just being dead silent boring transportation with great frequency of repair records Lexus should make more drivers' cars with looks that won't be confused with Toyotas in a few years. Less emphasis should be put on wizz-bang tech and more on suspensions, steering and driving dynamics in general. It's taken a couple of product cycles to have these problems to mount and it will take a couple to fix them if they can. Just as the US makers should have made a "European" brand some time ago I think Lexus can and should move in that direction before Infiniti goes there first.

MrBratwurst - 6/11/2009 6:54:16 PM

-2 Boost

This is one of the problems Lexus is facing. Internet marketers, paid by its competition for spreading lies about the Lexus. These people never quote sources and come up with different out-of-thin-air statements to depreciate the premium Japanese brand.

Lexus pays no people for blatant guerilla advertising on websites that allow comments and likely they should.

The querilla marketer "2nynbak" paid by German carmakers writes a lie:

| I think Lexus needs to "join them" rather than just
| being dead silent boring transportation with great
| frequency of repair records

Let's verify this:

5-year total estimated REPAIR costs.

FLAGSHIPS:
Lexus LS430:.. $2,775[1]
Audi A8 4.2:.. $7,414 [2]
BMW 745i:..... $7,011 [3]
Mercedes S500: $7,011 [4]

Large premium cars:
Lexus GS430:.. $2,775 [5]
Audi A6 4.2:.. $6,892[6]
BMW 545i:..... $7,011 [7]
Mercedes E500: $7,011 [8]

Midsize premium cars:
Lexus IS350:...$2,506 [9]
BMW 330i:......$6,327 [10]
Audi A4 3.2....$5,006 [11]

Lexus should really do it "the German way". This means to pay some dummies spread lies. Some people, who believe what they read, will catch on.


[1] http://www.edmunds.com/used/2005/lexus/ls430/100414130/cto.html?setzip=10009&vdp=off
[2] http://www.edmunds.com/used/2005/audi/a8/100408895/cto.html?setzip=10009&vdp=off
[3] http://www.edmunds.com/used/2005/bmw/7series/100474763/cto.html?setzip=10009&vdp=off
[4] http://www.edmunds.com/used/2005/mercedesbenz/sclass/100492137/cto.html?setzip=10009&vdp=off
[5] http://www.edmunds.com/used/2005/lexus/gs430/100425153/cto.html?setzip=10009&vdp=off
[6] http://www.edmunds.com/used/2005/audi/a6/100477017/cto.html?setzip=10009&vdp=off
[7] http://www.edmunds.com/used/2005/bmw/5series/100477657/cto.html?setzip=10009&vdp=off
[8] http://www.edmunds.com/used/2005/mercedesbenz/eclass/100444951/cto.html?setzip=10009&vdp=off
[9] http://www.edmunds.com/used/2006/lexus/is350/100649803/cto.html?setzip=10009&vdp=off
[10] http://www.edmunds.com/used/2006/bmw/3series/100530524/cto.html?setzip=10009&vdp=off
[11] http://www.edmunds.com/used/2006/audi/a4/100598048/cto.html?setzip=10009&vdp=off

theoptimisticpessimist - 6/11/2009 7:53:24 PM

+1 Boost

— MrBratwurst
YOU'RE SKEWING THE NUMBER AND GIVING FALSE DATA.

Here is the flaw with your stats;You're using and 2006 and a refernce point.


BMW 3er. yr1 $912 yr2 $1,905 yr2 $2,117 yr4 $665 yr 5 $1,499

Lets take a look at a 2009 model.

yr1 $0 yr2 $0 yr3 $0 yr4 $905 yr5 $1,961 total$2,866

Lexus IS350
yr1 $1,117 yr2 $1,623 yr3 $1,262 yr4 $337 yr5$1,220 total $5,559

The new Lexus is more exspensive to maintian and is a higher maintance car because of more visits to the dealer.

BMW pays for the maintainance for the first 4 years and 50k miles the only out of pocket cost to the consumer is the cost of tire.

http://www.edmunds.com/new/2009/bmw/3series/101082770/cto.html

http://www.edmunds.com/used/2009/lexus/is350/100649803/cto.html?setzip=10009&vdp=off

BE HONEST WITH YOUR FACTS AND STOP SPINNING!

sector - 6/11/2009 8:14:08 PM

+1 Boost

^^
"BMW pays for the maintainance for the first 4 years and 50k miles..."

