During my brief stint in British advertising, I had the distinct pleasure of working with one Paul Harvey Douglas. Paul was the world’s best headline writer. He could distill an entire advertising campaign down to a single sentence, a phrase, a word. I wonder what PHD would have made of Lexus' ad for its new F-Series automobiles. “What is F?” the two-page Autoweek center spread asks. “F is everything you thought we weren’t,” it answers. I could almost hear Paul’s derisive snort. “F means their brand’s in ‘effing trouble,” he would have pronounced. Too right, mate.
Let’s start by parsing the imagery. I have no idea what the smoke drifting through the heart of the “teaser” ad is supposed to mean. It’s not, as savvy enthusiasts might expect, tire smoke. It looks more like cigarette smoke. More specifically, advertising cigarette smoke. You know: the kind of photo-shopped psychedelic smouldering that’s been carefully crafted to hide nightmarish images that stimulate your subconscious desire to, uh, smoke.
After copious quantities of Clos De Bois, I can make out a dragon’s head, a couple of demonic faces and a Toucan-beaked hoodie-wearing beastie. And I feel a strange desire to fire-up a doobie. Anyway, the background above the horizontal plume is elegantly pin-striped, like a City gentleman’s business suit. The background below is jet black. As “F” is Lexus’ new performance sub-brand, the change is a subconscious signal that Lexus is about to offer both baby Bentleys and supersonic stealth bombers.
So here we have an ad that clearly signals Toyota’s intention to take the idea of Lexus as provider of floaty-drifty sarcophagi-on-wheels to America’s well-moneyed set and burn it in the same furnace the Vatican uses when the Cardinals get together to elevate one of their own to God’s CEO. Presumably, when you see the white [demon-filled] smoke rising heavenwards, you’ll know Lexus has been reborn, ready to kick some major league sports sedan ass.
Why? Why does Lexus need to build a sports or even a sporty car? I asked this question before, after attempting to cane the thoroughly unrewarding IS 350. I’ll ask it again. How many customers walk into a Lexus dealer thinking right, THIS is the place where I’ll finally find a car that’ll blow the doors off an M3 on the Nürburgring! That’s a bit like rocking-up to your local Volkswagen dealer looking for a $95k luxury sedan. Or heading over to a Porsche dealer for an SUV. Or journeying to a Chevy dealer for a $60k sports car.
Don’t get me wrong: those are all wonderful cars. And I know Mercedes’ in-house performance division sells more $100k+ automobiles than any other manufacturer in the world. But that doesn’t mean they should. In fact, the fact that they have may have had a little something to do with the fact that Lexus’ LS is kicking Mercedes S-Class in the ass (the score so far: 23.4k to 17.5k).
I also understand that you kinda expect a Lexus to offer at least modicum of body control and a soupcon of genuine forward thrust. But that’s because you’re a pistonhead. For the vast majority of Lexus buyers, it’s all about rock solid build quality, sumptuous materials, tomb-like silence, obsequious service, snob appeal and mindless wafting. IF the average Lexus customer thought about it, they’d probably think that the idea of a sporty Lexus is… confusing. And that’s because it is.
In fact, let’s say you weren’t a pistonhead and didn’t know that F is supposed to be the new M. If you read the AutoWeek ad headline literally– “F is everything you thought we weren’t”– you’d have to think a Lexus F is going to be cheap, nasty, loud, uncomfortable and unreliable. And that would make the new F Lexus’ evil twin. You don’t have to Google Garth Knight to know how THAT plot line turns out.
In short, the whole Lexus F thing is what branding experts would call The Mother of All Stupid Ideas. And there’s only one reason why a brand so strong my appliance installer called my new Kitchen Maid the “Lexus of dishwashers” would want to launch an anti-brand brand: boredom. I firmly believe that halo cars, sporting sub-brands and wacky brand digressions are simply a way for bored executives to avoid facing the long, tough, often dull slog that good branding– and product development– requires.
If Toyota wanted to build Porsche-killers, it should have created a new brand. Of course, Lexus’ decision to take its eye firmly off the ball is good news for its competition. Well, it would be if the other luxury automobile brands weren’t making the same mistakes: too many models at too many price points, too many genres, conflicting subdivisions, etc. At this point, Ferrari, Maserati and Bentley are the ones to watch. At the moment, they’re everything you think they are.
[Listen to branding guru Al Reis discuss Lexus' F below]
Speaking of poor Lexus marketing…
I was watching the US Open finals this weekend (sponsored by Lexus) and one of the prizes was a new Lexus IS-F (never heard of it before). The Vice President of Lexus made the presentation and described it as something new and something we wouldn’t expect from Lexus. Granted, if I haven’t heard of a car, then it hasn’t been in the public that much (between here and my casual reading of Jalopnik, I generally know what’s going on), but the way he presented it really made it look bad and unknown. What he should have done was talk about it like it’s all the rage and that everyone already is dreaming of having one in their garage now. Then the folks who don’t know what he’s talking about would just assume that everyone else does and that it’s an awesome car. My guess is that the current ad firm working for Lexus is dumb.
Oh no! Another “Brands can only have one facet” conversation! ;O)
I think Lexus making some Porsche killers sounds like a corking idea! Toyota are turning Lexus into a proper luxury division. Let’s face it it didn’t do Jaguar any harm with the X-type and the XK, BMW with the 3 series and the M series, Audi with their regular sedans and the R8 and Mercedes and their AMG engineered cars.
If anything, it’ll bring Lexus into line with their German counterparts, which is exactly where Toyota should take Lexus.
Personally, I think Porsches are so “done”. If I was in the market for a premium sports cars, Aston Martin is the one for me. Beautifully styled, understated brand and British! What more could you ask for…..?
Seems like there are two separate questions here.
1. Should Lexus have a performance division? Sure. It helps expand their brand in a new direction, and doesn’t necessarily conflict with the anaesthetized cruisers they sell now so much as complement them nicely.
2. Is this the right way for Lexus to market its new performance division? No F-ing way. Why denigrate all your current accomplishments and seem ready to kiss off the brand you’ve already built?
