Lexus getting a bit too big...
04-22-04 | 07:39 AM
#1
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Lexus Test Driver
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From: Texas
Lexus getting a bit too big...
http://www.autoweek.com/cat_content...._code=00064486
Lexus says its growth won't hurt brand's cachet
By MARK RECHTIN | Automotive News
LOS ANGELES -- Sales at Toyota's 15-year-old Lexus Division reached the 2 million mark this month, a milestone that is triggering concern about diminishing exclusivity for the luxury brand.
It took Lexus more than 10 years to sell its first million units in the United States but only four years and four months to sell its second million. And Denny Clements, Lexus Division general manager, projects that the third million will take just three years and six months.
Lexus is taking steps to protect its dealership service standards as its volumes increase. But executives say they aren't worried about becoming less exclusive and won't cap Lexus' growth.
Executives say buyer conquest and loyalty rates are rising simultaneously, a rare combination that they say accounts for the luxury brand's growth spurt.
Lexus sales have risen from 97,593 vehicles in 1997 to 259,755 units last year. Sales jumped 25.3 percent in the first quarter of this year compared with the same period in 2003.
But some analysts warn that Lexus is in danger of losing its cachet.
"There is always a risk that if everyone at the shopping center has a Lexus, then it's no longer of interest," says Todd Turner, analyst with Car Concepts in Thousand Oaks, Calif.
But Yuki Funo, CEO of Toyota Motor Sales U.S.A. Inc., says Lexus should sell as many vehicles as customers demand and not restrict volume.
"Luxury is not always because the product is rare," Funo says. "We are appealing to the luxury market by the strength of our product, franchise and customer service. Lexus has been successful in keeping the integrity of its franchise despite the volume growth."
Funo says there is more danger in failing to maintain customer service standards with a larger owner base than losing exclusivity.
Clements says Lexus dealers have invested $750 million to upgrade or expand their stores in the last 20 months.
The brand has grown in both loyalty and conquest rates over the past three years, according to consumer purchase data tracked by the Power Information Network.
Last year, 44 percent of all Lexus vehicles that were traded were done so to purchase another new Lexus vehicle, the Power data show. That compared with 31 percent in 2002. The figure in the first quarter of 2004 was 48 percent.
What's more, every luxury brand except Saab is seeing a greater percentage of its customers depart to Lexus than they were three years ago, according to Power.
Lexus says it had a conquest rate of nearly 70 percent in the 2003 model year, representing buyers who came to Lexus from another brand. The rate of buyers replacing a Lexus purchased new with another new Lexus was 54 percent in the 2003 model year.
By MARK RECHTIN | Automotive News
LOS ANGELES -- Sales at Toyota's 15-year-old Lexus Division reached the 2 million mark this month, a milestone that is triggering concern about diminishing exclusivity for the luxury brand.
It took Lexus more than 10 years to sell its first million units in the United States but only four years and four months to sell its second million. And Denny Clements, Lexus Division general manager, projects that the third million will take just three years and six months.
Lexus is taking steps to protect its dealership service standards as its volumes increase. But executives say they aren't worried about becoming less exclusive and won't cap Lexus' growth.
Executives say buyer conquest and loyalty rates are rising simultaneously, a rare combination that they say accounts for the luxury brand's growth spurt.
Lexus sales have risen from 97,593 vehicles in 1997 to 259,755 units last year. Sales jumped 25.3 percent in the first quarter of this year compared with the same period in 2003.
But some analysts warn that Lexus is in danger of losing its cachet.
"There is always a risk that if everyone at the shopping center has a Lexus, then it's no longer of interest," says Todd Turner, analyst with Car Concepts in Thousand Oaks, Calif.
But Yuki Funo, CEO of Toyota Motor Sales U.S.A. Inc., says Lexus should sell as many vehicles as customers demand and not restrict volume.
"Luxury is not always because the product is rare," Funo says. "We are appealing to the luxury market by the strength of our product, franchise and customer service. Lexus has been successful in keeping the integrity of its franchise despite the volume growth."
Funo says there is more danger in failing to maintain customer service standards with a larger owner base than losing exclusivity.
Clements says Lexus dealers have invested $750 million to upgrade or expand their stores in the last 20 months.
The brand has grown in both loyalty and conquest rates over the past three years, according to consumer purchase data tracked by the Power Information Network.
