Lexus Confronts Midlife Crisis With Aging SUVs Losing to Rivals
12-30-19, 12:33 PM
#1
Lexus Fanatic
Thread Starter
Lexus Confronts Midlife Crisis With Aging SUVs Losing to Rivals
Lexus Confronts Midlife Crisis With Aging SUVs Losing to Rivals
https://www.bloomberg.com/news/artic...sing-to-rivals
Big red bows and the “December to Remember” tagline of year-end Lexus ads have become as much a part of the holiday season as lawn ornaments and tacky sweaters. But the upscale brand has less to celebrate this year in the U.S., with sales flat and few new vehicles to showcase.
Thirty years after its debut shocked established German automakers, demand for Toyota Motor Corp.’s luxury brand has stalled, with sales on track to trail BMW AG and Daimler AG’s Mercedes-Benz. Once the unquestioned leader of the pack, it hasn’t taken the top slot in the U.S. since 2010. Its market share of 13% is down from a peak of 18.2% a decade ago, according to car-shopping researcher Edmunds.
Lexus has run its “December to Remember” promotion for 20 of its 30 years in existence.
Source: Lexus
Lexus’s 30th anniversary brake-tap is a reflection of its aging vehicle lineup, increased competition and an inability to keep pace with American buyers’ growing demand for larger sport utility vehicles. Two of its SUVs haven’t undergone a full model change in a decade, and the addition of a cramped three-row option to its popular RX model in late 2017 hasn’t won over as many cross-shoppers as hoped.
“Lexus has lost some of its luster,” said Jake Fisher, senior director of auto testing at Consumer Reports, who points to gains by rivals such as Hyundai Motors Co.’s Genesis brand. “Genesis is taking that baton. They are what Lexus used to be: affordable, comfy and stress-free.”
Source: Edmunds
Note: Luxury market share figure for 2019 is through November
Toyota executives and dealers say the pause will be temporary ahead of a product blitz over the next two years. Noting that Lexus sales are “about flat” this year, Bob Carter, Toyota’s top sales executive in North America, told reporters earlier this month that a refreshed version of Lexus’ top-selling RX is on its way as a prelude to more vehicles headed for U.S. showrooms.
“A lot of new product is coming this way for Lexus down the road,” he said.
“We know 2019 was a year that we missed it,” Paul LaRochelle, general manager of a Lexus franchise in Annapolis, Maryland, and chair of the brand’s dealer council, said in an interview. “We will see Lexus making significant gains in the market over the next two, three, four, five years and beyond.”
Lexus’s plans include long-awaited updates to existing SUVs and at least one all-new mid-size SUV, he said. “The best way to put it would be a luxury seven- or eight-passenger people-mover.”
Jason Shelton, a 42-year old general manager at a telecom company, wants to upgrade his RX to a larger vehicle but says the outdated styling of Lexus SUVs is a turnoff. “Frankly, we’re hoping it is updated by the time the lease is up next year so we can get the bigger vehicle. Otherwise we will probably move to a different company,” the Nashville-area resident said.
Once mostly geared for the U.S., Lexus has increasingly become a global brand with rapid growth in China and Europe, where small crossovers dominate sales. Its most recent vehicle premieres took place in those two markets, including the UX compact crossover last year in Geneva and an electric-powered variant -- the brand’s first EV -- last month in Guangzhou. That has raised questions among some dealers and brand watchers about whether the U.S. now takes a back seat to other markets when it comes to investment priorities and vehicle development.
“It’s definitely been a slow time for the brand, and that’s what happens when you don’t have product to talk about,” said Kevin Watts, editor of the influential fan blog Lexus Enthusiast.
Lexus officials say the U.S. market has not been forgotten by executives in Toyota City. “Behind the curtain right now, what’s going on is that everything -- all the attention -- in Japan is to get Lexus back in the game with a tremendous lineup over the next few years,” said LaRochelle of the dealers’ council.
Those assurances from top Toyota officials came during an October meeting in Washington, where dealers said the vehicle highest on their wish list is an 18-foot long SUV akin to General Motors Co.’s GMC Yukon Denali XL. “That is one of our primary asks and one that they’re looking at,” LaRochelle said.
https://www.bloomberg.com/news/artic...sing-to-rivals
Big red bows and the “December to Remember” tagline of year-end Lexus ads have become as much a part of the holiday season as lawn ornaments and tacky sweaters. But the upscale brand has less to celebrate this year in the U.S., with sales flat and few new vehicles to showcase.
Thirty years after its debut shocked established German automakers, demand for Toyota Motor Corp.’s luxury brand has stalled, with sales on track to trail BMW AG and Daimler AG’s Mercedes-Benz. Once the unquestioned leader of the pack, it hasn’t taken the top slot in the U.S. since 2010. Its market share of 13% is down from a peak of 18.2% a decade ago, according to car-shopping researcher Edmunds.