“What is F?”
Too close to WTF in my opinion.
Chris Gaines thinks that a sports car Lexus is a great idea.
Performance and luxury are two discrete things that well-heeled pistonheads have decided belong together. Nobody can really tell me a Porsche is a luxury car, they are kind of crappy inside and they are loud. They are performance cars.
Lexus is a luxury car brand. BMW straddles the two, but with a growing preference for suburban bloat and luxury over performance.
I agree that F-cars are retarded. I would love a performance minded Toyota, the IS should have been one, and the Supra should return. This new Ferrari killer should have just been the new 2000GT, a car that was beautiful and a perfect fit for Toyota which needs some exciting halo cars. Hell, the IS, if it was a bit cheaper, could have been a Scion just like, hopefully, the new AE86 will be.
There is no question that if I was being chauffeured around, I would pick an LS over an S-class, the massaging seats see to that.
Blame the growing appreciation of the sporting characteristics of Nissan’s performance division on Toyota’s need to “spice up” Lexus.
Toyota has been patiently chipping away at the Germans who had a few decades headstart of Lexus to build a reputation, but I don’t think they are willing to stand still and allow domestic competition from Infiniti to force them into fighting another upstart Japanese brand on an additional front.
I don’t think the “F” is as much a shot across the bow at AMG and M..as it is an attempt to smother Infiniti before it becomes an accepted player in circles generally reserved for the Germans and Lexus. It fought too hard to be the only Japanese mass luxury brand in the hunt…Infiniti is making gains. They want to be the new Mercedes, but they don’t want to inherit a new BMW in the process.
F is a horrible moniker for a sporting division, imo. F? Like “Hey I made a cool car but the reviewer gave it an F” F? Failure F? Booooooo. Also the logo is weak-sauce.
I think the introduction of luxo sport models is OK, similar to the M models for BMW, but from a pure branding perspective it would be better to maintain focus. Problem is, starting a brand is darn tough, and the cachet of the Lexus name was probably too tempting to pass up.
Lexus for me presently represents precise, quiet luxury; black cars with rich people inside of them. They’re going to lose that mindspace and become more muddled. However, in the short term they’ll probably make money off it, and that’s all that counts in the minds of the bigwigs. Not the best move if you take a 100-year perspective, as superbrands would…
The Garth Knight reference nearly killed me. You should really put up a picture of him in order to make your point.
I generally agree the branding sucks, but if the cars are good, who cares? There are a lot more confusing, stupid marketing campaigns, and I’m sure WIF? will be ditched once an expensive consultant tells Lexus it’s not increasing awareness. I think the S-classes issues vis-a-vis the LS are more to do with Lexus putting out a superior product than AMG brand devaluation. I mean, it can park itself! With only superficial damage!
Saab’s tagline “Born From Jets” is pretty untouchable in the forehead-slappingly ridiculous tagline category.
Sometimes we all need to come out of the “extreme” auto-enthusist box and see the world for what is really is!
RF, I love cars but sometimes I think you overstate the issue here. Porsche is Prosche and Ferrari is Ferrari but for the most part Audi, BMW, MB, etc are all just brands. If the Germans can successfully market sports oriented cars under their brand name why on earth would lexus not be able to do so?
The word on the street is so different from what you see here that it is important to remember that most folks do not care about all of the deep down details of their cars. Yes, even those lucky enough to own Porsches and Ferraris.
Lexus is currently considered a top dog player in the premium auto market. They do have the clot necessary to sell sportier models here in the USA. The name Lexus is synonymous with luxury and quality as well and excellent engineering and technology.
On top of this Lexus has built up one hell of a loyal customer base over the last 15 years. These folks have the means and they will traffic Lexus showrooms. Many of them will be more then happy to trust in Lexus and give them a shot (provided they get the sports car right).
BTW, There are quite a few people who are looking for the anti-Porsche today. All of us 30 to 40 somethings that managed to spend some time behind the wheel of any of the great Japanese sportscars of the 1990s 300zx TT, RX7 TT, Supra TT, MR2 Turbo, Miata, and NSX. We tend to see the current Porsche lineup as more show than go. We also know Toyota, Nissan, Honda, or Mazda could each give porsche a “run for the money” if they decided to go there. Come on how hard would it be to make a CaymanS killer and price it $25,000 less!
Link to the ad?
rjzinger :
It’s a print ad; I can’t find a link.
whatdoiknow1:
If the Germans can successfully market sports oriented cars under their brand name why on earth would lexus not be able to do so?
The Germans and Lexus can dilute their brands (and make money at it as well). But that doesn’t mean they should.
foobar:
expand their brand in a new direction
That’s like saying “take your bike on an ice rink.”
Right on! Toyota proved with Lexus that they could start a successful high-end brand from scratch. Why not just replay the same script and call the new cars something else entirely?
RF,
You point is well taken but are not high-end sportcars by definition luxury cars today? The days of the Porsche 944 (the affordable Porsche) are long over. We live in a time were a bare bones Elise will still set you back well over $50,000. With the exception of the Mustang, MX5, and 300z there is nothing remotely resembling a true sports car that does not scream luxury product!
GM is the company with the sportcar image problem, do to the fact that the Corvette (one of GM most expensive products) is stuck in low-end Chevy showrooms. This hurts the Corvette and adds to the precieved POS factor. The Corvette a $50,000 to $60,000 car should be sold in Cadillac dealerships. At that price it IS a luxury vehicle like it or not.
I think us car enthusist will be the last to admit (bite my tongue) that for the most part the concept of true sportcar is losing relevence in todays world. Come on, we live in a time when any number of sports sedans can pull 60 in 5.0, hold over .90g, and twist through the cones at over 60mph. What this means is that the need to jam our bodies into low slung cramped cars that we can’t see out of is fading. Cars like an M3 make any number of sports cars look like silly adolescent toys.
Honestly if Lexus existed in 1967 would not the 2000gt be sold as a Lexus back than? My point cars like the 300sl, XKE, M1, help maker MB, Jag, and BMW into the brands that they are today.
