LetMeShowU

I was thinking about this recently and was wondering what you guys thought about this. Do you suppose it would be possible for Toyota to eventually move more upmarket and offer more vehicles within the Lexus price range?

It seems as more and more time goes by, Lexus continues to expand, offering more variety of vehicles at a higher price range and now about to launch it's first car over 100K.

I was thinking about the new Avalon and when that first came out in 2005, how many people were thinking Toyota was crazy as it clearly was entering ES330 range (as far as price, available features, stronger or similar drivetrain, etc) and that buyers might cross shop the two (which they did and still do). But as time has proven, those two vehicles, although very similar, could equally coexist in this competitive market. So I'm wondering if Toyota could expand upon that and offer additional options for the Avalon, such as a V8 engine & more luxury features, or possibly start to offer a V8-only full size sedan and beyond.

I know the argument here is that there is no need for Toyota to do this as they already have Lexus to cater to the Luxury-buying customer. However, as both divisions continue to grow, the more and more it seems as if their paths are growing further and further apart (There has been speculation that the next ES350 for example will no longer share the Camry platform, etc). So, I can see where Toyota could possibly offer vehicles with different options, different stying, etc, from Lexus that perhaps would appeal more to someone willing to spend 40k on a car with such features. It wouldn't necessarily cannibalize Lexus sales either as not everyone desires or cares about having the Lexus badge, but rather what a car offers, what it's features are, etc.

I think it may be possible that the Toyota name could justify going more upmarket, as they have already proven they can sell cars for 35k (w/ the Avalon) and SUV's over 50k (the Landcruiser).

At the end of the day Toyota + Lexus = Toyota anyway, so I'm just wondering if you guys think that eventually, as the Lexus product line increases, that Toyota could increase as well and start offering more luxury-oriented vehicles.

PhilipMSPT

iTrader: (5)

Honestly, no.

VW tried to do it with the Phaeton, and it failed. However, if you put an Audi or Bentley badge on it, it does well.

Most consumers don't just pay for a car. They want prestige with the higher pricetag.

For example, within Toyota, the $50k Land Cruiser is one of the most awarded SUVs out on the road, but for $5k more, you can get the LX470. The Land Cruiser is becoming a rarity, and although it will most likely be redesigned, it really is spread thin as the LX takes all the hype for being a true luxury off-road SUV.

I can see Toyota building more quality products (they always have room for improvement). However, when price points blur (if Highlanders get as expensive as Sequoias, and Camrys get as expensive as Avalons), it's better to make those more expensive Highlanders and Camrys into RX and ES...

mmarshall

Toyota is already pretty much into Lexus territory NOW.


Top-level versions of the Avalon and Camry XLE already overlap the bottom end of the Lexus passenger-car lineup.....and, for 2007, unlike the past, may now be a better buy. The Lexus ES350, IMO, has been a marked disappointment, unlike the superb ES330 that preceeded it.

The same can be said for top-versions of the Sienna minivan, for two reasons....first, its plushness and refinement, and second, the lack of a Lexus-badged cousin.

Likewise, there is little difference between the present-generation Toyota Land Cruiser (a new one is coming shortly) and the Lexus LX470, besides several thousand dollars, a little more wood trim, and the LX's trick, height-adjustable suspension.

MikeP

Not positive about how current these numbers are, but there are about 1400 Toyota dealers and only 210 Lexus dealers in the U.S., suggesting that to a large portion of the country, Lexus vehicles are not easily available. Because of that disparity, I believe Toyota could successfully market one or more models in the $35-50K range. Lexus would still have the warranty and customer service advantage, so in those overlapping geographical areas, Lexus sales would probably not be hurt.

I would not like to see any more re-badging like the Camry/ES350 if Toyota does decide to add more upscale models. Lexus and Toyota automobiles need to have separate platforms.

Lexmex

In Mexico, the upper end Toyotas, like Camrys, are considered luxury vehicles. There is no Lexus here.

DASHOCKER

iTrader: (2)

I've seen a fully loaded 07 Highlander Hybrid sticker at 47k. I believe Toyota is already there..

GS3Tek

iTrader: (8)

Holy cow

I was at the dealer yesterday and saw an 06? RX hybrid for $40k.

Like philip said, the phaeton was the perfect and clear example.
Mmarshall mentioned that toyota is in the lexus territory...for a couple thousand more, you can get into lexus territory.