Lexus has run its “December to Remember” promotion for 20 of its 30 years in existence.Source: Lexus
Lexus’s 30th anniversary brake-tap is a reflection of its aging vehicle lineup, increased competition and an inability to keep pace with American buyers’ growing demand for larger sport utility vehicles. Two of its SUVs haven’t undergone a full model change in a decade, and the addition of a cramped three-row option to its popular RX model in late 2017 hasn’t won over as many cross-shoppers as hoped.
“Lexus has lost some of its luster,” said Jake Fisher, senior director of auto testing at Consumer Reports, who points to gains by rivals such as Hyundai Motors Co.’s Genesis brand. “Genesis is taking that baton. They are what Lexus used to be: affordable, comfy and stress-free.”
Lexus Languishes
The brand's share of the U.S. luxury market has been slippingSource: Edmunds
Note: Luxury market share figure for 2019 is through November
Toyota executives and dealers say the pause will be temporary ahead of a product blitz over the next two years. Noting that Lexus sales are “about flat” this year, Bob Carter, Toyota’s top sales executive in North America, told reporters earlier this month that a refreshed version of Lexus’ top-selling RX is on its way as a prelude to more vehicles headed for U.S. showrooms.
“A lot of new product is coming this way for Lexus down the road,” he said.
‘Missed’ Year
Lexus pioneered the luxury SUV when the RX debuted in 1998, but it hasn’t kept up with growth in the increasingly crowded segment. The mid-size GX and larger LX ride on antiquated chassis with dated interiors and infotainment displays. Both vehicles also have subpar fuel economy and limited cargo room compared with rival vehicles like the Audi Q7, BMW X7, Mercedes GLS and Volvo XC90.“We know 2019 was a year that we missed it,” Paul LaRochelle, general manager of a Lexus franchise in Annapolis, Maryland, and chair of the brand’s dealer council, said in an interview. “We will see Lexus making significant gains in the market over the next two, three, four, five years and beyond.”
Lexus’s plans include long-awaited updates to existing SUVs and at least one all-new mid-size SUV, he said. “The best way to put it would be a luxury seven- or eight-passenger people-mover.”
Jason Shelton, a 42-year old general manager at a telecom company, wants to upgrade his RX to a larger vehicle but says the outdated styling of Lexus SUVs is a turnoff. “Frankly, we’re hoping it is updated by the time the lease is up next year so we can get the bigger vehicle. Otherwise we will probably move to a different company,” the Nashville-area resident said.
Big-SUV Lust
By some measures, Lexus remains the brand to beat. Three of its vehicles rank among the top 10 most reliable models in an annual Consumer Reports survey (the Toyota brand has three more), and J.D. Power named it the top brand for resale value. Lexus sold its 10 millionth vehicle this year, a testament to its success over other Japanese luxury brands like Nissan Motor Co.’s Infiniti and Honda Motor Co.’s Acura, whose cumulative worldwide sales total 2.6 million and 5.4 million, respectively.Once mostly geared for the U.S., Lexus has increasingly become a global brand with rapid growth in China and Europe, where small crossovers dominate sales. Its most recent vehicle premieres took place in those two markets, including the UX compact crossover last year in Geneva and an electric-powered variant -- the brand’s first EV -- last month in Guangzhou. That has raised questions among some dealers and brand watchers about whether the U.S. now takes a back seat to other markets when it comes to investment priorities and vehicle development.
“It’s definitely been a slow time for the brand, and that’s what happens when you don’t have product to talk about,” said Kevin Watts, editor of the influential fan blog Lexus Enthusiast.
Lexus officials say the U.S. market has not been forgotten by executives in Toyota City. “Behind the curtain right now, what’s going on is that everything -- all the attention -- in Japan is to get Lexus back in the game with a tremendous lineup over the next few years,” said LaRochelle of the dealers’ council.
Those assurances from top Toyota officials came during an October meeting in Washington, where dealers said the vehicle highest on their wish list is an 18-foot long SUV akin to General Motors Co.’s GMC Yukon Denali XL. “That is one of our primary asks and one that they’re looking at,” LaRochelle said.
12-30-19, 02:10 PM
#2
Well that is basic knowledge that when you have the LX since 2008 and nothing else or new to offer in the large SUV segment, that consumers will turn elsewhere. Dated is an understatement!
Next few years? They should have something now to offer Lexus customers and hopefully not have to wait a few years or whatever the timetable is. We will see, but Lexus needs to up its game and fast.
Next few years? They should have something now to offer Lexus customers and hopefully not have to wait a few years or whatever the timetable is. We will see, but Lexus needs to up its game and fast.