Toyota proved with Lexus that they could start a successful high-end brand from scratch. Why not just replay the same script and call the new cars something else entirely?
That would take another two decades. It’s easier and cheaper to leverage the existing brand than it would be to start over. Toyota’s branding did not have (and continues not to have) the brand equity needed to sell a luxury car, but Lexus does have the brand value needed to support a specialty badge.
That, and I see that this is akin to S- and RS-level Audis or M-class BMW’s. The likely goal here is to cultivate cachet value for the mainstream products by having a halo product or two hovering above them. Everyone does it, and I can’t see why Lexus would fail with an initiative that has historically benefited its competitors.
But the “F” moniker is a poor choice, perhaps the execs in Japan don’t realize that Americans are raised from early childhood to regard an “F” as a failing grade, not the mark of distinction that you’d like to bring home to Mom and Dad. Perhaps all of the really cool letters are taken, but come now, out of the 25 others in the alphabet, isn’t there a better one than this?
The Corvette a $50,000 to $60,000 car should be sold in Cadillac dealerships. At that price it IS a luxury vehicle like it or not.
*coughCadillacXLRcough*
When you have halo cars of that level, they’re really above the badge that’s on the hood. You’re not going to see a Corvette in the same way you’ll see a Cobalt. You’re not going to see a Viper in the same way you see a Neon.
Anyway, that’s all irrelevant to the “F” campaign. Lexus doesn’t need it, but if they’re going to go toe to toe with BMW M’s, Mercedes AMG’s, and even Cadillac V’s, they’ll have to toss their ‘F’ into the alphabet soup fray.
The performance division of these manufacturers, AMG for M-B, M for BMW, S for Audi, V for Cadillac build “halo” vehicles for the rest of the car line.
The Germans are at the point where they “performance tag” every model of their car line, and are reaching a point of overkill. It does get people to drool. Do a video of the performance version doing hot laps at the Nurburgring, and the lease program on the bread and butter version gained effectiveness.
Does Lexus need the F to sell cars, perhaps not, can Lexus enhance its brand / image with the F blasting around the Nurburgring, sure.
AGR :
Does Lexus need the F to sell cars, perhaps not, can Lexus enhance its brand / image with the F blasting around the Nurburgring, sure.
Hello? The whole point of this editorial is that F does NOT enhance the brand; it confuses the brand.
Can someone please explain how F HELPS Lexus? I mean, a coherent argument.
I think they realize that a lot of current or former Toyota owners want something sporty, or at least the dreams of it. The Supra was so many kids’ dream car and its name is still very strong. No one actually bought a new one though, so Lexus knows that no one has to buy its halo cars to get that halo effect.
More importantly, $35k sports sedans have overtaken $35k sports cars in importance, and a halo car to mess with Lexus’s brand identity will allow those to sell.
Robert Farago :
Can someone please explain how F HELPS Lexus? I mean, a coherent argument.
It goes something like this: High-strung alpha males buy performance sub-marque cars like AMG and M because of their personalities. Said high-strung alpha males (the marketing dweebs would call them “influencers”) are looked upon as aspirational behavior models by lower-status members of the pack (er, company). Thus the fact that the boss is driving an IS-F means that driving an ES or RX will increase your status in his eyes, and he can’t look down on your choice of car because to do so would be to dilute the status of his car slightly, which he would never do.
That’s the theory at any rate, and it probably helps to explain both the number of M cars I see in the parking lot at ye Fortune 100 Company headquarters and the vast sea of 325i/328is I see in the parking lot every morning. Of course where the theory falls down is that if your boss is one of these mobile coronary disease incubation units, he probably hates your guts anyway, so it really doesn’t matter what you drive.
If Lexus really wanted to follow through on this, their first F model would be an LS-F. BMW’s refusal to build an M7 (the Alpina B7 doesn’t count) leaves a gap open that an LS-F could fill quite nicely. The IS-F is entering a field which is extremely crowded with good models and offers nothing I can see over the S4 or even the 335i. Doing an LS-F would instead establish F as being the ultimate Lexus which competes in the rarified $100k+ range and offers both performance and luxury above an “ordinary” Lexus. Well, something other than F, at any rate.
carlisimo :
Show me ONE shred of reasonably scientific evidence that supports the theory that halo cars help sell less expensive models.
It’s a shibboleth. Something to do with the Beach Boys, I think.
Perhaps the F-line of cars won’t enhance the Lexus brand, but perhaps it’ll allow them to be competetive without having to compromise their vehicles as much. If they were to create a whole new brand, we’d accuse them of having too many makes (like GM). If they were to build performance cars, and not have the F-designation, they’d have an unclear image. So, they either have to overlook an important part of the market (fast still sells, and Lexus has long been weak on emotion), or do as they did, and create the performance lineup – obviously, these are still Lexi, with all the typical Lexus traits, they’re just fast now.
Ryan : Perhaps the F-line of cars won’t enhance the Lexus brand, but perhaps it’ll allow them to be competetive without having to compromise their vehicles as much. What's this about being more competitive? I wasn't aware that Lexus was hurting for business. As for compromising their vehicles, that's exactly what F is about to do. This goes back to some themes I've set before you wolves before. Namely that too much choice is a bad thing, not a good thing. And a brand should have a single coherent message. As for Brian E's suggestion that automotive alphas influence those beneath them (I want to be a man, man-cub), I used to be a believer. Now, I'm not. I think that whole trickle down theory is nothing more than motorized humanism: made by us for us to make us feel better about us. Does a Nissan Skyline make someone want to buy a Nissan Altima? Doubt it. And if it does, the buyer needs a baseball cap that says "statistical anomaly." As does anyone who thinks that any large chunk of 3-Series sales can be attributed to their M product. Or that the SLR makes a mess of Merc buyers want to buy a C350. And while those AMG, M, S, RS, V, SS, etc. models may sell well, the depreciation curve is… awesome. To me, that indicates a disconnect between the halo and bread-and-butter models.
