Lexus sales in Japan not meeting expectations

Pretty much to be expected. Lexus is for now a US phenomenon. Built for the US market, and subject to the same issues abroad with differing tastes. There are very few one size fits all makes. Honda knows this by selling two different Accords world wide.

Toyota needs to adjust Lexus and sell cheaper weaker versions so all the international markets can be happy with their stripped down luxury vehicles.

This is the problem because the stripped down Lexus' will just be the Toyota's that they are based off of, so the question really becomes Why buy a Lexus with cloth seats and a 4 cylinder when the Toyota is the exact same thing. In the US it is not the same as in Europe. BMW has a advantage here where they can sell the cloth and still be BMW because there is no cheaper brand.

It's still too early to make a judgment call despite the slow sales.
Lexus has been in Japan for only a year, but it has only recently redesigned it's lineup. The GS was recently redesigned, the new IS looks great compared to before, and the exciting next gen LS flagship has yet to be released.(Let's face it, the current LS, as high quality as it is, lacks emotional appeal.) There is still LOTS of potential for Lexus as it is spending enormous amounts of money in redesigning it's existing lineup and introduce completely new models(e.g. IS500, IS coupe/convertible, etc.).
Also, as they have realized, it's not a one size fits all market. They've realized they need a different marketing strategy for the USA, Europe, and Japan. This will all take time to implement and even more time to see the results.

Dave- When you have no sales somewhere, there is always lots of potential.

This is an interesting case study. Typically very few American designs sell well abroad. Until now we chalked it up as garbage being peddled abroad. So now we have a powerhouse automotive company, that makes a highly successful product with excellent quality selling an Americanized product abroad.

The results in Europe and Japan? Lukewarm at best.

Hmmmm, This world class car marketing is a bit harder than Lexus first thought. Maybe they need to take a page from BMW or Mercedes Benz on making models that sell well everywhere. After all copying is the sincerest form of flattery.

Will- Imagine if? That is a pretty big imagination.

Being on the market for one year really has nothing to do with it. Lexus simply doesn't offer the Japanese what they want.

The Europeans sell their smaller engined luxury cars in Japan. It's not uncommon to see a Mercedes S-Class over there with a 2.8-l engine (S280). What does Lexus offer? A big thirsty V8 LS430. Won't fly there as gas is expensive and they've got their own emission laws etc.

Furthermore, those Japanese with money and badge consciousness go to the Germans or the British. Cadillac even sells a few cars overthere.

Also, I could buy a Toyota Harrier for a much cheaper price than a Lexus RX. Yes, I know that the newer Lexus aren't rebadged Toyota's but still, this impression will last for sometime among the Japanese because they know that the LS looks similar to the Toyota Celsior...or wait, it IS one.

The Japanese are very badge conscious. My company did a market entry study for Japan once and among the things we found out was that STATUS is something the Japanese take very seriously.

Lexus has no real luxury status at the moment in Japan. Amongst the practical luxury cars, BMW, MB, Aston Martin and Jaguar are the ones with status in Japan. Audi is slowly getting there.

Will,

I don't recall Mercedes and BMW selling successfully worldwide in a year, so why are you rushing Lexus? Sit back, and enjoy the ride while you still can! Let's come back and talk in a decade.
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Unfair comparison. Do you think people in 1886 rushed to Karl Benz and Gottlieb Daimler's workshops to immediately buy their cars?

Hell no.

The car was something not accessible to the masses in those days. Only the rich and powerful could afford them and even they held back.


In this day and age, where cars are a proven technology, it's easy to make the decision. There was an article about Japanese luxury buyers on Businessweek a few months ago. I can't find it anymore but it said that the Japanese go for brands with status: European. It will be a long time if Lexus ever achieves this in Japan or elsewhere. And even then, the Japanese know about the heritage of the German and British and Italian brands. Heritage = prestige. And heritage means innovation, motorsports, famous cars (classics and youngtimers) etc. Lexus really has nothing to showcase here, except their hybrid cars.

