Lexus to increase its sporty quotient (Updated)
11-14-11, 07:19 AM
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Lexus to increase its sporty quotient (Updated)
http://usat.ly/vJXJzA
Lagging Lexus aims at creating exciting, sporty new image
By James R. Healey and Chris Woodyard, USA TODAY
When Toyota was preparing for the 1989 launch of Lexus, the man appointed to birth the luxury brand, J. Davis Illingworth, often said: "We don't have a single dissatisfied customer."
Disingenuous, of course, because the gestating Lexus had no customers at all. But the strongly implied remainder — "… and we intend to keep it that way" — helped raise the bar for luxury car brands.
But now, after phenomenal growth that made Lexus the top-selling luxury auto brand in the U.S. from 2001 through last year, the marque is tumbling. This year, it's unlikely to finish better than third behind BMW and Mercedes-Benz.
Worse, its once-unassailed reliability and its engaging, concierge-style sales process have withered, leaving the previous standard-bearer to chase other brands, according to recent reliability and sales satisfaction surveys by consultant J.D. Power and Associates.
Lexus faltered by failing to have a regular flow of new designs to keep excitement percolating, just as it also ran short of cars to sell after the tsunami in Japan.
And recalls it shared with Toyota over complaints of unintended acceleration tainted its good name, at least temporarily.
"They need a lot of work," says Milton Pedraza, CEO of the Luxury Institute brand tracker. "A lot of brands, such as Cadillac, are catching up."
Indeed, Lexus has gone to work:
"We've always said we should treat customers like guests in our home," Templin says. "So we thought, how about treating them like guests in their own homes" to learn from the candid comments likely in a convivial setting.
"We bring in a renowned chef and cook for the people and their guests. Then we bring out the wine — 'truth serum,' I call it — and just listen."
Insights haven't always been the expected.
A woman at one dinner drove a European brand that was nothing but trouble. Other guests asked her why she kept the vehicle, and she replied, as Templin recalls, "It's like a bad boyfriend. He lets you down but you keep coming back because he looks so good."
Perhaps more useful for marketing:
"The most surprising thing I've heard — people who drive $80,000 luxury cars let their teenage kids pick the cars," Templin says. "It's because guys our age don't want to get old," so they drive cars that resonate with young people.
Another woman mentioned at a dinner that she was set to buy a certain convertible, but backed off when her kids said it wasn't cool enough for her.
Templin: "I went back to my team and said, 'Guys, we need to work on (appealing to) this new group'" of young folks who influence more purchases than was supposed.
Lexus is aggressively using social media, something perhaps out of step with Lexus' stodgy image. Twitter is a big target, and Lexus monitors users who have large followings.
About four months ago, one of the Twitterati mentioned in a tweet that he was at a Starbucks coffee shop. A Lexus manager noticed. He called the Starbucks and arranged for the barista to treat the guy to a cup of coffee. The coffee-drinker promptly tweeted how well Lexus had taken care of him.
Lexus spokeswoman Nancy Hubbell says Lexus has picked up more than 270,000 Twitter followers in less than two years, and has sent about 2,600 tweets since August 2010.
Lexus tries to be chatty and not to turn off followers by overtly trying to sell cars, says Hubbell, who tweets from the owner dinners.
Commendable, but not valuable unless the fundamentals are in place, Pedraza says: "Social media is a megaphone, but it can't make up for bad service or a recall." Even if Lexus does everything just right, it faces a huge challenge: the changing definition of luxury.
"You can buy a mass-market brand with luxury features and have a virtual luxury car without the nameplate. That's what a lot of smart consumers are doing," says Pam Danziger, president of Unity Marketing and author of the book Putting the Luxe Back in Luxury. "An affluent consumer doesn't need to drive around in a Mercedes to prove something. Those people don't need the logo. They know they've made it," she says.
Two of the hottest brands now, Ford and Hyundai, are leaders in, as Danziger puts it, "blurring the line between mass and class."
The Fiesta is Ford's smallest, cheapest economy car, starting at about $14,000, yet "one of the most popular options is heated leather seats. That's on a Fiesta. … This is a tremendous change in the automotive industry," Ford CEO Alan Mulally said earlier this year, explaining to analysts and journalists why small cars can bring big profits.