RF: If you’re arguing that Lexus should not make a sporty Lexus even if doing so increases Lexus’s overall, long-term return on investment, you’ll have a tough row to hoe. If you’re saying that even if the sporty car by itself generates profits, it’s a bad idea because in the long run it will undermine overall Lexus ROI by diluting the brand, I could maybe see your point. Only time will tell. Such distinctions aside, though, I am not at all convinced that there’s no room at Lexus for a sporty car. What if the Lexus brand is simply the “pursuit of perfection” that they have trumpeted? High quality, reliable cars with (I hear) unbeatable customer service. Easy to squeeze a sports car in there somewhere!
The IS 250/350 issue is a fascinating one. I liked the first generation IS but have to acknowledge that it was not a good match as an entry level Lexus. Too sporty inside and out. I think Lexus made progress in the second generation in terms of attracting the upscale, fairly staid market. What could be more logical than finding another slot for a performance Lexus–that is, a slot other than the staid first-step-up-the-Lexus- ladder slot?
HawaiiJim :
What could be more logical than finding another slot for a performance Lexus–that is, a slot other than the staid first-step-up-the-Lexus- ladder slot?
Building a better LS. Again. And again. And again.
“Can someone please explain how F HELPS Lexus? I mean, a coherent argument.”
maybe. without knowing how many people out there are like me, and without knowing how much development and marketing money was spent on F, i can’t give you a good idea of ROI vs. lost sales from confused wafters.
i do believe that the car has a point and a purpose. i love to drive fast, and i love to drive the snot out of whatever i own at the time. i have no room in my life for service departments, and just about any auto repair psychologically strikes me as a ripoff regardless of its price. i would love to have a boxster, but i can’t stomach the oil changes. i’d love an M3, but after seeing the service costs of a friend’s bimmer, no thanks. we all make fun of camrys and corollas because of their soulless appliance nature, but…
somebody needs to make an appliance-reliable sportscar, and i would prefer that toyota do it.
make it fast, make it stick, make it fun, and make it so that i don’t have to think about it. i’ll change the oil, i’ll rotate the tires, and other than that, i want to be left alone to pound on it.
i do have a problem with the IS-F only being an auto (though an 8 speed auto sounds kinda cool), and i’m still waiting for a real sportscar (not just a hotted up sedan), but it’s a step in the right direction.
the oldsters and the snobs probably won’t even notice the F, so it may not harm the brand. people like me love fun but are so risk averse that many sportscars are out of the question. i also like to be invisible, and part of me thinks that NOBODY is going to notice the IS-F.
i don’t need a whole new brand, but a different letter would have been good. for some reason i just keep thinking “O-face”
now that i think about it more, they should have just called it the IS 500 and not said another word.
but they still should have built it.
so to answer your coherent argument question, RF: no.
Lexus are currently known as gussied up Toyotas. The last thing an exec dropping $75k on a car wants is for someone to ask if it’s a Camry with leather. Lexus management also know this, and know they’ll hit a price limit nobody will pay because of their more humble roots (Phaeton anybody ?). Hence they introduce a performance line; it may muddle the brand, but it’s better than the brand being muddled with Toyota.
Does a Nissan Skyline make someone want to buy a Nissan Altima? Doubt it.
One of Nissan’s greatest mistakes in the US market was getting rid of the Z cars, despite the fact that few people will ever buy one. Bringing them back in conjunction with a much-improved Altima helped to restore credibility to the brand image of Nissan as something more than just a dowdy transportation provider, and helped to save the company from ruin.
VW was on the verge of pulling out of the US market when it reintroduced the Beetle. The best thing about the Beetle is not how many copies it sold, but how it got people into VW showrooms who subsequently bought Jettas and Passats. They didn’t necessarily want or even like the Beetle, but it created a certain vivaciousness to the brand that made it interesting again.
If halo cars didn’t work, then I think that the successful automakers wouldn’t bother with them at all, yet they do. Performance builds credibility in the eye of the consumer, even if the consumer doesn’t need or want the performance for himself. The heritage makes the buyer more comfortable that a bit of it has rubbed off onto his lower echelon version of the product.
But forgetting the brand for a moment, these specialty models help with product positioning. There is an old marketing gimmick for consumer products that involves creating three product tiers. The idea is to use the highest and lowest tiers to support selling more units of the middle variant. Many consumers will view the middle choice as a sound compromise between the cheapo bottom version, which is too pedestrian and low rent for consideration, and the high-end version that may be nice but is too extravagant. But to have a middle, you need to have a top, which is where the halo comes into play.
Also, I would bet that the halo cars help within the company. Not only do the products become R&D mules that create improvements that eventually trickle down, but they also provide programs to which ambitious engineers can aspire. If automakers don’t have exciting places for employees to move on to, then they are more likely to leave the company entirely. Even if a hot-car specialty unit failed to sell a single unit, if it kept valuable employees on the payroll and created product advances that could benefit the breed, those benefits alone might be worth the cost.
I suspect ever increasing wealth concentration at the very top has something to do with this. Lexus knows full and well the customer segment whose purchasing power increases the fastest, are the ones who can already afford Ferraris, McLarens and Bugattis. Some of those guys, despite Maybach qualifying wealth, are Lexus drivers, and hence stop by Lexus dealerships on occasion. Having a nice looking, ‘faster than a Porsche’, high margin, 3rd, 4th, or 11th car to sell these guys is probably too lucrative to pass up.