Take this constructively. ;)

Maybe the people in Japan don't like cars that drive like a couch on wheels!

Oh well!!!

Will,

So are you saying that the "established" brands are the only ones that are allowed to exist and compete?
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No, I am not saying that. But the fact is that the Europeans have the "established brands" and those currently have more appeal. It's so simple.

Will,

You are not listening and you're blindly defending Lexus against what you perceive to be attacks from me. I am not defending the Europeans nor am I attacking Lexus.

I am stating the facts. Lexus has no real history, especially in Japan. Furthermore, it doesn't help if some of their older models are rebadged Toyota's: something the Japanese see everyday.

True. But creating an image takes awhile. Usually decades. And you've also got to give consumers what they want. Lexus is still offering American-style luxury in Japan and Europe, and it's not working.

Lexus doesn't offer smaller, more economical engines, that's what holds them back.
Why no gs200, is 200, rx diesel, LS 300 or diesel?
Of large luxury cars (S class) the major buyers in europe aren't induviduals, they are companies and limo services.
They don't care about performance, they care about price, fuel efficiency and resale values.
Hotels and taxi services all have 730ds and S320 CDIs and A8 3.0 TDIs, but not a monster 4.3 Lexus, which has poor resale values (sheds over 68000 dollars in 3 years), high costs (19 US mpg combined cycle, town and highway driving) and yet the LS 430 costs the same as an S320cdi long wheelbase (or 14000 dollars more than a 730Ld and A8 3.0tdi quattro). The S class keeps 9000 dollars more over 3 years than the Lexus, gets about 28 us mpg (combined cycle) AND has more status.
The 7 series and A8 both have slightly better resale values than the Lexus, despite costing less (14000 dollars less)initially (the audi actually has better resale than the bmw) and get similar mpg the S320cdi.
So really, why should these companies buy a Lexus LS?
There isn't a reason for them to.

Actually an LS 430 here costs the same as an A8 4.2 LWB and 740Li (about 124000 dollars), so there is no price advantage.
It is more expensive than the standard length 740i and A8 4.2 (by 4000 dollars).
and sorry for the lack of data on the LS460, it may cost less, but since it isn't out yet, i have to use LS 430 data.

You correct it looks like a camry that graduated from college. The reason Lexus sells the most luxury cars in the US is because they cost LESS. They cost less because they are not built as strong. Compare the RX330 to the BMW X5 or ML. The doors on the RX are light and flimsy

Lexus does have great technology, look at the engine in the latest LS 460. However, because of exceptional marketing (similar as with BMW) its status in US (similar with BMW) is much higher than the actual cars are. Most of Lexuses are the RX which are driven by people who want to seem rich and elegant, same case as a lot of BMW 3 series that I see crawling in traffic driven by people who want to look hip and rich (over 75% of the people in 3 series look bored and definately did not buy the car for its driving charectiristics)

I support my argument with the fact that in Europe BMW doesn't sell that much higher than its competitors and as we can see Lexus hasn't "exploded" on the scene in its home market.

huu76 is just a bit silly.

The BMW Z9 concept had a 'Bangle Butt' back in 1999.

I don't see why people are surprised. 60% is not too shabby considering that the Japanese know they were Toyotas just over a year ago. Over time, that should get better. The number was 50% of projections last year for a total of 10K sold from early fall. 60% may be an improvement if the projections were not low balled. Don't forget that it will be difficult to find many people who will shell out cash for a car that was a Toyota one year and then a Lexus in the other. In the US most people don't know and the few that do, don't care so sales are very strong..

huu76,

You should submit that link of "luxury Toyota" models outselling Mercedes and BMW to autospies. Obviously some people don't undertsand that upstart brands always have a hard time selling, even if it's in their homeland.

huu76,

Only difference is that Lexus has to go up against Toyota in its home market.
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A HOME-MADE PROBLEM. Lexus should have been more careful when they launched themselves in Japan. I mean selling an LS430 next to a Toyota Celsior is pure stupidity. Sorry, it's true. That's the best way to confuse consumers. Why should I pay more for this LS430 when I can buy a cheaper Toyota Celsior? Want to know something else? I think a simple premium Toyota in Japan has more image than a Lexus in Japan too!