Hyundai offers heated leather seats, front and rear, and a backup camera, in a $22,000 version of its Elantra compact.
And Hyundai, still regarded by many Americans as a discount brand, struggled with how to enter the luxury market when it launched the 2009 Genesis sedan and again when it introduced the ultra-luxury 2011 Equus.
"We thought that the one thing we could do is save owners time, and not make them visit the dealership," says John Krafcik, CEO of Hyundai Motor America.
So Hyundai's high-end Equus features valet delivery and pickup for owners when the cars need service. Those shopping for an Equus don't have to go a showroom. The dealer will send a representative to them so they can shop at home.
Right direction, Lexus' Templin agrees. "Price alone doesn't say anything. It's not about price. Our customers tell us that luxury is about saving my time and making my life easier. Just so, Danziger says: "If you work hard you can always make more money. But what you can't make more of is time."
But any effort to court buyers in the auto industry must be built on desirable vehicles, history has said, over and over. "Let's face it, product drives our business. When you have new product, you'll sell more cars," Templin says.
These are key models in the Lexus portfolio:
•LFA. Hand-built, $375,000, 552-horsepower, 202-mph supercar launched early this year as a 2012 model. Only 500 are to be built. The car's about as un-Lexus as imaginable, but developing it challenged Lexus to think differently about the brand and to re-examine what makes a car satisfying.
"When we saw we could build a supercar that was refined enough to be used as a daily driver, we wanted to move that direction," Templin says.
•CT 200h. Small, gas-electric hybrid launched in March as a 2011 model, priced from about $30,000. Hyped as a "bad boy" hybrid, it was the first showroom Lexus to demonstrate the sporty, crisp feel the brand hopes will suffuse all its new models.
It makes sense for such a "statement" car to be a hybrid, Templin says, because Lexus' overseas models are almost all hybrids. Begun as a U.S.-only brand, Lexus now gets half of its sales outside the U.S.
•GS. A new version of the midlevel luxury sedan coming next year will be first to feature both the new signature front end and the improved handling that Lexus promises. It kicks off the rollout of nine new or significantly updated Lexus models meant to revitalize sales and redefine the brand.
Lagging Lexus aims at creating exciting, sporty new image
By James R. Healey and Chris Woodyard, USA TODAY
When Toyota was preparing for the 1989 launch of Lexus, the man appointed to birth the luxury brand, J. Davis Illingworth, often said: "We don't have a single dissatisfied customer."
Disingenuous, of course, because the gestating Lexus had no customers at all. But the strongly implied remainder — "… and we intend to keep it that way" — helped raise the bar for luxury car brands.
But now, after phenomenal growth that made Lexus the top-selling luxury auto brand in the U.S. from 2001 through last year, the marque is tumbling. This year, it's unlikely to finish better than third behind BMW and Mercedes-Benz.
Worse, its once-unassailed reliability and its engaging, concierge-style sales process have withered, leaving the previous standard-bearer to chase other brands, according to recent reliability and sales satisfaction surveys by consultant J.D. Power and Associates.
Lexus faltered by failing to have a regular flow of new designs to keep excitement percolating, just as it also ran short of cars to sell after the tsunami in Japan.
And recalls it shared with Toyota over complaints of unintended acceleration tainted its good name, at least temporarily.
"They need a lot of work," says Milton Pedraza, CEO of the Luxury Institute brand tracker. "A lot of brands, such as Cadillac, are catching up."
Indeed, Lexus has gone to work:
- It intends to reinvent itself with new-think, new-look cars, starting next year, that it promises will excite drivers, not just coddle them.
"Customers want cars to be much more emotional," and Lexus should have "been quicker to offer a more emotional experience," says James Lentz, COO of Toyota Motor Sales, the U.S. unit for marketing Toyota and Lexus brands here.
The new look is defined by a massive grille, and Lexus knows that it could trigger a love/hate reaction. Big change for the perennially conservative Lexus, but a worthwhile risk, in Lexus' view.
. - Lexus has trouped cross-country, setting up tents at dealerships to train employees in the kinds of customer-first attitudes that Illingworth, who retired from Toyota in 2009, had in mind 22 years ago.