BMW "free" maintenance is the biggest scam. Not only is the cost already built into MSRP, but all you get is 2 oil changes and 1 "inspection" probably only worth $200-500 max.

before BMW offered free maintenance, you couldn't bring your car into stealerships often enough, once "fee" maintenance was introduced, suprise! they revise the "schedule"... now you only need oil changes every 15,000 miles!, brake fluid and coolants now last twice as long, diff oil is trans oil is "lifetime" fill.

All designed to get you hooked and hide the cost of ownership.

BMW's maintenance interval may be less but at what costs? any idiot who knows about cars knows going 15k-20k miles between oil changes will cause long term damage to engine components, using synthetic still doesn't matter as engines today run much hotter and will quickly breakdown lubricating agents in compounds. N54 TT engines in 135i, 335i, 535i etc can barely keep the engine cool with large oil coolers, that's why earlier 335i had engines crapping out and going into limp modes, who long do you think oil lube materials will last under those conditions.

"the only out of pocket cost to the consumer is the cost of tire."

ah, yes the tires, BMW offers no spares (at savings of $50 to BMW) so you can spend thousands replacing run-flats... look up "bmw run flat class action" you'll get the idea.

theoptimisticpessimist - 6/11/2009 8:45:25 PM

0 Boost

“but all you get is 2 oil changes and 1 "inspection" probably only worth $200-500 max.”

WRONG

BMW covers all maintenance Item, Brakes, windshield wipers, brake fluid, etc… except tires.

“now you only need oil changes every 15,000 miles!,”

WRONG AGAIN
BMW max is 15,000 miles or sooner if your car needs it (a service computers measure your driving style) or one year if your mileage is low.


BMW's maintenance interval may be less but at what costs?

Our dealership is $105 for and oil change, Our Lexus dealer ship is $70 per oil change every 5,000 miles so for the same mileage span the Lexus will cost you $210

“any idiot who knows about cars knows going 15k-20k miles between oil changes will cause long term damage to engine components”

Well BMW has had no significant problems and Porsche will take you to 22k miles.
BMW uses a higher capacity and closed oil system different for Lexus.

Toyota has not been so lucky

http://www.autoblog.com/2007/01/17/oil-sludging-atonement-toyota-settles-class-action-suit/

ah, yes the tires, BMW offers no spares (at savings of $50 to BMW) so you can spend thousands replacing run-flats... look up "bmw run flat class action" you'll get the idea.

Yeah I’m going to agree with you on this one. I think run flats are crap but that doesn’t stop Lexus from using them on the IS,GS, SC.

MrBratwurst - 6/11/2009 9:38:37 PM

+1 Boost

— theoptimisticpessimist:

| YOU'RE SKEWING THE NUMBER AND GIVING FALSE DATA.
| Here is the flaw with your stats;You're using
| and 2006 and a refernce point.
| Lets take a look at a 2009 model.
| The new Lexus is more exspensive to maintian
| and is a higher maintance car because of more
| visits to the dealer.

1. You're trying to make a point by quoting maintenance which has nothing to do with reliability (which is expressed by repair costs, the ones I quoted).

2. I took the cars from 2005/2006 to have realistic repair costs as monitored by Edmunds as a measure of reliability. I'm not interested in making predictions about 2009 models cause this is the job for fortune tellers.


| BMW pays for the maintainance for the first
| 4 years and 50k miles

BMW pays for nothing, they are not charity institution. They've simply hidden the maintenance costs in the prices of their too expensive cars.

sector - 6/12/2009 1:41:24 PM

+1 Boost

@theoptimisticpessimist

"BMW covers all maintenance Item, Brakes, windshield wipers,
brake fluid, etc… except tires."

NO.

BMW replaces brake pads and rotors "only if" the "brake pad sensor" is tripped. Crazy thing is that the rotors can be in sub-par shape and they'll refuse replacement just because the pad sensor didn't go off.

"BMW max is 15,000 miles or sooner if your car needs it (a service computers measure your driving style) or one year if your mileage is low."

No.

15k miles is usually the "minimum", again, you can't bring it in until service light goes off, it could be 15k, 20k or even more depending on how you drive.

