Does Toyota Have What It Takes To Seriously Challenge BMW And Mercedes-Benz As A Performance Brand?

Thanks for the hyperbole.

If by "Toyota" it's meant that the parent company will create this division for their Lexus brand, then, yes, it makes sense. If by "Toyota", they mean the Toyota brand, then no, it doesn't make sense, at least to try to compete with M, AMG, and RS. If Toyota planned on building cars to compete with Mustangs, Camaros, and Corvettes, then that might make sense. Otherwise, it would dilute the Lexus "F" cars.

Does Toyota/Lexus want to change their image to a performance company? Or is it a case of wanting a sub-set of models with some semblance of credibility while benefiting from racing experience/knowledge?

Nope...they are always years behind the Germans since they always play it safe and hardly ever innovate. That's their business model...reliable transportation. You can't have ground breaking performance and the latest technical innovation if your primary concern is reliability.

Then is that why so many expensive German cars are towards the unreliable end of the spectrum?

@222max You might want to fact check that, with few exceptions the Germans are well above average and better than several Japanese makes now.

Everyone knows the Germans only aspire to Japanese reliability...and yes the data shows that.

@Runamukk B-I-N-G-O-!

They have the engineering ability to compete with anyone. However they need the vision, will, and commitment to succeed product wise and image building programs marketing wise to catch up. If the Nissan GTR which was recently voted the most desirable sports car by readers of TOP GEAR magazine (this blew me away too) the Toyota has a real chance over time if it puts the pieces together. If I were them I would single out the M/3 and M/4's as the cars to beat, putting on a full court press internally to beat them. Leap frog or match these BMW models first and then expand the line. When you try to be a performance brand in all model segments before proving yourself in one model range you dilute your resources and the whole line suffers. Most comes entering a new area try to do too much too soon, never build the foundation necessary for success and pull their punches because money is spread too thin across too many areas of activity or models. Just saying...

They do, but why would Toyota go after BMW and Mercedes when it's not a premium brand?