Lexus brand isn't flying in Toyota's home market

Dan Roth — Sat, 22 Mar 2008 16:02:00 EST

In trying to establish a Japanese-market foothold for Lexus, Toyota has seemingly fallen prey to the same tactic that made the Cadillac Cimmaron such a maroon. When trying to launch a brand, especially an upscale brand, it's not advisable to rebadge existing models and crank up the price. It doesn't seem to matter how good the car is, or how swanky the new $10-million-a-pop showroom is, once an Altezza, always an Altezza, and paying 20 percent more for the same car with a different logo is rightfully galling.

Japanese luxury car buyers also have quite a taste for European iron, specifically German cars from the likes of Audi, BMW and Mercedes. Enthusiasts in Toyota's own backyard echo the universal car-guy complaint that Lexus vehicles lack personality. There's no denying that Lexus cars are well-made and capable, and the IS-F may finally infuse the brand with enough attitude to woo buyers of storied marques. Currently, most Lexus buyers in Japan are stepping up from Toyota ownership. Less than 5 percent of sales are conquests, and actual sales have lagged behind projections. Lexus offerings have been expanded from the initial IS, GS, and SC models to include the LS, and the RX will be coming in 2009. While it may appear less than successful so far, Toyota can afford to be patient. American buyers have fully embraced Toyota and Lexus nameplates to the point where they're both smashing successes. In another two to three years, we're betting Lexus will have a cheery song to sing in Japan.

[Source: Businessweek]

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