"The people who've been around 22 years need a new dose of it, and the others have never been exposed to it," says Mark Templin, general manager of Lexus and a Toyota Motor group VP.
. - It has engineered a series of lavish dinners in Lexus owners' homes in high-dollar ZIP codes to listen to owners and a dozen or so of their invited-to-dinner friends who drive other luxury brands.
"We've always said we should treat customers like guests in our home," Templin says. "So we thought, how about treating them like guests in their own homes" to learn from the candid comments likely in a convivial setting.
"We bring in a renowned chef and cook for the people and their guests. Then we bring out the wine — 'truth serum,' I call it — and just listen."
Insights haven't always been the expected.
A woman at one dinner drove a European brand that was nothing but trouble. Other guests asked her why she kept the vehicle, and she replied, as Templin recalls, "It's like a bad boyfriend. He lets you down but you keep coming back because he looks so good."
Perhaps more useful for marketing:
"The most surprising thing I've heard — people who drive $80,000 luxury cars let their teenage kids pick the cars," Templin says. "It's because guys our age don't want to get old," so they drive cars that resonate with young people.
Another woman mentioned at a dinner that she was set to buy a certain convertible, but backed off when her kids said it wasn't cool enough for her.
Templin: "I went back to my team and said, 'Guys, we need to work on (appealing to) this new group'" of young folks who influence more purchases than was supposed.
Lexus is aggressively using social media, something perhaps out of step with Lexus' stodgy image. Twitter is a big target, and Lexus monitors users who have large followings.
About four months ago, one of the Twitterati mentioned in a tweet that he was at a Starbucks coffee shop. A Lexus manager noticed. He called the Starbucks and arranged for the barista to treat the guy to a cup of coffee. The coffee-drinker promptly tweeted how well Lexus had taken care of him.
Lexus spokeswoman Nancy Hubbell says Lexus has picked up more than 270,000 Twitter followers in less than two years, and has sent about 2,600 tweets since August 2010.
Lexus tries to be chatty and not to turn off followers by overtly trying to sell cars, says Hubbell, who tweets from the owner dinners.
Commendable, but not valuable unless the fundamentals are in place, Pedraza says: "Social media is a megaphone, but it can't make up for bad service or a recall." Even if Lexus does everything just right, it faces a huge challenge: the changing definition of luxury.
"You can buy a mass-market brand with luxury features and have a virtual luxury car without the nameplate. That's what a lot of smart consumers are doing," says Pam Danziger, president of Unity Marketing and author of the book Putting the Luxe Back in Luxury. "An affluent consumer doesn't need to drive around in a Mercedes to prove something. Those people don't need the logo. They know they've made it," she says.
Two of the hottest brands now, Ford and Hyundai, are leaders in, as Danziger puts it, "blurring the line between mass and class."
The Fiesta is Ford's smallest, cheapest economy car, starting at about $14,000, yet "one of the most popular options is heated leather seats. That's on a Fiesta. … This is a tremendous change in the automotive industry," Ford CEO Alan Mulally said earlier this year, explaining to analysts and journalists why small cars can bring big profits.
Hyundai offers heated leather seats, front and rear, and a backup camera, in a $22,000 version of its Elantra compact.
And Hyundai, still regarded by many Americans as a discount brand, struggled with how to enter the luxury market when it launched the 2009 Genesis sedan and again when it introduced the ultra-luxury 2011 Equus.
"We thought that the one thing we could do is save owners time, and not make them visit the dealership," says John Krafcik, CEO of Hyundai Motor America.
So Hyundai's high-end Equus features valet delivery and pickup for owners when the cars need service. Those shopping for an Equus don't have to go a showroom. The dealer will send a representative to them so they can shop at home.
Right direction, Lexus' Templin agrees. "Price alone doesn't say anything. It's not about price. Our customers tell us that luxury is about saving my time and making my life easier. Just so, Danziger says: "If you work hard you can always make more money. But what you can't make more of is time."
But any effort to court buyers in the auto industry must be built on desirable vehicles, history has said, over and over. "Let's face it, product drives our business. When you have new product, you'll sell more cars," Templin says.