Last year, 44 percent of all Lexus vehicles that were traded were done so to purchase another new Lexus vehicle, the Power data show. That compared with 31 percent in 2002. The figure in the first quarter of 2004 was 48 percent.
What's more, every luxury brand except Saab is seeing a greater percentage of its customers depart to Lexus than they were three years ago, according to Power.
Lexus says it had a conquest rate of nearly 70 percent in the 2003 model year, representing buyers who came to Lexus from another brand. The rate of buyers replacing a Lexus purchased new with another new Lexus was 54 percent in the 2003 model year.
04-22-04 | 09:36 AM
#2
Now what hypocritical, pathetic, worm of an author would start out by writing all good things about how
and how....
and don't forget
CLEARLY showing that Lexus was growing in a positive direction, loyalty KEEPS on going up and this author has the audacity to say Lexus will get too big for it's britches?
It is clear the author suffers from post lexus ownership depression. It is a condition where they go out and buy an MB or Jag, etc... and realize they made the biggest mistake of their life. So the author can do nothing but quote facts, then try and trip it up with personal commentary thrown in.
It's pathetic.
Executives say buyer conquest and loyalty rates are rising simultaneously, a rare combination that they say accounts for the luxury brand's growth spurt.
Last year, 44 percent of all Lexus vehicles that were traded were done so to purchase another new Lexus vehicle, the Power data show. That compared with 31 percent in 2002. The figure in the first quarter of 2004 was 48 percent.
What's more, every luxury brand except Saab is seeing a greater percentage of its customers depart to Lexus than they were three years ago, according to Power.
Lexus says it had a conquest rate of nearly 70 percent in the 2003 model year, representing buyers who came to Lexus from another brand
Lexus says it had a conquest rate of nearly 70 percent in the 2003 model year, representing buyers who came to Lexus from another brand
CLEARLY showing that Lexus was growing in a positive direction, loyalty KEEPS on going up and this author has the audacity to say Lexus will get too big for it's britches?
It is clear the author suffers from post lexus ownership depression. It is a condition where they go out and buy an MB or Jag, etc... and realize they made the biggest mistake of their life. So the author can do nothing but quote facts, then try and trip it up with personal commentary thrown in.
It's pathetic.
Last edited by O. L. T.; 04-22-04 at 09:43 AM.
04-22-04 | 09:39 AM
#3
Lexus Fanatic
Joined: Oct 2003
Posts: 91,717
Likes: 90
From: Virginia/D.C. suburbs
IS300 jocks
Well, we IS300 jocks still are a comparatively rare breed The IS never has been that hugely popular....certainly not in the numbers the 3-series sells in. But let's wait and see what happens to the 3-series after you-know-who gets his hands on it and screws it up with I-Drive and active steering.
04-22-04 | 10:38 AM
#4
Lexus Champion
Joined: Jul 2002
Posts: 4,104
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From: Hamilton, NJ
The only thing I agree with in that whole article is the fact that "when everyone in the supermarket has a lexus, one tends to lose interest in it" and I am whole heartedly agreeing with that.
Yankeesdiva and I used to be the only GS's around here and it was great.. and now.. it seems like everyone does and I'm not a fan.
-Anthony
Yankeesdiva and I used to be the only GS's around here and it was great.. and now.. it seems like everyone does and I'm not a fan.
-Anthony
04-22-04 | 11:05 AM
#5
Originally posted by Captain Bone
The only thing I agree with in that whole article is the fact that "when everyone in the supermarket has a lexus, one tends to lose interest in it" and I am whole heartedly agreeing with that.
Yankeesdiva and I used to be the only GS's around here and it was great.. and now.. it seems like everyone does and I'm not a fan.
-Anthony
The only thing I agree with in that whole article is the fact that "when everyone in the supermarket has a lexus, one tends to lose interest in it" and I am whole heartedly agreeing with that.
Yankeesdiva and I used to be the only GS's around here and it was great.. and now.. it seems like everyone does and I'm not a fan.
-Anthony
04-22-04 | 11:15 AM
#6
Lexus Test Driver
Joined: Jan 2002
Posts: 8,764
Likes: 1
From: Treasury
“when everyone in the supermarket has a lexus, one tends to lose interest in it”
People are not buying Lexus vehicles because of its exclusivity. Outside this website, talk to normal Lexus owner and the word “quality” is the major selling point, period!
People are not buying Lexus vehicles because of its exclusivity. Outside this website, talk to normal Lexus owner and the word “quality” is the major selling point, period!
