peteharvey

PS. Maybe Pres Akio should not say "no" more boring cars, but he should say "less" boring cars like 7ES?
Otherwise he really is contradicting himself by saying "No more boring cars".
It is certainly interesting how the exciting cars are costly to develop - yet sell in very small numbers.


7ES is car for the mass public.
4.0 V8 TT & 5GS are hypothetical examples of exciting products.
A hypothetical 5GS with premium part aluminium chassis, double wishbone front suspension, and longer wheelbase with the engine behind the front axle - is more expensive to produce, and more directed towards enthusiasts.
A hypothetical 4.0 V8 TT is also an engine for enthusiasts, while a 3.5 V6 TT is more than enough for the mass public, and the latter is cheaper to develop and would be purchased by many more people.
Though more expensive to develop, neither a hypothetical 5GS nor 4.0 V8 TT would sell in significant numbers unlike the new 7ES.


I've never said nor inferred that financial size is proportional to quality.
I always give an example of Canikon.
Canon is said to sell more cameras than Nikon and its competitors all added together.
Canon is also said to make more money than Nikon and all its competitors added together.
However, top photographers will always tell you that Canon is not better than Nikon, but both Canon & Nikon are equally good, though in different ways.

What is great for Jack, may not necessarily be great for Jill; just ask Jill herself.
It's horses for courses and each to their own.
The best is what best suits each individual's personal tastes, wants and needs.

Ditto Toyota Motor Corp's US$171 billion.
TMC is equally good, but in different ways...
.

Mr. Burns

Their business model requires selling more expensive cars are lower volumes to make money, and clearly it's not working out as well overall as Toyota's strategy of selling many cars at lower prices.

Though I remember reading Lexus makes up a good chunk of TMC's profits.

chromedome

There's a bit of confirmation bias going on with posters who see GSes everywhere. In 2016, the GS sold only 15k units worldwide whereas the 5-series sold over 30k units in the US and *330k* worldwide. Even the ES is everywhere in the US and China, hence why Lexus focused a lot of resources on the new model.

Just because some parts of the US have lots of GSes doesn't mean it's selling well, at least on the scale that Lexus needs to justify the development of a new model. That said, I'm surprised how BMW can keep turning out so many cookie-cutter variations on the same theme and even some oddities like the FWD 2-series Active Tourer.

Sulu

Yes, BMW's and Ferrari's business models have them selling premium vehicles at premium prices and they do better than Toyota.

Toyota is a full-range automaker, building the full range of mass-market consumer vehicles (from small, city vehicles right up full-size cars and trucks) and a limited range of premium vehicles.

BMW builds 2 premium brands (BMW and Rolls-Royce) and 1 less premium but not quite mass-market consumer brand (MINI).

Ferrari builds and sells premium vehicles.

Daimler builds a full range of premium vehicles but also builds an extensive range of commercial vehicles.

Toyota: $171 billion net wealth, divided by 10 million vehicles sold = $17,100 per vehicle
Daimler: $81 billion net wealth, divided by 2.5 million vehicles sold = $32,400 per vehicle
BMW: $61 billion net wealth, divided by 2.4 million vehicles sold = $25,400 per vehicle
Ferrari: $402 million net wealth, divided by 8000 vehicles sold = $50,250

Looking at these per vehicle wealth numbers, it is obvious that premium brands are more profitable than mass-market brands.

This was my point: You cannot compare Toyota's and Ferrari's net wealths without considering the markets they cater to and the size of the organizations (in terms of units sold).

EZZ

That is my point exactly. The GS market segment is probably larger than the ES market segment. Instead of doubling down and making a better product, Lexus folds. Basically Lexus is saying that the Germans won and they give up on the market and probably will always be a tier 2 luxury player. The ES is a tier 2 product and the product that Lexus will focus on. You can't win the Luxury market without a credible mid-size RWD sports sedan. I think Lexus is on the verge of hard times as they are facing the same issue as Caddy and Buick of long ago. The average age of a Lexus buyer is in the 60s and if they continue to make moves like this, the younger buyers will just go Audi / BMW / Mercedes as their next cars.

situman

I'm 30 something and I actually owned 2 Eses. Cant generalize who the target market is. Based on the styling alone, they arent trying to appeal to the 60yrs old folks.