"Well BMW has had no significant problems and Porsche will take you to 22k miles. BMW uses a higher capacity and closed oil system different for Lexus."

No such thing as BMW "closed oil system". non-M BMW uses Castrol 5W-30 synthetic, and M's use Castrol 10W-60 synthetic.

This is what the engine looks like between 15k mile interval:

http://www.justracing.com/bmw/viewtopic.php?t=12

Funny thing is BMW used to do "break-in" service at 1,200 miles, once "free maintenance" came about, "it's no longer required"... thing is, when oil analysis is done around that time, engine oil is chock full of metal bits and shavings.. last time I checked that ain't too good for your engine.

"I think run flats are crap but that doesn’t stop Lexus from using them on the IS,GS, SC."

NO.

Runflats only come standard on SC and GS 350 AWD. It's optional on GS 350 RWD and GS 460 RWD.

hensta - 6/11/2009 4:57:27 PM

-3 Boost

They need to turbocharge their engines like Audi, BMW, Mercedes (supercharged) to breathe soul into their cars. Especially the Lexus IS series. Give it a 3.5 l twin turbo and I'll sell my 2008 335i (twin turbo 3.0) coupe for a IS 350 (twin turbo) anyday. Lexus wins hands down compared to my BMW in reliability, value, interior, practicality. The iDrive in my 335i is basically a hand wrest for me since it is cumbersome to navigate. I have to use a trickle charger on my 335i since the electronic gremlins sap all the energy from the battery after 2-3 days.

Lexus: if you can hear me, start to turbocharge your cars and you'll be unbeatable.

david999 - 6/11/2009 5:10:07 PM

-1 Boost

Another b**ls**t post by 009 to stir traffic on this site. Lexus does not offer cheap lease or finance deals versus the competition. As well, they have the:
IS-C
HS250
RX450h
all comming out soon. Lets count the sales numbers after December 31 to see if they need advice on how to sell cars in North America.

enthusiastx11 - 6/12/2009 2:11:17 AM

0 Boost

um, yes they offer plenty of deals.

of course, they don't have to offer massive discounts when THE MSRP IS 30% LESS THAN THE COMPETITORS.

on the other hand, sales are tanking despite the aggressive pricing, so perhaps they need to ramp up the incentives big time.

david999 - 6/13/2009 8:31:56 AM

+2 Boost

Get your facts straight. BMW 3 series starts at a lower msrp than IS or ES. X3 and GLK less than RX. C-class less than ES. These are the biggest sellers for these marques. Don't speak bull enthusiastx11!

enthusiastx11 - 6/15/2009 11:59:07 PM

+1 Boost

david:

you can't compare BASE prices. you need to compare equally equipped cars. bmw and mercedes are notorious for hugely expensive options. a base 328i for examples, has a stick and no leather. just those 2 options add $3000 to the price.

so please compare APPLES TO APPLES. for example, loaded 335i sedan is $58.000 while a loaded IS350 is $44.000.

abcd - 6/11/2009 5:12:08 PM

+4 Boost

I think anyone who's interested in automotive technology wouldn't say that Lexus offers 80% technology or innovation.

What should they do? Like someone said people don't know what they want until you show it to them.

MrBratwurst - 6/11/2009 6:21:47 PM

+3 Boost

— abcd:

| I think anyone who's interested in automotive technology
| wouldn't say that Lexus offers 80% technology or innovation.

It was 009's yet another cheap shot at Lexus. He knows this company is probably the most advanced in terms of technology deployed onto their cars (hybrid drivetrain, 8-speed super fast gearboxes, electronic assistance, LS600H being quieter than the Rolls Royce Phantom) so he tries to depreciate this significant advantage.

Notice 009 wrote it TWICE in a short piece of text.