04-22-04 | 12:26 PM
#7
Instructor
Joined: Oct 2003
Posts: 794
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From: North Carolina
Originally posted by jpa2400
“when everyone in the supermarket has a lexus, one tends to lose interest in it”
People are not buying Lexus vehicles because of its exclusivity. Outside this website, talk to normal Lexus owner and the word “quality” is the major selling point, period!
“when everyone in the supermarket has a lexus, one tends to lose interest in it”
People are not buying Lexus vehicles because of its exclusivity. Outside this website, talk to normal Lexus owner and the word “quality” is the major selling point, period!
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04-22-04 | 03:14 PM
#9
Lexus Champion
Joined: Nov 2003
Posts: 2,206
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From: Florida
Originally posted by BrickHead
Thank you for pointing that out ! I will stick with Lexus as long as it continues to build reliable vehicles and offers great customer service. I can care less how many are parked in a shopping center at any given time.
Thank you for pointing that out ! I will stick with Lexus as long as it continues to build reliable vehicles and offers great customer service. I can care less how many are parked in a shopping center at any given time.
04-22-04 | 07:03 PM
#10
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Posts: n/a
when everyone in the supermarket has a lexus, one tends to lose interest in it"
Hell, BMW makes tons of 3s for years now, no one has a problem buying one today.
You and I are seeing more GSs
1. They are cheaper now (it is now a 7 year old car)
2. The ^&)(*()*&_ imitations (Altima, Maxima).
I'd rather a well established car that sells well that people respect than a car line no one gives a fig about but sells less, like SAAB, Infiniti, Volvo.
04-22-04 | 07:07 PM
#11
Lexus Fanatic
Joined: May 2003
Posts: 7,864
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From: Massachusetts
Every model except the RX and ES can still be considered exclusive
and fairly uncommon. Those two models make up a big piece of the pie
(I think as much as 65%, not sure).
I don't think the growth is anything to worry about for a long time.
and fairly uncommon. Those two models make up a big piece of the pie
(I think as much as 65%, not sure).
I don't think the growth is anything to worry about for a long time.
04-23-04 | 01:10 PM
#12
Lexus Test Driver
Joined: Feb 2003
Posts: 1,384
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From: 808
Originally posted by 1SICKLEX
Hell, BMW makes tons of 3s for years now, no one has a problem buying one today.
Hell, BMW makes tons of 3s for years now, no one has a problem buying one today.
I think majority of owners won't care if the car they're driving is seen everywhere. I don't. My MSM RX330 is becoming very common where I live, but I know that I have one of the rare interior colors in Hawaii, which is sexy black
, I'd say about 95% of RX330's on the road here are lined w/ light gray or ivory. I waited 84 days for this sucker to come in! So I'm content when I see other RX330's. I guess I'm not too conscious of how many Lexus vehicles are around, but more of the model I'm driving. I actually like seeing Lexus cars in parking lots! 
Accords & Camrys are the top sellers in the US, and their volumes keep on rising every year. I know the consumer is different than luxury brand consumers, but it sort of shows that people don't care what other people have, but like to satisfy themselves. As long as Lexus keeps on the cutting edge, re-designing the models consistently, adding more features (may sound weird, but if the RX330 wasn't available w/ the power tilt/telescoping w/ tilt-away, I wouldn't have purchased it), listening to consumers, and not charging for every single little detail (BMW), sales will remain strong and increase.
Toyota is a very smart company. Remember how the new 4-Runners used to come w/ that ugly, gray plastic fender flares and bumpers on SR5 and Sport Edition models? Now, all 4-Runners are monotoned; could it have been consumer complaint and low sales that changed it?
04-23-04 | 01:59 PM
#13
EV ftw!!!
Joined: Nov 2002
Posts: 8,604
Likes: 333
From: Lake Ontario
Originally posted by O. L. T.
This will not change the fact that it is still the same car you bought and love. Be flattered that your good taste has rubbed off
This will not change the fact that it is still the same car you bought and love. Be flattered that your good taste has rubbed off
I remember one of the reasons why I bought my GS back in November 2002, was the fact that it was very unique up here in Canada (it was not a strong reason, it was a distant third). Now however I actually look forward to seeing one the road. I wish they were more common.
When I see one, I say to myself - that person has good taste and knows about good cars.
Last edited by Hameed; 04-23-04 at 02:04 PM.
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