Remember, Toyota luxury cars still outsold BMW and MB last year.
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What does this prove? Nothing. Absolutely nothing.

First, they're cheaper by far and many people can only afford these. Ask your average Japanese what luxury car he wants to own and he'll very likely say BMW, Jaguar, Mercedes, Aston Martin, heck, maybe even Cadillac.

Lexus? Not even on the wishlist.

huu, did you day the SC was cutting edge!
the sc really is a pumpkin, or a boat. or both.

This is interesting. In order to figure out why Lexus did not sell well in their home territory, we need to consider the demographic and perception of those people.

In japan, having the driver license is not as easy as in the states since it costs a lot of money and requires effort. Getting the license can cost up to 1500 USD. That's just for taking lesson and test. Noone can get the license without those lessons. Thus, many japanese try to avoid the test by flying overseas and get the license from there so when they go back they can have it swap right away without taking the test. Therefore, only old and rich people have the driver license.

Now, this is where the problem is. The perception of these people about the luxury car is always connected with the Mercedes and European because they were luxury imported in the time that Japanese had no luxury brand like Lexus. Only rich people can afford them. It was pretty much like a dream of those people that someday they must have the European luxury car like the rich people have. Having the European car is about showing other people the power, financial status, social acception, and much more. This does not only happen in Japan but also in many Asian countries. Therefore, rather than buying the unfamilier Lexus brand in the same price, it would be better to buy something extraordinary to show off.

Somehow, young people tend to have different perception because they grew up in the age of reason. It is obvious to see that Lexus is second to noone in luxury and quality. And this is going to project the future of automotive market.

Until that day, probably a next decade or two, we will see.

huu76- As much as I want to slam you guys, I do have to admit that it is only one year in the market. BUT the biggest problem is Lexus sales figures were conservative at best for the market, and they undersold even those figures. So this is a pretty big setback for now. Also the Japanese do not take kindly to rebadged cars, so taking an existing Toyota model and up scaling it, will not necessarily work over there. They better come to the rescue some unique models soon.

jakemiller- The SC look like a squashed lima bean to me. Just a confused body style.

^^^HAHAHAHA (sercasticly)


G

To Jake I mean.


G

selling lexus in japan is like Jesus peaching@home
it's no super car , its a toyota , the altezza was sold cheap while by moving to lexus brand , the price hike is like night and day ( u can research on tht , its just wo w ) , the price adavantage of a 'domestic car' is instantly gone by a name change. they r lucky it dosen't flipped like camry in Europe.

I guess the Japanese know the real thing when they see it, and still buy more BMWs and Mercedes than fancy TOyotas

BMWexpert, your post cracked me up! :p

what did you just say?
the SC? HANDLING??!!!!!!!
*falls off chair laughing*

the SC is an ugly piece of crap, bought buy the biggest of posers who want the roof of a merc, but cheaper.

the sl, xk and 6 series beat the sc into pulp.

i'd rather have a pumpkin than an sc (not like i'll notice much difference)
and the sc is about as classy as las vegas, and as elegant as, well, a pumpkin.
and why would i want a super quiet engine?
so i can hear the stereo? because that is the ONLY good thing in that car.

This Jakemiller guy is hilarious. The SC is a great cruiser, no doubt, but in terms of handling, it cannot keep up with the European competitors. Arguably because it wasn't designed to be sporty.

"overpriced Kraut boxes" Ha! Nice racist comment. I hope that Lexus is the top selling luxury brand in the world. Therefore, I will still be able to order my BMWs and Audis in standard trasmission.

http://biz.yahoo.com/seekingalpha/061020/18927_id.html?.v=1

I just want to update this thread. Lexus is sellig 9x the amount of the LS460 that they estimated with 12,000 sold/ordered in the one month theyve been out. Lexus was estimating only 1,300.

Looks like Japan is taking them in easier than alot of people thought.