That's the mentality...why get a lower class maker when you can get into the luxury class for a couple thousands more.

LexFather

While some Toyota models do go into Lexus price territory, managment is pretty adamant of minimizing cross shopping. TOyota is the base brand, Lexus is the premium brand.

Looking at Acura and Infiniti, some of their issues are the cars are too similar in price and features. Lexus has done a much better job seperating themselves from their parent company.

So the answer is no

jdoggg1

Toyota is a far cry from VW in terms of reputation, so i dont think the phaeton is a good comparison. It COULD sell luxury cars, but if you remember from econ, markets are segmented. The same product can sell at multiple price points based on perceived value.

When lexus started, there was very little difference between the camry and the LS. However the Lexus name is a luxury name and commands a premium. Now that there are 3 distinct brands, it behooves them to not let one cannibalize the sales of either of the other.

While you can have small overlaps, to fully enter the others territory is going to hurt the image of at least one division.

I think the better option would be to put scion into toyota class than toyota into lexus class.

OC 335d

Another thing that hasn't really been mentioned but when you pay Lexus money, you would rather have Lexus service as opposed to Toyota service.

jdoggg1

True that, whenever my moms LS400 had issues, they picked up the car and dropped off a loaner. First class service for sure. Though... i'll be damned if i ever pay $100 for an oil change.

Her SL500 doesn't come with the same service her Lexus did, nor does my dads E55.

gshb

4runners can already hit the 40s. you have to understand though, in japan auto makers just make cars whether is small k-cars or big luxo cruisers. toyota makes the yaris and the V12 century with the same badge. in general things get messed up in the US where brand names are more important than the actual car. if you look at audi, bmw, and mercedes in germany, they all make low-end budget cars as well as the luxo cruisers. the a and b class are not considered anywhere near luxury. neither is the a2 and a3 from audi and the 1 series from bmw.

i dont know exactly toyotas intention when they created lexus, but im pretty sure it had something to do with breaking into a new market and to be able to import more cars into the US. same thing with mercedes. they dont sell the a or b class for fear of diluting the image. i guess this means americans are shallow? probably true...

LetMeShowU

Don't get me wrong, I'm not suggesting Toyota start offering vehicles costing 100k. But I think it may be possible to offer more than they currently do without necessarily intruding on Lexus territory.

For example, why couldn't Toyota offer a V8 option for its sedans? If Chrysler can put a V8 in the 300, why couldn't Toyota do the same for the Avalon? I don't think a V8 is a luxury option, so I fail to see why it is reserved exclusively for Lexus. The same can be said for an all-wheel drive option. I don't feel that it should only be exclusive to Lexus models and perhaps could be an option on the Avalon or Camry, or even the Corolla.

With all due respect in regards to the Phaeton, Volkswagen doesn't really have the brand respect and recognition that Toyota does. The fact that the Phaeton failed miserably is no surprise. Again, that's not to say that Toyota should offer an 80k sedan comparable to the LS460. But I see no reason why they couldn't offer a similar sized sedan with a V8, but with maybe different options, different styling, and different driving characteristics from an LS. Perhaps 45k, 50k tops? I believe it's possible and I don't necessarily think the Toyota name would keep potential customers from purchasing such vehicles simply because it's not as prestigious as the Lexus name. Toyota is so well respected for quality, buyers could easily justify the additional expense.

Like I suggested in my first post, the more and more the two divisions separate, the more I can see this being a possibility. A lot of the car buying public may not even be aware that Lexus is the luxury division of Toyota and may not want to switch brands after owning Toyotas for most of their lives. Yet they may still have the need for a car that offers more without a luxury badge on the grill.

As we recently learned, Toyota will be turning the Prius into its own division soon, which I think opens the door for other possibilities as well. They are clearly not playing by the rules and I don't think that's a bad thing at all. With as much as they are offering with the soon to be 4 separate divisions, product overlap is going to be inevitable and I think we may in fact see this happening in the near future.

O. L. T.

iTrader: (17)

Tooyta does sell a upper priced car, ......Lexus.

The lines are already blurring and there will be no use in having lexus if they do not cut toyota prices down some.

XeroK00L

In Japan the model name is the brand, at least for higher-end models that is. JDM models such as the Century, the Soarer, the Crown, etc., don't even carry the Toyota badge, but unique logos of their own, so they're recognized individually.