Pch101 : Well, you’ve certainly done an excellent job presenting all the traditional arguments for halo cars. But I don’t believe a word of it. Altima sales were NOT helped by the Z, old or new. Accord or Altima Darling? Oh, let’s go for the Nissan. I like the Z. Does that sound remotely credible to anyone other than a pistonhead? Altima sales were helped by the new Altima. Period. And even if it DOES sound plausible, that doesn’t make it true. Where’s the evidence? Given the billions of dollars required to produce these marketinf department divas, you’d think someone, somewhere would study the correlation– real or imagined– between sales of the high-priced wheat and the lower-priced chaff. If someone knows of such data, clue me in. Otherwise, I’m from Missouri. If halo cars didn’t work, then I think that the successful automakers wouldn’t bother with them at all, yet they do. That sort of sophistry doesn’t cut it with me, Bub. In other words, Ford GT. Friggin’ awesome machine– that did sweet FA for Ford's fortunes. As we pointed out way back when the GT was THE bright shiny thing sparkling in the light, the Studebaker Avanti was another populist (if not popular) halo car that presaged the company's collapse. Performance builds credibility in the eye of the consumer, even if the consumer doesn’t need or want the performance for himself. I want a nice sensible snoozemobile. I’ll buy the one with the optional V10 even though I don’t want the V10 because it’s nice to know that someone else will enjoy its power. C’mon. We’re truth seekers here. Pay attention to that man behind the curtain. He’s trying to get you to bring him the witch’s broom. Or something like that. Not only do the products become R&D mules that create improvements that eventually trickle down, but they also provide programs to which ambitious engineers can aspire. If automakers don’t have exciting places for employees to move on to, then they are more likely to leave the company entirely. When a company starts building models to amuse internal "customers," it either has too much money or not enough brains. As Mr. Reis said, halo cars are both a waste of resources and creates perception problems for "lesser" models. What was top of the line becomes middling (e.g. the Maybach downgraded the value of the top S-Class). In that sense, these halo cars can actually be the devil's horns. Beep-beep.
stuki:
Nope.
A Ferrari driver doesn’t want a Lexus that drives like a Ferrari.
Sure, they may want a BMW that drives like a Ferrari, but I hardly think “they” constitute a large part of Lexus’ market. Or BMW’s, for that matter.
And anyway, that Lexus as Ferrari driver’s luxury car strategy would pit Lexus against BMW on BMW’s terms. How smart is that?
I think it is a fact that the automotive line is one of the most dynamic and theoretically perfect mediums to apply branding to – a cohesive design language, a few targeted offerings, consistent copy and a well-managed creative department could work together to create glorious, textbook examples of branding with which the consumers could identify mentally, viscerally, and emotionally.
I think it is also a fact that if any company wants to make serious money, they have to kowtow to the market, and branding decisions are tempered by financial and business decisions. The F line is a good example of this – it will unquestionably dilute the Lexus brand but will most likely generate sales and reward stockholders. That’s it. That’s the end game. Especially in publicly traded companies, the image of a brand will be constantly compromised by market demands.
Branding is an art and a science, but business is business. Very few companies are willing to sacrifice the low-hanging fruit of instant profits and increased market share in order to preserve the precious brand they should be protecting (i.e. the Cayenne and Panamera). I think it’s a shame and an outrage and sometimes almost irreparable to a businesses reputation (i.e. the Cimmaron) but that’s just how it is.
Also I would like to reiterate my utter disgust and bafflement with the “F” moniker… mind blowing. The letter doesn’t even convey any sense of speed and precision! V is sharp, S is speedy, M is manly and powerful, AMG is an abbreviation of a crazy name, and F is like a fat sloth and I hate it more the more I think about it.
I can understand the reason for the F-Series’ (due apologies to Ford there) existence. For starters, Toyota is spending what seems like billions in major racing series with absolutely no return on the marketing investment (does a Camry or Corolla buyer gravitate to ToMoCo because of their presence in F1? I’d bet at least half the farm on “no”). For another reason, Lexus is probably at the end of the line when it comes to expanding on their solid lineup of– what did you call them– sarcophogii, they seem to have the range covered unless they start treading in S-Class/Bentley/Rolls territory. Where do you go next?
Like full-size trucks, Toyota’s track record on the performance side of things is uneven but if Lexus, with its rep for bulletproof reliability and high-class call girl levels of customer service can poach some dissatisfied BMW and Porsche customers and hang on to them, then it is mission accomplished. I mean, that’s how they got to where they are today– stealing dissatisfied Mercedes and Cadillac customers.
As for the ad, “what is F?”. Sounds like a result of a banal creative brief and a convoluted “gotta do it all” brand plan. I mean, guys if you aren’t going to tell me what “F” is, then I can’t tell you.
Hmmm, alternative headlines.
Black Sheep
Silence is Golden. Screaming is Exhilerating.
Never give Engineers a Day Pass
I don’t know, I’m trying to build RV ads right now…(!) Maybe Lexus can do that next.
“If Toyota wanted to build Porsche-killers, it should have created a new brand.”
I couldn’t disagree more. If Lexus wants to build a performance two door coupe or roadster there is no reason to give it a whole new nameplate.
Your logic would imply that Mazda should have come up with a new nameplate to sell the Miata or that MG in it’s heyday should have had two different divisions, one making cheap and cheerful sports cars and the other build family sedans.
This is just silly.
If anything I would argue that Mercedes was foolish to pull the old Maybach name of out the hat for it’s over the top sedan. For heaven’s sake, we have too many automotive “brands” already. Different models of Lexus can quite readily be targeted at completely different customers. BMW and Mercedes already do so very well.
In many ways the Lexus brand’s customer perception has always been: “Great clones of high end German cars with better reliability, better service and a 25% discount.” Mercedes was clearly the first target. More recently a bit of BMW cloning has been going on at Lexus. Following this logic, a great Porsche fighter makes total sense.
Now I wouldn’t name it What The F, but that is a different conversation.
The Lexus F cars will still be a Lexus through and through. That means the Lexus F cars will STILL be refined, comfortable, high quality and luxurious but just at another level of performance compared to a regular Lexus.
Why didn’t Toyota make a new brand instead of a sub-brand? Very simple, it’s because the F cars will STILL have most of the attributes and characteristics that people associate with a Lexus.
If the F cars were COMPLETELY different from a regular Lexus (which they are not) then and only then would it make sense to have a new brand.
RF, you ask for any sort of proof that halo cars help sell lower end cars. Let me ask you this; do you have ANY proof that halo cars DON’T help to sell lesser models? Do you have any proof that halo cars DON’T help the overall image or reputation of a brand?