MrBratwurst - 6/11/2009 7:27:58 PM

+1 Boost

Lexus LS600 hybrid was built to offer the comfort and quietness comparable with the Rolls Royce Phantom. Japanese achieved what they planned. Noise inside, in decibels (logarythmic scale):


70 mph CRUISE:

Lexus LS600h L: 58.9 [1]
Rolls Royce Phantom: 59 [2]
Hyundai Elantra: 67.3 [4] (16.000 USD)
Jaguar Super V8: 67.5 [3]


FULL THROTTLE:

Lexus LS600h L: 66.6 [1]
Rolls Royce Phantom: 67 [2]
Jaguar Super V8: 73.6 [3]
Hyundai Elantra: 74.1 [4] (16.000 USD)


IDLE:

Lexus LS600h L: 38.3 [1]
Rolls Royce Phantom: 40 [2]
Hyundai Elantra: 42.7 [4]
Jaguar Super V8: 48.0 [3] (16.000 USD)


1. You may naturally try to powerslide a Rolls Royce Phantom or its runner up. MotorTrend testers did. Which proves they really know motoring and know their job.

2. You may also notice that the 90.000 USD Jaguar offers similar accoustic comfort to the 16.000 USD Hyundai Elantra, particularly when cruising. Makes you realize why the company went bankrupt, was sold to Indians and has been bought by the bloke who makes this car: http://automotivecredits.com/wp-content/uploads/2008/03/voiture-tata-nano-exterieur.jpg


[1] http://www.edmunds.com/insideline/do/Drives/FullTests/articleId=120486/pageId=122610
[2] http://www.edmunds.com/insideline/do/Drives/FullTests/articleId=108933/pageId=68143
[3] http://www.edmunds.com/insideline/do/Drives/Followup/articleId=106412/pageId=64723
[4] http://www.edmunds.com/insideline/do/Drives/FullTests/articleId=117648/pageId=105652

theoptimisticpessimist - 6/11/2009 8:22:59 PM

+1 Boost

"Lexus LS600 hybrid was built to offer the comfort and quietness comparable with the Rolls Royce Phantom."

But nobody, nobody but a few fanboys think that the LS competes with the Rolls.


"OK, let's just get it out there: The 2010 Ford Fusion hybrid is the best gasoline-electric hybrid yet.

What makes it best is a top-drawer blend of an already very good midsize sedan with the industry's smoothest, best-integrated gas-electric power system. It's so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close."

Does this mean that the Fusion competes with the LS600 or the Rolls Royce Phantom.

MrBratwurst - 6/11/2009 9:48:51 PM

+2 Boost

— theoptimisticpessimist:

| But nobody, nobody but a few fanboys think
| that the LS competes with the Rolls.

Obviously it does not.

Which didn't stop Lexus LS 600h engineers to build in Rolls Royce Phantom level of accousting and ride comfort into the Lexus LS 600h.

This is why it does not make sense to quote results of some evasive driving done by someone who does not understands this car. It wasn't built to be powerslidden.

Well, apparently Jaguar V8 with its Hyundai Elantra level of comfort was. Company went bust. And now is owned by Tata Nano makers. Guess who was right then.


| Does this mean that the Fusion competes with the LS600
| or the Rolls Royce Phantom.

In a word - no.

Db @ Idle: 40.8
Db @ Full Throttle: 71.5
Db @ 70 mph Cruise: 64.4

But it was made to be the best or one of the best hybrid sedans of its class in the world.

http://www.edmunds.com/insideline/do/Drives/FullTests/articleId=138726/pageId=156922

(decibels are in logarythmic scale, 3 dB more difference makes the noise twice louder).

abcd - 6/12/2009 9:42:28 AM

+2 Boost

TurboSpyder, maybe hybrid drivetrain in the Lexus isn't working absolutely well, nevertheless, until now nobody else have done so powerfull hybrid drivetrain better. Their less powerfull hybrid drivetrains work without overheating. And you still have rest of technology that is working well.

Bratwurst, I think this particular Jaguar(supercharged V8) wasn't intended to be quiet, rather to hear the engine "correctly". Most of problems of British automotive industry was in managing and manufacturing work rather than at engineering department.

klipprand - 6/11/2009 6:07:53 PM

+8 Boost

Having been a fan of Lexus and watching and driving them over the years, I would say they are not as great of a bargain as they used to be. Prices are much more comparable to Audi, BMW and MB. I'm still worried about reliability. But all 3 competitors have picked up their game significantly. And all 3 competitors still have greater cachet because of their history. So then it comes down to design and driving. Who do you lust after? From my perspective the LS and and IS are sexy, but they don't feel like driving a 3 or 7 series and they still don't quite live up to the badge. I would say they drive more like a Benz. So if Benz is Lexus' target, they need to offer a better deal. If BMW is the target get the driving dynamics right, on every model. The GS is royally screwed up in that department. If Audi is the target, get AWD on everything. I would love to drive as IS 350 AWD, but I can't buy one. Get an IS coupe. Lexus needs to make their cars more affordable again and fix the missing pieces. Or if they fix the missing pieces, they may be able to sell successfully against their competitors without losing market share. jm2c

theoptimisticpessimist - 6/11/2009 8:47:04 PM

+2 Boost

Hear Hear!