These are key models in the Lexus portfolio:
•LFA. Hand-built, $375,000, 552-horsepower, 202-mph supercar launched early this year as a 2012 model. Only 500 are to be built. The car's about as un-Lexus as imaginable, but developing it challenged Lexus to think differently about the brand and to re-examine what makes a car satisfying.
"When we saw we could build a supercar that was refined enough to be used as a daily driver, we wanted to move that direction," Templin says.
•CT 200h. Small, gas-electric hybrid launched in March as a 2011 model, priced from about $30,000. Hyped as a "bad boy" hybrid, it was the first showroom Lexus to demonstrate the sporty, crisp feel the brand hopes will suffuse all its new models.
It makes sense for such a "statement" car to be a hybrid, Templin says, because Lexus' overseas models are almost all hybrids. Begun as a U.S.-only brand, Lexus now gets half of its sales outside the U.S.
•GS. A new version of the midlevel luxury sedan coming next year will be first to feature both the new signature front end and the improved handling that Lexus promises. It kicks off the rollout of nine new or significantly updated Lexus models meant to revitalize sales and redefine the brand.
Last edited by DaveGS4; 11-14-11 at 07:40 AM.
11-14-11, 07:48 AM
#2
Cool article. I do think Lexus is on the right track, and with Akio at the helm and more dedicated than ever, I hope that the best is yet to come.
One thing that concerns me is Toyota's commitment to pumping the necessary money and resources into Lexus. For example, with the new GS, the V6 and transmission - the heart of the car - are carryovers from the old model. There were a few instances where the engineers were asked about the decision to carry over this hardware from the 3GS, and they mentioned that it was either the 12.3 inch multimedia screen or the 8AT, presumably due to budget constraints/price concerns.
For an all new model that is supposed to be the forbearer of the future of Lexus, I'd have expected them to be less willing to make such concessions, especially on the engine and transmission. It is obviously Toyota bean counters calling the shots on such moves, so I really hope that this "new" Lexus inspires a change of thinking from the top down - a commitment to making Lexus cars the best luxury performance cars that you can buy. Such cars need to be the product of a new type of thinking, not an "ultra Toyota" mindset, as Akio seems to have hinted was the case previously.
One thing that concerns me is Toyota's commitment to pumping the necessary money and resources into Lexus. For example, with the new GS, the V6 and transmission - the heart of the car - are carryovers from the old model. There were a few instances where the engineers were asked about the decision to carry over this hardware from the 3GS, and they mentioned that it was either the 12.3 inch multimedia screen or the 8AT, presumably due to budget constraints/price concerns.
For an all new model that is supposed to be the forbearer of the future of Lexus, I'd have expected them to be less willing to make such concessions, especially on the engine and transmission. It is obviously Toyota bean counters calling the shots on such moves, so I really hope that this "new" Lexus inspires a change of thinking from the top down - a commitment to making Lexus cars the best luxury performance cars that you can buy. Such cars need to be the product of a new type of thinking, not an "ultra Toyota" mindset, as Akio seems to have hinted was the case previously.
11-14-11, 11:52 AM
#3
Lexus Fanatic
iTrader: (20)
good article. 
spoke to a teenager recently about car brands and she didn't like mercedes or lexus because she said "they're for old people". 
yes lexus, you've got some work to do.
"The most surprising thing I've heard — people who drive $80,000 luxury cars let their teenage kids pick the cars," Templin says. "It's because guys our age don't want to get old," so they drive cars that resonate with young people.
yes lexus, you've got some work to do.
11-14-11, 12:00 PM
#4
Lexus Champion
Alright fine then
Wait till some cool guy brings out a Lexus IS-F and wipes the @$$ of that Toyota Yaris she's driving
So what did she say again about premium cars being only for cool people and regular cars (Yaris, Civic, Corolla, Sentra/Sunny, etc.) being only for those who are young and hip???