Do you think BMW would be the same today in terms of image and rep if they never came up with their M sub-brand?
You know, I think religion and politics have caused less arguments than “Can brands have more than one facet?”! Poor Mr Farago is on the verge of a nervous breakdown! ;O)
Putting aside the issue of the name of this performance moniker (whether it’s stupid or not), I reckon that Lexus can pull this off. It did the Germans no harm with their M series, AMG engineering and Quattro/S moniker. I don’t think it’ll dilute the brand as Lexus holds the “Higher bracket” echelon for all potential Toyota buyers (Much as Cadillac was to Chevrolet). If Toyota/Lexus created a new brand for their sports car division, then they’d be making the same mistake as a certain General who’s fallen on hard times. By the same logic, Toyota, should have created a new brand for their pick up trucks and another for their SUV’s.
All Lexus are trying to do, in my opinion, is bring themselves more into line with their German competitors.
All Lexus are trying to do, in my opinion, is bring themselves more into line with their German competitors.
Oh, I hope not. Back when my dad was working, one of his duties was to take his boss’s car (company car, really), a Mercedes S-Class, in for servicing. Dad used to tell me horror stories in getting the dealer to do just what the manual said was necessary, but even so it still cost a small fortune. When the boss retired, knowing the poor reliability of the Mercedes and the Toyota-like operating costs of the Lexus (aka cheap), guess what he bought for himself?
As for emulating AMG, why not? So what if it kills the brand, Toyota will persevere. (It’s their one most teeth-gnashing virtue. They should have ended their Formula One misadventure years ago; lesser companies would have.) Think about it, however: AMG-like performance with Toyota-like reliability and operating costs.
Even if they did an IS-F with 500 horsepower, however, I still don’t think it will be the BMW M / AMG-killer they desire. All current Toyota products suffer from a distinct passion deficit–and it will be the same engineers doing the, um, engineering. You can’t just will a car to be a Ferrari; the passion–the soul–has to be embedded in the company culture from Day One.
c/s Katie:
All Lexus are trying to do, in my opinion, is bring themselves more into line with their German competitors.
All the cool kids are doing it.
They’re just trying to meet the Germans..and IMO Infiniti on on equal ground. The have successes with the LS drawing in what would otherwise be S-Class/7-Series/A8 customers…why wouldn’t set your sights on AMG, M-Power and S line customers next? As is, well heeled Lexus customers have to swap brands when they want a toy..I’m sure Toyota is looking to remedy that.
My rear-guard against Infiniti theory is probably tinfoil lined armadillo helmet material to some, but I think it’s a factor as well. Toyota isn’t into rivalry IMO…Toyota is into winning.
It’s the only way to explain one brand dumping major ad dollars into a Prius and a Tundra with zero shame…every base covered under one roof. If there is money in any niche..there needs to be a Toyota to scratch that itch.
Toyota doesn’t want to be synonymous with “fast car”, “luxury car”, “hybrid car”,”sensible car” or anything of that sort…they want to be synonymous with “car” plain and simple. Like Google..to search..
To all the people who seem to be picking on me.
My point was how can Lexus expect to be thought of in the same vein as their German competitors, if their product range isn’t the same? For Lexus to snatch sales away from “das motherland”, they must emulate their strengths (whilst providing brilliant service and reliability. Something which the Germans are lacking). It is while the Germans are weak, Lexus must capitalise. Get disillusioned customers over to them and don’t let them go. I’ve said it before on TTAC, why do people buy German cars, when Japanese cars are more reliable, better quality and cheaper, pricewise?
Lexus need to shake off the image of “Lexus is for Toyota customers with a bit more money” to being thought of as an individual luxury brand, like BMW. By creating a range of products which bear no resemblance to Toyota’s range that is a step in the right direction. Who wouldn’t like a car as luxurious and reliable as a Lexus but with the power of an AMG? Maybe “F” (which is a daft name, I agree) could be a engineering option like AMG is to Mercedes-Benz? So if you want a IS car you pay extra to have it engineered by “F”?
“The Corvette a $50,000 to $60,000 car should be sold in Cadillac dealerships. At that price it IS a luxury vehicle like it or not.”
Caddy dealers should start selling Ag equipment as well then? Priced a big JD tractor lately? Price does not a luxury car make. As someone else pointed out, Porsche isn’t a luxury car, despite it’s high price.
To me Mercedes has no real market niche – is it a luxury car? Is it the well engineered car (no, it’s lost that aspect of it’s brand immage) is it a performance car? I don’t really know what it is. I guess it just depends on the model, and the options. There is no consistant brand immage.
Lexus should be careful about going down this road.
Dynamic88 :
Lexus should be careful about going down this road.
In fact, they shouldn’t go at all.
And to all those people who keep saying Lexus will be able to pull this off, and will gloat when F cars are a raging success, remember: the chief argument against this move is that it damages the brand LONG TERM.
Do you think BMW would be the same today in terms of image and rep if they never came up with their M sub-brand?
Good question. And when you answer it, try and do so from the average consumer’s POV, not an enthusiast’s.
Better still, contemplate that question when considering the Mercedes brand. It’s been clear to me for some time that AMG products are what ALL Mercedes products should be– in terms of build quality and price.
Only now ALL Mercs are getting the AMG treatment. Do we think that’s a good idea? If you can see the flaw in that logic, then you’re halfway to understanding why Lexus needs to stick to the knitting.
Here’s a video of the 2008 unveiling of the Lexus IS-F:
http://www.youtube.com/watch?v=0KecmtQ60Ic
My $0.02: Eight-speed, sport-shift transmission… jeez. Get a freakin’ clutch.
The exhausts are hideous.
I’m going to attending this year’s “Taste of Lexus” event. I’ll look forward to (perhaps) driving it. I sincerely doubt it’ll pull me away from BMW’s M3, or even the 335i, V8 or no.
