Lexus VP Says Brand Probably Never Again Dominate US Luxury Sales Again

So, advantage Mercedes and BMW. Neither one of them have a non-premium brand that would be threatened with overlap with a lower entry luxury car.

How is it an "advantage" when both of those marquees offer luxury vehicles that can be had for less that either an Avalon or Accord??

I really need to explain that to you???

Lexus is saying it doesn't need to go into the "mainstream" price band. It's saying Toyota already owns a big chunk of it that could get bigger with a revitalized Scion. Now factor in Toyota's captive "cooperative" partner, Subaru, and Toyota Inc. is just fine.

If given a choice between a CLA or a WRX, I'd take the WRX 100 times over. CLAAMG45 or the STI? STI by far.

That CLA is the most hideous car on the road. It can only be viewed from one angle. What kind of fucked-up design is that?

Dont they have CT200h which started at $29,900?

It starts at $32k...

“But it will become increasingly difficult as our German competitors head down below $30,000, because that’s an area we won’t go with Lexus.”

Really Lexus??? You found success in the U.S. by coming in as the least expensive alternative to your German Rivals.

Mercedes has always been the most expensive option in most of the categories they compete in and decided to throw the industry a curve ball with the massively successful CLA, now Lexus is all of a sudden "above" playing the price game???

Right...

Exactly. And Lexus apparently doesn't want to venture into the same upper part of the segment where Mercedes resides with their S-Class Coupe, SL550/SL63/SL65, S600/S63/S65, SLS, GL63, ML63, etc. Sure, Lexus "offered" the LF-A, but that pricing wasn't meant for it to be truly competitive from a sales perspective.

Truly, LEXUS is the cheaper alternative to German, but ABOVE $30,000, because too many common brands car is within that price segment.

Therefore his comment did not contradict himself. An Armani Exchange, for me, is not An Armani, and it'll only sell well, to those who simply had no idea about luxury goods. It's that simple.

For me, Porsche is the entry luxury brand. Everything else is considered near luxury brands.

Truly, LEXUS is the cheaper alternative to German, but only at ABOVE $30,000, because too many common brands are within the price segment of $30,000 and under.

Somebody rightly said already it in another post: Lexus is to compete with Cadillac , Infiniti and maybe Lincoln (in a down spiral right now)

Mercedes and BMW are still the standard to beat and Audi is upping the game big time.

Jaguar and Acura are irrelevant.

Maybe the key to toppling Lexus was to take away the "Low Cost" image. That in conjunction with the discredited reliability benchmark and then you have to compete on tangible attributes where Lexus lags.

Now to be clear I am NOT saying a Lexus is more expensive to own than a German car.

You can get a new LS oil changed at Walmart and be fine, where you would be hard pressed for them to touch a Mercedes or Audi. There are savings to be had in this case.

But if you go to the dealer the rates are comparable. You get what you pay for in this case.

that's hysterical.

so mercedes puts a BASE price of $29,900 on ONE model out of more than 50 and that's why lexus won't dominate volume? LOL

75% of the lexus brand sales have a base MSRP in the $30s. much less than 50% of mercedes and bmw start that low. not to mention you can put 3X as much in options on a bmw or mercedes as on a lexus.

The comment is an interesting one. Lexus has Toyota to keep the economies of scale working to keep costs in check. BMW created Mini to develop lower cost platforms, but will likely need a partner. Audi has the massive VW enterprise to spread out costs. MB will be sharing platforms & engines w/Nissan but is moving down market because the company cannot stay in business with their cheapest car at $40+K. That market is not sustainable...

http://www.autoblog.com/2012/01/10/nissan-agrees-to-make-engines-for-mercedes-in-tennessee
http://www.leftlanenews.com/mercedes-renault-nissan-to-jointly-develop-new-small-car-platform.html

That said, Lexus whining about their situation is their own problem. Reliable, expensive refrigerators only go so far.

“But it will become increasingly difficult as our German competitors head down below $30,000, because that’s an area we won’t go with Lexus.”

Nice excuse, but that not Lexus real problem, the have become the Japanese Buick just take a look at the median age of their buyers. Edgy (off-putting) styling, sub par base product(IS 250) and attempt to be the new BMW (alienating core buyers)and a brand that is basically two cars (ES & RX) this is why the market share is falling, not a sub 30K car.

It was only a matter of time. I wonder what Lexus' corporate mission statement looks like? "Be a nicer Toyota"? "Be the Japanese Buick"?

Lexus has always been the brand with no soul and no mission.

Lexus had a "reason to be" from 1990 to the early 2000's when the German competition was quirky, unreliable, and expensive relative to their value propositions. Now that the German's are more reliable, higher-quality, cheaper, less-quirky - people are voting with their feet. Lexus will continue to wither.

Someone should make the Lexus story a Harvard-business school case study.

I'd argue that, in contrast, the Infiniti does have a soul and a mission, however Acura is in worse shape and shut just be shut down.

Next victim - Scion. WTF is a Scion?

Lexus already tried to go "downmarket" with the HS. It looked like a Toyota Corolla with chrome. Same with CT. A lower height Prius. Lexus, the gig is up. IS and GS are not volume autos like ES and RX. Lexus age demographic is around 54.

The stock market wealth effect is reflected in premium car market. Once this normalizes or reverses, you will see a shift back to favor the value that put Lexus first previously. Also smaller lower priced CUV will likely close the gap. Once Europe recovers, the Germans may slow down their discounting in the US market.

the real problem at lexus is lack of new product for years. warmed-over models with 10 year old engines. slapping new grilles across the lineup isn't going to do much for sales.

Lexus "won't" go into the sub-$30,000 market in the U.S. because their parent company already occupies that space with many of the same cars and platforms Lexus models are based.

Here's another key to what Bracken said. He said that Lexus "won't go" below the $30k mark. I think a more appropriate comment is that they "can't go". If they did, it would jeopardize Toyota/Scion sales, plain and simple.

What a mess. Suddenly, Acura looks more responsible about their strategy. And that's a lot to say.