11-14-11, 12:01 PM
#5
Lexus Fanatic
iTrader: (20)
It is obviously Toyota bean counters calling the shots on such moves, so I really hope that this "new" Lexus inspires a change of thinking from the top down - a commitment to making Lexus cars the best luxury performance cars that you can buy. Such cars need to be the product of a new type of thinking, not an "ultra Toyota" mindset, as Akio seems to have hinted was the case previously.
problem is, the lexus division is a rounding error on the bottom line, so it's hard for the company to commit huge dollars to it, although of course they did for the lf-a. the lf-a doesn't seem to be selling out so maybe that's making them hesitant. also, who can blame them with the state of the economy, but as the article says, the aging line-up, a tsunami and recalls were kind of a triple whammy, letting the competition catch up in product, and go ahead, in sales. the lexus division is an 'expansion' part of toyota whereas for bmw or mercedes, it's their entire existence. but toyota has to be bold and innovative to make the automotive world respect lexus more.as an aside, this past weekend i spent quite a bit of time in 2010 rx350. definitely a nice vehicle, but really didn't feel very luxurious. come on toyota - blow me away! yes the lf-a did that, but that's pretty rarefied air.
11-14-11, 12:03 PM
#6
Lexus Fanatic
iTrader: (20)
Hehe so premium cars are "ALWAYS" for old people? yeah right lol :P
Alright fine then
Wait till some cool guy brings out a Lexus IS-F and wipes the @$$ of that Toyota Yaris she's driving
So what did she say again about premium cars being only for cool people and regular cars (Yaris, Civic, Corolla, Sentra/Sunny, etc.) being only for those who are young and hip???
Alright fine then
Wait till some cool guy brings out a Lexus IS-F and wipes the @$$ of that Toyota Yaris she's driving
So what did she say again about premium cars being only for cool people and regular cars (Yaris, Civic, Corolla, Sentra/Sunny, etc.) being only for those who are young and hip???
and trendy, etc.she wouldn't be caught dead in a toyota.
11-15-11, 02:36 PM
#7
Lexus Fanatic
I read the article today. It sums of the problems at Lexus in that they pretty much have lost focus on what made them so good.
The part that sums it up the most is where the female makes reference about a bad *** boyfriend who causes problems but always wants to go back because they look so good.
The part that sums it up the most is where the female makes reference about a bad *** boyfriend who causes problems but always wants to go back because they look so good.
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11-15-11, 06:14 PM
#8
great article and some good posts here. i always wonder if it's something to do with 'hitting a balance". in some way i think it's like the 3 brands are quite "equal" now so owners are going in between them rather than flowing from mb and bmw to lexus. lexus lost focus for a few years, but i have a feeling they are getting back together and hopefully it will strengthen the image further
11-15-11, 07:19 PM
#9
Lexus Fanatic
iTrader: (20)
saw a black equus at starbucks today. i thought it was stunning. i couldn't help but compare it to an ls460l, which is definitely nice, but to me now has less presence. lexus needs to step up their game a LOT with the next LS!
07-29-13, 06:11 AM
#10
Update
Lexus has a reputation for great quality, but it doesn't get much credit for personality.
Toyota's luxury arm will try to reverse that by adding a slew of sporty new models in the next few years. It also will jazz up its engine lineup -- following the Audi and BMW example -- by offering a 2.0-liter turbo engine in entry-luxury vehicles and as a base engine for mid-sized vehicles. The turbo is expected to be in the 250-hp range.
Lexus also is expanding into the compact crossover segment.
Here is a look at Lexus' future product plans.
CT 200h: A freshening for the 2014 model year includes more telematics features. No major changes are planned until a spring 2016 redesign. The CT 200h will remain a hybrid-only offering; no turbo version is planned.
IS: The sedan was re-engineered this summer. 1 possible mid-cycle change in mid-2016 would be the addition of a 2.0-liter turbo with an 8-speed dual-clutch transmission to replace the aging 2.5-liter V-6 as the base engine. The IS-C coupe goes away with the introduction of the RC nameplate.
ES: Re-engineered in summer 2012.
GS: Re-engineered in spring 2012.
LS: Re-engineered in summer 2012.
RC: The LF-CC coupe concept from the 2012 Paris auto show will become the Lexus RC 350 when unveiled in production form at the Tokyo Motor Show in November. It will use the IS/GS platform and will be powered by a 3.5-liter, 306-hp V-6 engine. The high-performance RC-F version debuting at the Detroit auto show in January will have a 460-hp V-8 under the hood, which Lexus hopes will steal sales from the BMW M3.
The production version of the LF-LC concept is on the fast track to arrive in late 2015.
LF-LC: After its rave reception at the 2012 Detroit show, Lexus' flagship coupe concept received a green light from CEO Akio Toyoda. This 2+2 hybrid-powered coupe, which is likely to cost about $120,000, will be more akin to a high-performance LFA lite than a successor to the portly SC coupe. Toyoda has fast-tracked it to arrive in late 2015.
LFA: Lexus built 500 of the supercars for worldwide consumption, but its run is done. No convertible version is planned.
NX: A smaller global crossover vehicle derived from the RAV4 platform will compete with the Audi Q3 and BMW X1. Toyota applied for a trademark for NX 200t and NX 300h, which points to a 2.0-liter turbo and a hybrid with the equivalent power of a 3.0-liter V-6. The turbo will arrive 1st in the fall of 2014, and the hybrid will arrive early in 2015.
RX: Last summer's midcycle sheet metal freshening was so dramatic that Lexus pushed the RX redesign to 2015. The RX's 5-seat Camry/Avalon-based footprint will stay the same because it will be a global model.
To pacify European and Japanese clients, a turbo-4 engine will be offered, although maybe not in the United States.
GX: The 2014 midcycle freshening for the truck-based SUV includes a trapezoidal fascia and more telematics, although there will be such cost-cutting measures as manual third-row seats. The GX will be removed from the lineup in the fall of 2016 to make room for the car-based TX.
TX: Talk about missed opportunities. It has been 10 years since Lexus unveiled the HPX 7-seat car-based crossover concept at the New York auto show -- and we'll wait at least 3 more years to see a production version on public roads when it arrives in late 2016 or early 2017. Toyota has applied for a trademark for the TX nameplate. Toyota is secretive about whether the TX would use the RX-Avalon front-wheel-drive architecture for packaging benefits or use the IS/GS rear-wheel-drive architecture for a sportier feel.
LX: Because the incremental volume and huge profits of the top-line SUV helps justify Toyota's investment in the Land Cruiser, the LX won't go away. Expect a stretched cycle, well beyond the normal 7 years, to at least 2016.
07-29-13, 07:19 AM
#11
Eeh...... Sounds good but where's the fun? Lexus is taking way too long to put these vehicles out and these seem to all be grocery getters apart from the RC/LF CC while Lexus is working on fighting the X1 and other random models the Germans are closing gaps like braces
07-29-13, 08:29 AM
#12
I hope this "increasing sporty quotient" is true, because recently Lexus considered axing the F marque in favor of simply F-Sport as it's wildly popular. My manager is on the Lexus Product Council and relayed the message to me. I was dumbfounded as was he. F is apparently not a big seller.. well duh you only had the IS-F and very limited LFA. Now seeing the actual GS-F in the RC-F thread proves otherwise but what's been said has been said. This is all coming from the same guys who were going to price the upcoming NX near $50K fully loaded (um RX already reaches that and NX is smaller 
), Anyway now it's just me ranting, but good news RC and NX will be out in late 2014 as 15 models
That's cool
), Anyway now it's just me ranting, but good news RC and NX will be out in late 2014 as 15 models
Lexus is aggressively using social media, something perhaps out of step with Lexus' stodgy image. Twitter is a big target, and Lexus monitors users who have large followings.
About four months ago, one of the Twitterati mentioned in a tweet that he was at a Starbucks coffee shop. A Lexus manager noticed. He called the Starbucks and arranged for the barista to treat the guy to a cup of coffee. The coffee-drinker promptly tweeted how well Lexus had taken care of him.
About four months ago, one of the Twitterati mentioned in a tweet that he was at a Starbucks coffee shop. A Lexus manager noticed. He called the Starbucks and arranged for the barista to treat the guy to a cup of coffee. The coffee-drinker promptly tweeted how well Lexus had taken care of him.
07-29-13, 08:37 AM
#13
Lexus Fanatic
iTrader: (20)
a joint lexus / starbucks promo could be awesome. 