MrBratwurst - 6/11/2009 10:07:53 PM

+1 Boost

Fair comment by klipprand.

I'd add:
- weird design of their new RX, it will not attract to all people and will quite ruin the RX450h spectacular mileage;
- IS is TOO SMALL, has not enought place in the rear, a too small boot; they wanted to make it like a 3-series and overcooked; the good way is to make it like the Audi A4 - make it much bigger
- the LX570 is too much like an off-roader; premium SUV buyers never do serious off roading and will never make use of this car real durability; they're more attracted to SUVs with as much car-alike handling as possible
- the new HS250h is not styled as elegantly as the new Audi A4 and is also TOO SMALL, has too little wheelbase, will unlikely appeal to younger buyers
- some interior details and styling of the details needs to be replaced/improved
- ES needs the styling fixed
- IS coupe/convertible needs its rear part design fixed

It will be very hard to respond to all different characters of German premium car makers. Probably a standard adjustable damping on the suspension and a MORE PRECISE AND COMMUNICATIVE STEERING will universally help.

Lexus should also push the hybrid drivetrain much harder. Offering the same mileage on the new 2010 HS250h as in a 2007 Camry Hybrid while the 2010 Fusiun Hybrid is a bit ahead is a significant mistake.

For the Europe they needs estate verions of the IS and GS and more LOW END versions of what they sell there. A huge number of German premium cars in Europe sell as bare naked miserable 140-170HP diesels. This means Lexus needs a lower on performance and more affordable versions of its hybrid drivetrain. Lexus cars usually also come very well equipped. They are still a much better value but start at high pricetags while customers demand low end premium.

enthusiastx11 - 6/12/2009 2:14:01 AM

-1 Boost

yes, only in america is lexus loved. 80% of sales are in the US. this country loves big, soft, cushy cars. lexus is the cadillac of this generation.

answer - 6/11/2009 7:06:13 PM

+6 Boost

Periods of slow news = 001 cracking the whip on 009 to post more bias-laden anti Lexus pieces. Anyway....

Lexus needs to get back to what made them great: being unique. Yeah the usual fanboys will simply say that Lexus just "copies" the Germans, but look how they began.

The LS was similar in nature to a Benz S class, but it had a unique interior design and little touches like the Nakamichi audio system and opitron gauges that were different.

And then you had the 1st gen SC. That thing looked like nothing else.

Factor in well-above average reliability and industry standard NVH levels with low (relatively speaking) prices and Lexus was a hit.

Now Lexus takes too long to get new products out and their price advantage has narrowed to the point of being irrelevant.

And I think they are suffering from their unifying "L-finesse" design language as well. It's not bad, but it locks the brand into a one-look-fits-all image.

I think it was a mistake for Lexus to focus on moving up-market. They had a great niche. They just need to step up on the design front and bring back those little touches that nobody else has.

Side note, I don't think Lexus reliability has gone down, it's just a matter of everyone else finally catching up. Regardless, they need to get their lead back in that area too.

theoptimisticpessimist - 6/11/2009 8:54:27 PM

+2 Boost

I agree.

I believe Lexus needs to get back to their roots building true luxury cars with out a sporting edge. Look at the big sellers; ES, RX, LS. These cars are unique to Lexus pure luxury. Lexus took no market share from BMW or Mercedes (their sales number have grown ever since Lexus came out). Lexus to market share from Cadillac and Lincoln, pure luxury cars. Lexus does pure luxury better than any one else, that sporty stuff is a poor selling distraction.

ThierryHenry14 - 6/11/2009 7:24:16 PM

+3 Boost

I think its just the fact that BMW, MB, and Audi buyers are more "loyal" to their brand, simply because the three brands mentioned have created some kind of aura around their cars/brand. Also, it seems as though the three German makes gives their customers this perceived value of being in a vehicle that is like no other.

