Detroit News: Lexus aims to conquer globe with luxury sales
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Interesting discussion of Lexus' push for an expanded global presence. Choice quotes:
Interesting discussion of Lexus' push for an expanded global presence. Choice quotes:
Americans prize comfort, reliability and attentive service -- the hallmarks of the Lexus brand. The Japanese revere heritage. Europeans want innovation above all, says Christoph Stürmer, Frankfurt, Germany-based auto analyst for Global Insight and co-author of the book 'Premium Power' about the German luxury car industry.
That poses a dilemma for top executives at Toyota's Aichi headquarters in Japan and at its U.S. sales operations in California: Should Lexus be adapted to each region or do they strive to refine one global identity for the brand?
Yuki Funo, a member of Toyota's board and the automaker's top manager in North America, said he believes Lexus should have one global identity.
"If we apply a lot of localization, we may be able to increase volumes faster, but that's not the right approach," he said in an interview. "We have to maintain the identity of the brand. That's different from Toyota, which should be localized. Lexus should be global."
That poses a dilemma for top executives at Toyota's Aichi headquarters in Japan and at its U.S. sales operations in California: Should Lexus be adapted to each region or do they strive to refine one global identity for the brand?
Yuki Funo, a member of Toyota's board and the automaker's top manager in North America, said he believes Lexus should have one global identity.
"If we apply a lot of localization, we may be able to increase volumes faster, but that's not the right approach," he said in an interview. "We have to maintain the identity of the brand. That's different from Toyota, which should be localized. Lexus should be global."
In Japan, Lexus got off to a bumpy start. That was partly a matter of timing: The market has been sliding since August 2005, when Lexus was launched. But after missing its initial sales targets, Lexus is closing the gap with Mercedes and BMW in Japan.
Through May, Mercedes sales fell from 20,464 vehicles to 17,796. BMW sales dipped to 17,570 from 18,874, while Lexus sales surged to 16,035 from 9,608. "The LS is clearly a very big part of the volumes," said auto analyst Andrew Phillips at Nikko Citigroup in Tokyo.
Indeed, Lexus would be ahead if it had the same lineup in Japan that it has in other countries. But many of its upscale models are sold under the Toyota brand. For instance, the RX is known in Japan as the Toyota Harrier. Phillips expects Lexus to grow as the automaker transfers more Toyota vehicles to its premium brand.
"They have a heritage there that's different than what they bring to new markets," Nerad said, "that being the heritage of the Toyota corporation."
Through May, Mercedes sales fell from 20,464 vehicles to 17,796. BMW sales dipped to 17,570 from 18,874, while Lexus sales surged to 16,035 from 9,608. "The LS is clearly a very big part of the volumes," said auto analyst Andrew Phillips at Nikko Citigroup in Tokyo.
Indeed, Lexus would be ahead if it had the same lineup in Japan that it has in other countries. But many of its upscale models are sold under the Toyota brand. For instance, the RX is known in Japan as the Toyota Harrier. Phillips expects Lexus to grow as the automaker transfers more Toyota vehicles to its premium brand.
"They have a heritage there that's different than what they bring to new markets," Nerad said, "that being the heritage of the Toyota corporation."
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In Japan, Lexus got off to a bumpy start. That was partly a matter of timing: The market has been sliding since August 2005, when Lexus was launched. But after missing its initial sales targets, Lexus is closing the gap with Mercedes and BMW in Japan.
Subaru, on the other hand, was smart. They tried mass-marketing in the U.S., like Honda and Toyota, in the early 90's.....it just didn't work. So they wisely forgot about huge sales numbers, concentrated on quality and AWD marketing instead (though there were a few issues with head gaskets and rear wheel bearings), introduced the very successful Outback, Forester, and WRX/STi, and the rest is history.
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This is how automakers get into trouble, though. They set sales "targets" where quantity becomes more important than quantity, meet them, and then set even higher "goals", losing even more quality in the process, in a vicious circle, until customers finally start leaving. That is what happened to GM over several decades.....I hope it doesn't happen to Toyota and Lexus.
Subaru, on the other hand, was smart. They tried mass-marketing in the U.S., like Honda and Toyota, in the early 90's.....it just didn't work. So they wisely forgot about huge sales numbers, concentrated on quality and AWD marketing instead (though there were a few issues with head gaskets and rear wheel bearings), introduced the very successful Outback, Forester, and WRX/STi, and the rest is history.
Subaru, on the other hand, was smart. They tried mass-marketing in the U.S., like Honda and Toyota, in the early 90's.....it just didn't work. So they wisely forgot about huge sales numbers, concentrated on quality and AWD marketing instead (though there were a few issues with head gaskets and rear wheel bearings), introduced the very successful Outback, Forester, and WRX/STi, and the rest is history.
"If we apply a lot of localization, we may be able to increase volumes faster, but that's not the right approach," he said in an interview. "We have to maintain the identity of the brand. That's different from Toyota, which should be localized. Lexus should be global."
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Hahah. He and Putin are probably good buddies since Putin seems to be turning Russia into a Police State again. I look at America and I'm disappointed in some things, but I look at Russia and I say: "Wow, at least we dont have it that bad. Those people are happy Putin is stomping on their rights"
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