EZZ

A vehicle as well established as the ES won't move the needle much in terms of who the next generation buyer is. The only thing about the ES that has changed is the looks. Everything else is status quo (FWD, entry luxo barge). Cars are fashion statements and most 30 and 40 year olds would be caught dead in an ES as its generally construed as a car for senior citizens. Check the average age of the 3 series / C class / Lexus IS models and you'll see significantly younger buyers. The average age of the ES buyer won't move an iota due to this model.

Albo

I'm 23 and bought my first car (es350-2015-craftedline). Now when I first told my friends that the old person stigma did come up. Until they see the car and realize the crafted line is a little sportier looking at least. Honestly the IS gets all the rave among my age group but it just is too small for me to invest in. The es will hopefully be reliable and carry on for a decade as I dont do more than 10k miles a year. The new gen es no longer has that old person look to it anymore but it will take a little while to remove the stigma from it. Part of taking away the GS I think will help remove the stigma. Your options are now IS(small) LS($$$) or ES(what most people will get). As for BMW and Mercedes all i keep hearing is that they are nice cars to lease or for the first 5 years until they start breaking down. Main reason I choose a Lexus is the reliability factor and being a Toyota brand.

arentz07

The old-person stigma is real. Honestly people who don't know cars don't expect the IS to be what it is if I just tell them it is a Lexus - add to that the ES's appearance and I could see how that would get old. I used to have a Buick which got a lot of the same comments. "How's the grandma car treatin' you?" or some such. I loved that thing at the time - my tastes have changed a bit but I can still see merit in those cars. It's about what you are going to do with it.

Which makes me think - will the new ES be too sporty for its previous target market? Based on my experience thus far, I'd guess not. If it has AVS, especially.

BippuLexus

+1 Lexus should have double downed and unloaded tons of resources onto making a better Lexus GS to fight the 5/E. If they work hard at it, they'll be able to top it at some point. This along with better marketing with the GS as well.

Majority of the young Lexus buyers are purchasing IS, RC, and GS. Younger buyers tend not to like the ES and the LC/LS are just expensive for young buyers.

I don't think he was generalizing. I think he was more or less speaking the average. Yes. There are young buyers that purchase the Lexus ES. However - majority of the buyers in the Lexus ES market is older folks.

I would argue the Facelifted 6G Lexus ES doesn't really have an "old person" car look to either. The "old person" car stigma goes beyond looks. This is why the new 2018 Camry XSE V6 still gets flank for being a Camry, no matter how aggressive it looks with its fake quad-exhaust.

Toyota/Lexus pretty will keep the formula the same with the Lexus ES because they know its their cash-cow. Its likely the 7G Lexus ES will drive the same as the 6G Lexus ES. The only difference is that the 7G looks more in line with the rest of the Lexus line-up (A little bit of Lexus LS outside/Lexus UX inside) The Lexus ES does look more aggressive than the previous 6G Lexus ES but every other Lexus looks more aggressive than their previous gen too. This "aggressive" look is just the standard Lexus design-language now and an aggressive design doesn't change what the car really is.
Just because the design is aggressive or "sporty" looking - doesn't mean the car is sporty. I don't think it'll affect the target audience at all because the Lexus ES will look aggressive but will be a comfortable boat like the 6G ES.

UDel

Cars are not fashion statements to most buyers, clearly, or else they would not be buying all these ugly CUV's. I doubt think it is that extreme that 30 or 40 year olds would not want to be caught dead in a ES but they likely prefer something sportier or at least what they/others consider sporty if they can afford it.

It is not just the ES that has the old persons stigma though, Mercedes, Rolls Royce, Jaguar, Bentley, Land Rover, Cadillac, Lincoln, Lexus LS, even Porsche, Ferrari, Masserati, classic muscle cars, new Corvettes/Vipers have cars old people buy and own stigma too. Why? Because mainly only older people can afford those cars. Many people who own lower end cars look at many of these cars with envy and hope one day they might be able to get one so the old person stigma is not so bad when the vehicle is desirable. When younger people run into a lot of money many will go out and buy one of those "old man" Mercedes, Porsche, Jaguars, or if they really hit it big a Ferrari or Bentley and they don't mind at all it is considered a old persons car in many circles.

Albo

Luxury cars are luxury. Face the facts. Its meant to be a statement about status to friends,neighbors and fellow drivers. They are not investments unless you buy a classic car. If you just want a car to take you from point a to b everyone would have a camry/accord/Malibu so on and so forth. So yes most people who buy luxury cars are older than let's say 40. Middle class families especially value the SUV and cuv because of the utility aspect. They are utility vehicles. They fit the family of 3+ and the dog comfortably. They fit the soccer practice stuff and the other things family's need on the go. That's why the SUV and cuv lineups will and are passing by the sedans. ALSO major thing most people talk about when getting an SUV or cuv for their family is SAFETY. People are inclined to believe the bigger the car and higher up from the ground it is, the safer it will be for their family. Even though many sedans get great safety ratings. It's very hard to change public perception when it comes to them spending tens of thousands of dollars

EZZ

Completely disagree. Cars are marketed on the basis of style. Any commercial with tell you that. If cars were all appliances, then we would have significantly less competition and vastly less style elements. Cars are emotional purchases for even cross over buyers or else they would go with the infinitely more usable but less attractive minivan. The sports cars do not have an old person stigma (well maybe the vette) as they are aspirational cars. The ES is not aspirational nor is it sporty. It is literally the very symbol and classic definition of the old person car. If the Porsches and Ferraris were the same cost as the ES, pretty positive the average age of those cars would plummet into the 30/40s.

BippuLexus

I respectfully disagree. Cars are fashion statements and a status symbol. This is why there is such thing as "luxury" cars. A good way to point this example out is: people still buy entry-level Lexus, Acura, Infiniti, BMW, Audi, and MB even when there are "basic economy" cars that offer the same amount of features. This begs the question: why buy something more expensive when you can get something for cheaper with the same features? It goes back to the brand, quality and image.
Many people would pay more for a luxury vehicle with the same features as an economy (A to B) vehicle because it shows status and makes themselves feel good.

I do not believe MB, RR, Jaguar, Bentley, Land Rover, Lexus LS, Porsche, Ferrari, and Maserati are considered as old people cars. I have never heard of people refer to these brands/cars to be "old people" brand/cars. They are more cars for the ultra-rich and usually ultra-rich people are not young. While majority of these cars are bought by people who are older, they aren't "old people" cars.

arentz07

I guess there are certain buyers who think of cars as fashion statements, but some would rather make fashion statements in other ways. For example, I have some coworkers who I know make a decent amount more money than me but choose to drive their beater Altimas and Civics into the ground and have no other vehicles. They'd rather spend their money vacationing, building PCs, buying video games, and fixing up their houses. Not saying you can't drive a Lexus and do all that stuff too - I know those people as well. But then, are they also saving money? It all comes down to priorities. I can say that the guys I know who don't have newer, fancier cars just seem like more laid-back guys in general and don't really have much fashion sense in general. But then again, I work in an environment where we are pretty much all nerds anyway.

Back to the ES, I suspect those types of guys wouldn't even consider an ES - they'd probably just buy a newer car in the same class again, unless they got a hobby or something - a lot of people I know have moved to trucks or CUVs. One coworker of mine went from a Camry to a new F-150, which was kind of a shocker, since he didn't really need a truck. Another got a Q5. Another got an Explorer so he could more easily haul the kids, specifically their child seats, around. What's funny is, he already had a VW Tiguan and a Saturn sedan, and replaced the old Saturn with the Explorer. Maybe he wanted two child-hauling-capable vehicles? There's just this image of practicality that comes with CUVs - honestly, the ES would probably be fine for him, in terms of child-friendliness, since it has a pretty large back seat - not to mention that he only has two kids! It's all perception, I am afraid.