First article on TTAC I’ve whole-heartedly disagreed with. IMO Lex-yota saw available space in the market for people who wanted greater performance closer to Ss and Ms without the headaches of actually owning them (read: service costs and reliability). I should know – I’m that customer. I bought an A4 with the express intent of building a daily-driver-friendly road course car and was fanatical about attending track events at Road Atlanta; went to Petit LeMans every year to cheer on the R8s; devoured every bit of technical data I could about upcoming Audis, etc. Alas, I grew tired of things breaking long before their time and ENORMOUS repair bills for the things I couldn’t fix myself…not to mention Audi/VW’s notoriously poor dealership service reputation. I debated for a long time about replacing the A4 with the new S4 or M3, but I’d long known that BMW owners experienced much of the same things.
I didn’t much care for the first IS when it came out…it looked cheap and was too slow, and the aftermarket tuning available for it was (at the time) very poor. Then Lexus came out with the IS350 and I knew I’d buy one. It was gorgeous compared to the last car, offered more interior room, and the engine is beyond fantastic. So it only offered a paddle shift 6-speed automatic…I was willing to cave on that item at the time. I was making more money so the $43K price tag didn’t phase me. And you know what? I KNEW I wouldn’t have to deal with the reliability woes and astronomical repair bills I would’ve had to contend with if I’d bought the S4 or M3. And to top things off, I was getting 306HP for around $10K – $15K LESS, with a brand that has a MUCH better resale value track record. Audi resale value is atrocious, and some aftermarket warranty companies won’t even cover the brand. And yes, the Lexus dealership experience is everything typical car dealers are not – an unpainful one. They treat me like royalty…Audi dealers treat its customers like Beetle and Jetta owners.
So now Lexus wants to remove its foot from the door and kick the thing down – I say have at it. So they want to create a 420HP IS-F and cater to buyers like me. GREAT! I for one am done with the Germans until they get their reliability and resale woes worked out, and stop charging customers for the priviledge of letting them bend us over the service counter for a $400 MAF sensor or $300 door latch ring. The one page I wish they would’ve taken from Audi re: IS-F is to make the car only a subtle visual progression from the IS-350 a la Audi A4 to S4. The IS-F looks cheapened with the front wheel arch vents and gaudy front bumper. And the exhaust design is ripe for aftermarket clean-up.
chris2 :
Thanks for sharing. But you are not Lexus’ target market. Nor should you be.
Why shouldn’t Lexus extend it market with a performance division? Mercedes is in a similar market to Lexus (i.e. luxo barges with very little sporting character) and they are doing just fine with AMG. Sure, a Lexus F will never be BMW M substitute but then again, nor is AMG (nor is the S series from Audi) and it hasn’t stopped them from making a tidy profit from it.
The F designation should not be seen as a sports car but (just like AMG) a Lexus with a bigger engine, some (well controlled) vroom vroom noises, slightly stiffer suspension, auto only transmission (with a couple too many gears), good straight line performance and all the comforts and safety that made the brand popular. If this sounds like a prescription for timid dentist with a mid-life crisis you may be right and so may Lexus – there is a market for it. You may not call it sport or performance but it is a logical move as most luxury brands have a “performance” division and seem to be getting good returns.
carguy: One more time (this time with italics): What's good for business is not necessarily good for a brand. At least not in the long term.
Hey, RF
How can you claim that Chris2 is NOT Lexus’ target market?” He just wrote a clear and concise response spelling out how he is part of the Lexus’ current target. If he is not who exactly do you think is?
Like it or not the Japanese auto makers hold a great deal more clot with my generation (30 to 40)than I feel you give credit. Look, the days of the Babyboomers will come to an end as it is now! The German cars are nice but the Japanese have been quite successful proving to many of us just how over-rated most of them are.
Maybe the Babyboomer generation is still stuck on the preceived greatness of these marks but for us most of the “regular” Audis, BMWs, and MBs are “so what” cars. They just cost more for no justifiable reason.
One of the reasons Lexus is so successful is becuase they design and build cars for the “real world”. 99.9% of German car owners in America will NEVER drive their expensive depreciating status toy on a race track. Therefore they could careless about a BMW being able to pull .91g while the Lexus counterpart can only hold on for .88g. So what if your BMW is a 1/10 of a second faster than my Lexus. At the beginning of the day and the end of the day it is still just a car that we drive back and forth to work.
I have watched over the last decade as Acura, Infiniti, Lexus has continuously pushed the German maker closer and closer to the edge. We are reaching the point were Audi, BMW, and MB are actually trying to sell more dream and fantasy than car today. “Our cars will outperform their cars on the track!” Give it a rest already, at this rate the next generation M3/M5 will need to become pure racecars to keep ahead of Lexus!
In the magazines the writers like to crticize Lexus for not having handling as sharp as a BMW. In the real world most drivers tend to like the fact that the Lexus has a smoother more forgiving ride. And yes, it is an appliance! Just like most homeowers will pass on those new chicy looking kitchen appliances if they are unreliable, people do feel the same way about cars. Passion is great until it leaves you stranded on the side of the road, or your headlight just stop working for no reason on your $60,000 passion-mobile.
BTW: If I am correct Lexus has managed to pre-sell every one of its $100,000+ LS600. Need I say more!
I agree with RF on this one. To me, Lexus is nothing more than tarted up, over-insulated Camry’s for the nouveau riche who can’t see past marketing gimmicks. The European brands have the heritage and reputation (Lexus racing?) to somewhat support their performance models. Lexus does not. Lexus appeals to the same people Toyota’s appeal to, but who want the snob factor and to drive a bed on wheels. They will be very confused by a Lexus that departs from this and ultimately be alienated.
Mr Farago,
I’m confused, what are you trying to say(?) ;O)
You do have a point about brand and business not necessarily working together (i.e keeping prices high to keep a brand’s exclusivity but that’ll result in low sales). But I think Lexus creating a performance system is a corking idea and a good business model.
When Toyota re-entered the United States, they studied Detroit’s cars and american buying habits in order to provide a product which Americans would buy. They did it recently with the Tundra. It’s a tried and tested method for Toyota to copy a competitor and make the model better.