It seems like Lexus owners, not even toyota owners, look at their car as something that could get replaced, for the time being, because they give it this notion of "luxury-for-the-mass" approach.

Furthermore, I think the target market has so much to do with it.

lexworld - 6/11/2009 7:29:30 PM

0 Boost

What would I do to turn Lexus around? Well, first off I'm not sure I would make the ES350 a rear-wheel driver because that thing still makes plenty of money. Secondly, I would increase the driving dynamics of the IS350/new IS350C and increase the HP to around 350, increase the IS250/IS250C to 280hp, over haul the GS line completely giving the GS350 350hp drop the GS430 keep the GS460 giving it around 390hp standard and produce a GS-F maybe w/ twin-turbo to 480,increase the current IS-F to 520hp, debut the awesome LF-A w/ no less than 600hp and keep the weight around 3200lbs. Finally, I would use every strategy know and unknown to man to oust the competition price and incentive wise.

LexSucks - 6/11/2009 7:47:51 PM

-2 Boost

How Would I Turn Lexus Around?

- Lower the price of every single car in the line up. At $39,000 the 1990 Lexus LS400 seriously undercut the prices of the 7 Series and S-Classes of the day. The Current Lexus LS isn't anymore competitive now against the Germans as it was then, yet the current LS cost has risen to level of the German Sedans. Lexus current offering are valueless IMO.

Either that or build better cars than the competition.

enthusiastx11 - 6/12/2009 2:02:34 AM

0 Boost

it's not about pricing. lexus prices very aggressively at big discounts to the germans. it's that their buyers are considerably lower income and are, consequently, more conservative about large purchases in the current economy.

JUGNU - 6/11/2009 8:36:25 PM

+3 Boost

Here in Middle East, most Lexus models cost a lot less than comparable Benz or BMW.

There is a huge price difference between RX and X5(i don't think they r competitors), all new E class and GS and significant differences between C class/3 series versus IS. Only LX570 price is close to GL450 and Range Rover sport HSE.

In some cases a lexus costs almost half as much. Example a standard LS460(still lot of features) costs almost half as much as fully loaded MB S500 AMG package or all new full optioned 750li(though prices have not settled yet).

So it's bit strange why in U.S such is not the case, maybe it's the BMWs and MBs which sell cheaply than lexus increased the prices to their level.

btw on topic i think Lexus need more models, they have already come up with all new models like IS-C and HS. GX replacement and an additional F series model should join line-up soon. Also Lexus should offer more engine options on their existing cars.

JUGNU

skinny - 6/11/2009 10:21:04 PM

+1 Boost

Where do these crackpot stories come from? Lexus is down 37% YTD, BMW is down 30%, MErcedes is down 30%. WHere's the massive difference? The moronic poster of this post makes it seem like Lexus is down 70%. Get a grip!!!

Let's see why Audi's sales are only down about 20%. The Audi Q5! If you back out the additional Q5 sales that they had in May 09 that they did not have in May 2008, you have a 29% drop. The drop is basically the same of 29% for YTD 2009 over 2008 if you back out the new model Q5. So, moral of the story, before you post random numbers, think about it.

Don't forget, despite the fact the Lexus HS250, doesn't really belong in teh Lexus showroom, IMO, it should add about 25K units annually for them in the next year. Also, a new RX350 will slim that massive 37% drop down somewhat. Also, alot of Lexus models are nearing the end of their product cycles which is hurting sales, such as the SC which is being phased out, the ES is midway in it's cycle, the GS is in due for a redesign in probably less than 2 years, and the IS is in it's 4th year, so it's also due soon for a redesign. Not to mention the GX470 is due for replacement probably for 2010 model year.

Next, onto what Lexus needs to do. How about some "soul" in the product. The next GS & IS needs some more "soul". Also, it would be nice if they could get a manual tranny into the IS350 as well as the GS350. Also, if the IS250 can come with AWD, why not the IS350? Makes not sense. Second, the IS250 should be dumped(too damn slow) in favor of a IS300 with a 3.0L V6.

0to60 - 6/11/2009 10:40:50 PM

0 Boost

Redesign everything except the RX!!!

0to60 - 6/11/2009 10:41:58 PM

+2 Boost

their product lineup is just stale. They need something new to spark interest

enthusiastx11 - 6/12/2009 1:58:47 AM

-2 Boost

are you talking again dumb ass?

1dott8 - 6/12/2009 1:20:43 AM

0 Boost

sport tune every lexus (not just suspensions and body kits).

528i - 6/12/2009 1:42:03 AM

+1 Boost

They will be fine, we talking about the daughter of Toyota, LEXUS.

Off topic
CR7 is not worth $131 million

enthusiastx11 - 6/12/2009 2:08:37 AM

-1 Boost

here's what they could do:

1. cut niche models that contribute little to nothing to the brand's bottom line. SC, ISF, LX (there's already the nearly identical land cruiser), ISC, GSh, LSh. lose them all...they sell in tiny numbers.

2. take the development savings on those models and invest in mass models on unique platforms. rebadged camrys like the ES simply aren't appealing in these economic times when you can get the same basic car for thousands less.

3. stop trying to BE another brand, be yourself lexus.

4. cut all the ridiculous advertising and marketing ($500MM a year). it's all just blather anyway.

Dr550 - 6/12/2009 4:51:01 AM

+3 Boost

Maybe the problem is Lexus aging demographic, i.e. Cadillac/Lincoln. Most ES/LS owners I have seen are in mid/late 60's. RX owners 40's/50's. Infiniti age demo. appears younger.

fabulescent - 6/12/2009 8:01:10 AM

0 Boost

Couldn't agree more about demographic shift being the cause of the problems.

I've driven a few lexus models over the last few years, and all I kept thinking was 'this is the car for me when I'm 52'. It was luxurious but I felt like I was driving a ducks tour boat (albeit a very comfortable, high quality, ducks boat).

Also, I think their bread and butter was the RX, but now there are a lot of other competitive crossovers...I see a lot of those soccer Moms now driving the MDX, CX-9, Highlander Hybrid, and soon the Q5/GLK 350/Venza/XC60.

r_driver04 - 6/12/2009 5:17:44 PM

+2 Boost

Infiniti is in trouble. The only cars they can sell are the G35 and that fugly FX35.

pennfootball - 6/12/2009 11:39:58 AM

+3 Boost

Pricing TOO HIGH! It's off because they USED had a competitive advantage charging 20%-30% less than Germans and offering superior product that was not marked up as much. Now they are charging TOO MUCH!

Very similar how Honda Completely destroyed the British motorcycle industry in the United States in the 1970's and 1980's.

Honda held it's advantage and still offers more bike for less money. Lexus however does not offer more car for less money! Their engines are not as powerful and they are off pace in their price advantage.

r_driver04 - 6/12/2009 5:20:56 PM

+1 Boost

pennfootball- they are off pace in their price advantage

Huh? What pace? You ever compare what you get on a Lexus vs a comparable German car. 1st off, by the time you equip the bmw,merc or audi, they way you'd drive it, you're several thousands beyond a comparable Lexus model. Germans package their clients to death!!!

david999 - 6/13/2009 8:39:24 AM

0 Boost

"a standard LS460(still lot of features) costs almost half as much as fully loaded MB S500 AMG package or all new full optioned 750li(though prices have not settled yet"

Not a good example to compare a base Ls to fully loaded other models. What does a fully loaded LS600h cost there,
or a fully loaded LX570 or SC?

david999 - 6/13/2009 8:40:15 AM

+1 Boost

Response to JUNGU above.

enthusiastx11 - 6/15/2009 11:56:03 PM

+1 Boost

not a base to loaded comparison. max out an LS and then max out an S-class in dollars. the difference in price is HUGE.

loaded LS460L AWD: 95,000
loaded S550 4matic: 120,000

loaded LS600hl: 120,000
loaded S600: 160,000
loaded S65AMG: 210,000

loaded 335i sedan: 58,000
loaded IS350: 44,000

loaded ISF sedan: 61,000
loaded M3 sedan: 75,000

generally speaking, bmw/mercedes would need to discount their cars by 20-30% to get to the MSRP of lexus. of course, lexus discounts too, so they'd have to discount more than that to match lexus prices.

anishgt - 6/14/2009 8:30:57 AM

+1 Boost

i guess with the new hybrid cars around,the sales should be catching up,
probably even the hyundai Genesis would have taken sales from the Lexus.