12-30-19, 03:05 PM
#3
Lexus Fanatic
“Lexus has lost some of its luster,” said Jake Fisher, senior director of auto testing at Consumer Reports, who points to gains by rivals such as Hyundai Motors Co.’s Genesis brand. “Genesis is taking that baton. They are what Lexus used to be: affordable, comfy and stress-free.”
Last edited by mmarshall; 12-30-19 at 03:09 PM.
12-30-19, 03:22 PM
#4
Pole Position
Lexus is a textbook example how not to behave when you are on the top. Milking for every penny while not investing single penny back is a recipe for a skyfall. This guy is very optimistic cause in five years Lexus in US will be in even bigger pit as Audi matches it's sales or barely overtake them. Lexus is simply too slow to respond to market changes and unless they already have the plan set in stone to deploy by mid of the next decade be it BEV, PHEV, FCV it will be a game over for the next decade and only a hope they will learn and bounce back decade after next decade. It's obvious they missed out on the whole turbo thing and investing in it now would be beyond stupid as they would again miss out on the next trend. By 2025 that 2GR in ES would be over two decades old engine, simply astonishing.
12-30-19, 03:26 PM
#5
Lexus Fanatic
I don't agree that there's necessarily anything wrong with technology, hardware, or design that has been around for awhile, if it was good and sound technology to start with. For example, look at how long GM's 3.8L V6, Nissan's 3.5L V6, and Chrysler's old 3.7L Slant-Six lasted (successfully) before they were replaced....or needed be replaced.
12-30-19, 03:41 PM
#6
Lexus is a textbook example how not to behave when you are on the top. Milking for every penny while not investing single penny back is a recipe for a skyfall. This guy is very optimistic cause in five years Lexus in US will be in even bigger pit as Audi matches it's sales or barely overtake them. Lexus is simply too slow to respond to market changes and unless they already have the plan set in stone to deploy by mid of the next decade be it BEV, PHEV, FCV it will be a game over for the next decade and only a hope they will learn and bounce back decade after next decade. It's obvious they missed out on the whole turbo thing and investing in it now would be beyond stupid as they would again miss out on the next trend. By 2025 that 2GR in ES would be over two decades old engine, simply astonishing.
For me the old proven non-turbo engines are a plus. I value reliability very highly and these are some very reliable cars.
I think the styling looks a bit dated.
They look kind of boring.
12-30-19, 04:03 PM
#7
Lexus Test Driver
Originally Posted by mmarshall
I don't agree that there's necessarily anything wrong with technology, hardware, or design that has been around for awhile, if it was good and sound technology to start with. For example, look at how long GM's 3.8L V6, Nissan's 3.5L V6, and Chrysler's old 3.7L Slant-Six lasted (successfully) before they were replaced....or needed be replaced.
The brands that aren't willing to adapt and change are will be left behind in this changing environment. Good riddance.
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12-30-19, 05:43 PM
#8
Lexus Fanatic
There is such a thing as a necessary change, and then change simply for change's sake. Be careful not to confuse the two...many people do. And, since the thread-title primarily concerns Lexus, change has brought as many negative things to Lexus (if not more) than positive things. The loss of Lexus market share has been not only to unneeded change, but also, at least partly, to stronger competition, the introduction of Genesis products (which are built the classic way that Lexus products used to be) and to the vast improvement of the Lincoln brand, which has been truly astounding in the last several years.
12-30-19, 07:10 PM
#9
I don't agree that there's necessarily anything wrong with technology, hardware, or design that has been around for awhile, if it was good and sound technology to start with. For example, look at how long GM's 3.8L V6, Nissan's 3.5L V6, and Chrysler's old 3.7L Slant-Six lasted (successfully) before they were replaced....or needed be replaced.
12-30-19, 07:59 PM
#10
Lead Lap
my usual response to this "lexus falling behind" narrative has been, well there #1 where it counts...Best selling cross over and mid size/entry sedan, keeping those lights on. However I dont really no longer can stand behind it, after I believe the editor of C/D mentioned that Lexus has yet to turn a profit for the past decade.
I wonder what this turnaround pipeline looks like. The Toyota side is solid thus far, TGNA has outclassed the competition in competency, heck making some lexus models hard sells if one compared both.
I wonder what this turnaround pipeline looks like. The Toyota side is solid thus far, TGNA has outclassed the competition in competency, heck making some lexus models hard sells if one compared both.
12-30-19, 08:36 PM
#11
Lexus Fanatic
The gx and lx are ancient. What choice do I get if I want to stay with Lexus?
Last edited by mmarshall; 12-30-19 at 08:39 PM.
12-30-19, 10:22 PM
#12
Lexus Test Driver
There is a lot of BS with the article. For instance, the RX is not dated. It is styled strangely and wildly, but not styled "old," which is what the article implies. It is also not that old of a redesign either, and now coming in with a very fresh facelift. No one ever bothered to mentioned it's actual age, which is a irresponsible.
