LexFather

SPAIN: Lexus tries out new approach to crack luxury market
26 Jan 2004
Source: just-auto.com editorial team




Toyota is using Spain to test whether a different approach for Lexus will help the brand finally crack the European luxury market.

According to Automotive News Europe, Spain is the only European market where distribution of Lexus and Toyota brands is handled separately and Toyota is using the country as a test market for the different approach.

Grupo Berge, Spain's largest importer, handled both Toyota and Lexus distribution until 2002. That year Toyota took control of its distribution but let the Spanish company continue to handle all Lexus imports.

The world's No. 3 carmaker is searching for a way to spark Lexus sales, which trail Audi, BMW, Mercedes-Benz and other competitors in Spain, its fourth biggest European market behind the UK, Germany and Italy.

Lexus is USA's No. 1 luxury brand - with sales of more than 259,755 units last year - but struggles in Europe where it sold less than 20,000 vehicles in western Europe last year.

Pedro Escudero, general director for Lexus Spain, said Toyota has separated the two marques to focus on managing the Lexus brand.

"We have developed an exclusive dealer network, with specific sales teams," Escudero said.

Lexus sales in Spain climbed 20% to 1,400 units in 2003. Escudero expects sales to reach 3,000 units in 2005. Each dealer is expected to invest at least €750,000 on the showroom, which must be at least 300 square metres.

Yoshio Ishizaka, Toyota's executive vice-president in charge of overseas operations, said Lexus sales have the "potential to go up to 50,000" a year in Europe in the medium term.

SCHEME

This is thier main problem. I was in London for a couple of months last year. Over there, Lexus gets no respect. First thing people say is "It's a Toytoa" they almost get offended if you were to compare a Lex and a MB or BMW. Another thing Lexus needs to do is start offering more trim packages. In the UK the only available GS is the (euro-tuned I guess) 300. The E-class on the other hand comes in about four or five base models from an E240 to a E55 to a desiel. Things in Europe are "class-based", and because Lexus dosn't compete with the high end S600 and S55, the whole brand suffers image-wise. if there were a LS500 or a high end sedan like that more people would respect the brand and go for a Lexus. A true 3-series competitor would also help.

SecPole14

Yes, I remember being surprised when I was in Spain this past summer with all the Lexus cars I saw. I probably saw less than 10 total, but still more than I expected.

But yeah, Lexus gets very little respect elsewhere. Our British neighbor said, half-jokingly "Isn't that just a fancy Toyoter?" when we bought the GS.

Richie

One of the bigest things that is holding Lexus (and other Japanese brands) back is that they do not offer diesel engines.
With the crazy gas prices in most of Europe, people prefer diesel engined cars if they drive more that 20 or 30k KMs.

VVT-i

Hybrid.. Faster, less polutions and less fuel consumption than deisel. I think Lexus will have at least 5 years ahead of competitor in Hybrid technology by the end of 2004.
Toyota/Lexus is heading into the right direction with the Hybrid and it will be global. While Europeans need diesel and some power combinations( and the less of the world), Toyota/Lexus anwser the question with Hybrid.
It won't be long when you go to Europe and see a lot of Lexus. I went to London and Paris about a year ago and I can count how many Lexus I saw in 1 week...less than 20.

Leets

Yes... which is why it's quality is superior to that of Daimler-Benz or BMW.

Richie

You've got a point there also but if they want to beat the Germans they will need a few diesel powered Lexi's.