Now Lexus, created refined luxury cars (like the Germans), they’ve created a good cachet of cars (like the Germans) and they styled them to look desirable (like the Germans). But in addition, Lexus took quality and reliability to a whole new level (unlike the Germans). Now what would be the next logical step? To create a performance division (like the Germans). If Lexus are to be the Japanese alternative to the German luxury cars, they must emulate them before they can improve on the Germans.
The next logical step after a performance division would be to create a halo car. Mercedes have the S-Class which people look to to see what technology will be standard on all cars in about 10 years time. Lexus will need a car like that.
(Sits back and watches Mr Farago’s blood hit boiling point!) ;O)
My 2 cents: RF is off the mark on this one. Like a few others above, I want all the comfort and refinement of a Lexus, none of the headaches that accompany every European make, and I want to go fast when I want to go fast. There are lots of people like me, and that is who is going to buy these cars. My next car will be the fastest Lexus I can buy, because my time is too valuable to be spent arguing with service departments, and I want to be coddled most of the time, and thrash about some of the time. I don’t care if there is an “F” in the name or not.
I’m with NICKNICK and chris2…
I bought a BMW for the driving dynamics but I can do without the trips to the dealership for sunroof replacement, A/C replacement, car DOA on 3 separate occasions, etc.
At the time I didnt care for the boy racer looks of the IS300 and thought the rest of the brand was “soft”.
I have had my eye on the new IS line and think the F line is exactly what Lexus needs to balance its image. I want a sports sedan that is bullet proof. And I think Lexus is the brand to do it.
26theone :
Sigh. I think what you guys REALLY want is better reliability and service from your BMW dealer.
Seriously. What if your BMW dealer was better than your Lexus dealer, and your Bimmer never broke. And just for kicks, let’s say model prices were the same.
NOW who would you buy?
Mr Farago,
That’s a lots of “ifs”! IF your BMW dealer was better, IF your BMW never broke and IF the prices were the same!
Surely, the real issue is that BMW AREN’T doing any of these things which is why customers like Mr 26theone and Mr NICKNICK are looking for an alternative, which is where Lexus should present themselves as the superior alternative. But in order to do that, Lexus need to be a viable alternative to the Germans otherwise it won’t be much of an incentive to move to Lexus.
Maybe this should be the subject of a new editorial?
“Where did it go wrong for the Germans?”
RF- Since we are in fairy tale land I will play along and say if BMWs were as reliable as a Lexus I wouldnt have any pause on getting another one. But if a Lexus can drive like a BMW why bother?
Also the BMW dealers arent really the problem. I can drop off my car and get a shiny new loaner to drive. Its the mfr not building as high as quality of car as Lexus.
Thanks for sharing. But you are not Lexus’ target market. Nor should you be.
Heaven forbid a company try to capitilize on jaded consumers of competitors’ products and offer an alternative while simultaneously bringing new customers into the fold that would’ve otherwise not given them a look…customers that might see the value of the overall brand and perhaps one day buy LSs when they reach that tax and age bracket.
Sigh. I think what you guys REALLY want is better reliability and service from your BMW dealer.
Seriously. What if your BMW dealer was better than your Lexus dealer, and your Bimmer never broke. And just for kicks, let’s say model prices were the same.
NOW who would you buy?
Ahh, hypotheticals. Now you’re changing the rules and presenting a case that (a) doesn’t exist and (b) doesn’t apply because if it weren’t for those current issues (which existed and made Lexus viable to consumers when they launched 20 years ago, and continue to exist today), Lexus wouldn’t be where they are now…a tier 1 brand. HOWEVER, to appease you I will grant that Audi/BMW would keep some customers who would’ve otherwise bolted in the current state of affairs. Even then it doesn’t mean a company shouldn’t throw their hat in the ring and offer a compelling alternative to grow their clientele. My business experience tells me when you have the capital and clout to expand, do it. Toyota has that right now.
Rock-solid reliability and outstanding customer service are integral parts of the Lexus brand. A brand is never, never just about the product but the benefits (tangible and otherwise) of the entire ownership experience.
I’m reminded of a recent ad for a credit card company (which shows you the quality of their branding)… An Asian American accountant confronts a craftsman working on some wood furniture. Have you seen THIS?” He holds a paper that contains some kind of report revealing expanding sales. “This means we’re going to have get more people and one of those [key card thingie motion] and more…” “Wood?” a snooty artisan says. “Wasn’t that the idea?” the head Zen tells the panicked bean counter. Obviously, the business in question is a low-volume high-margin deal. What are the chances that the boss can hire artisans quickly enough to cover the necessary expansion? Judging from the pace of the work, not good. And that means quality will suffer. And that means their rep will diminish. And that will hurt their business. Or perhaps they’ll introduce a cheaper range of mass market furniture to cater to the increased demand. And maybe it’ll sell well, since their hand-crafted stuff built them quite a rep. And then… their rep will suffer. And that will hurt their business. At the same time, if the biz expands, the boss on the floor will lose touch with his original passion and expertise, as he’s forced to do more management and less hands-on stuff. His employees’ satisfaction will then diminish– to the point where quality suffers. And that will hurt his business. The simple solution to this dilemma is… raise prices until the demand is back in line with production (or as in Ferrari’s case, slightly above). Done. More money for the same work. No hassle. The idea that expansion is a good thing per se is a dangerous concept that has killed– is killing– many a once-thriving car company. If the ultra-expensive LS hybrid is selling well, excellent! But to think that carving-out a sub-niche to expand a high end brand is the way to go is madness. Madness I tell you. Madness. For every example of a luxury company that has done so successfully, I can name you one that lived to regret it, from Pierre Cardin to Leica.
CSJohnston:
A brand is never, never just about the product but the benefits (tangible and otherwise) of the entire ownership experience.
Your point being? All those brand-related experiences are supposed to reinforce the brand. Which is… people’s expectations of the product and/or service.
Does anyone expect a Lexus to be a race car? HELL no. Does anyone want it to be one? Judging from the responses here, HELL yes. