Toyota Exec Says Big Changes in Store For Lexus Brand

Shortened Schedule

We've known for some time that Lexus has some major updates coming soon. A good portion of the luxury automaker's lineup is getting a bit long in the tooth, and despite strong sales, updating these vehicles will go a long way in positioning the brand as a global powerhouse in the coming years. Thus, it really was no surprise to hear Toyota Motor North America's new CEO, Ted Ogawa, admit that Lexus is working on a shortened schedule in a recent interview with Automotive News.

Photos: Lexus

Cadence Problems

"I have no worries about the Toyota lineup, but in the case of Lexus, the cadence is an issue," Ogawa admitted. "So for this year, the LC convertible is new. Profit-wise, it may be OK, but in this sense, the Lexus dealer body wants to see more product sooner." This essentially means that Lexus needs to kick its new vehicle development into high gear to play catch-up.

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Developing a Plan

Luckily, Ogawa has a plan to fix this little problem. "We need to change the cadence and the product and the powertrain," he said. "Cadence is a planning concept, so that's a No. 1 priority. And then product, next to the powertrain, right now is a second order." 

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Seeking Answers

Ogawa also admits that the brand's rivals often rely on aggressive discounting strategies to get ahead. "Yes, product and the cadence, and No. 2 is the cost competitiveness. Aggressive incentives from German brands, in particular, are impacting the market. So we need to change the luxury market, which has been tough for us. Customers rely on the quality of our products, but dealers have issues with cadence. I can improve product and cadence because those are in my hands. But I cannot control the market, so that's very difficult, and I don't have the right answer yet for that."

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Land Cruiser's Future

Ogawa also touches briefly on the future of the Land Cruiser, which is currently somewhat uncertain, though American dealers obviously want to keep it around. The problem is that the luxurious 'ute might be encroaching on Lexus' territory. "The Toyota dealers strongly want the nameplate of Land Cruiser, but we have not decided yet. We have some alternatives on how to retain the Land Cruiser nameplate."

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Getting Older

Ogawa also admits that the brand's demographics are changing, which means Lexus must take action on that front as well. "Yes, our [average] customer is becoming older, so we need to rejuvenate, to make products that are more appealing to the younger generation. That is something that I will have to think about. Of course, an attractive product at an affordable price, so in the background, costs must be massively competitive. So we need to think about that, both with our suppliers and with ourselves."

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Seismic Shift

This interview offers up some fascinating pieces of information, and it's also clear that Ogawa recognizes what Lexus must do to stay competitive in the future. Personally, we're looking forward to some fresh and exciting new products, hopefully with at least a few performance-oriented models popping up in the near future.

Photos: Lexus

>>Join the conversation about the changes to the brand right here in the Club Lexus Forum!

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