As far as the NX, that is a bigger problem. It's more of a very mild SUV, on the tail-end of it's life cycle. I believe within a year or half, we should see a fresh and competitive NX.
Last I checked, the UX was selling very well.
The rest is more or less true. The GS, GX, LX, and now IS are all long in the tooth and due for a re-do. The IS should come sooner than later, but I have a feeling they will stretch it out longer like they did with the 2IS. The GS, well, we've all but given up trying to figure out what Lexus is going to do with it. All of this has been a bad habit of Lexus since the beginning. The first SC stretched out forever and the LS has always taken very long to get updates. At least the plus side is better resale value. Perhaps Lexus makes up for slow new sales by gaining more $ for their pre-owned models. I don't think Genesis can make such claims.
The ES is a bright spot for the company, as it has always been. Again, no mention of it in the article or how it may be selling. I haven't researched numbers, but I see a ton of new ES's in my city. Even the current IS is still showing up a lot on the road. If Lexus wants to help with more sales, they need to improve their lease deals on all their sedans. A bit less down and a bit less per month would help get the ball rolling, like it did during the 2008 recession. BMW sure has no problem pushing their leases to gain sales numbers.
Overall, we see this same song and dance with Lexus and watchers alike. No new models for a year or two, and everyone starts complaining. Then one year comes by and three new models happen. For those who follow the auto industry, the answer is looking back at history and knowing this is just one of those lows that will automatically fix it self.
As far as the NX, that is a bigger problem. It's more of a very mild SUV, on the tail-end of it's life cycle. I believe within a year or half, we should see a fresh and competitive NX.
Last I checked, the UX was selling very well.
The rest is more or less true. The GS, GX, LX, and now IS are all long in the tooth and due for a re-do. The IS should come sooner than later, but I have a feeling they will stretch it out longer like they did with the 2IS. The GS, well, we've all but given up trying to figure out what Lexus is going to do with it. All of this has been a bad habit of Lexus since the beginning. The first SC stretched out forever and the LS has always taken very long to get updates. At least the plus side is better resale value. Perhaps Lexus makes up for slow new sales by gaining more $ for their pre-owned models. I don't think Genesis can make such claims.
The ES is a bright spot for the company, as it has always been. Again, no mention of it in the article or how it may be selling. I haven't researched numbers, but I see a ton of new ES's in my city. Even the current IS is still showing up a lot on the road. If Lexus wants to help with more sales, they need to improve their lease deals on all their sedans. A bit less down and a bit less per month would help get the ball rolling, like it did during the 2008 recession. BMW sure has no problem pushing their leases to gain sales numbers.
Overall, we see this same song and dance with Lexus and watchers alike. No new models for a year or two, and everyone starts complaining. Then one year comes by and three new models happen. For those who follow the auto industry, the answer is looking back at history and knowing this is just one of those lows that will automatically fix it self.
Last edited by Fizzboy7; 12-30-19 at 10:33 PM.
12-31-19, 03:58 AM
#13
Pole Position
The facts don't prove it. The RX is #1 in sales for luxury SUV. The NX is #6. Lexus is # 1 in SUV sales. Add Lexus is #1 in dependability, loyalty, satisfaction and depreciation an Lexus is doing just fine. Does the LX and GX need a makeover, yes.
Sales of units through November this year:
Lexus 189,398
BMW 153,587
Audi 119,628
Mercedes 105,164
Acura 102,996
Infiniti 75,662
Volvo 58,192
Land Rover 49,316
Porsche 38,511
Sales of units through November this year:
Lexus 189,398
BMW 153,587
Audi 119,628
Mercedes 105,164
Acura 102,996
Infiniti 75,662
Volvo 58,192
Land Rover 49,316
Porsche 38,511
Last edited by Freds430; 12-31-19 at 04:59 AM.
12-31-19, 05:07 AM
#15
Toyota/Lexus is in a tough position with their body-on-frame vehicles all of which have been allowed to languish too long but I think the problem is not as obvious as it seems. A decade plus later they sell reasonably well to a self-selected group of people who value their "old school" design and tech above all else. Head over to the Tundra forums and 90% of current Tundra owners claim they will not buy another Tundra if the new model has a turbo 6 and too much tech. They love their fuel-guzzling 5.7L V-8 and claim they will not accept too much change. I'm interested in the GX because it's old school and reliable and I'm getting frustrated by the tech...and I'm a techie. Will many of these people accept these new vehicles assuming they remain reliable and user friendly? Probably, but there is going to be a balance that needs to be struck here of offering enough "newness" with enough "old school" to keep both new buyers as well as current owners happy and purchasing new vehicles. IMO Toyota/Lexus has not implemented this "balance" very well in the past few years.
Last edited by PWMDMD; 12-31-19 at 05:12 AM.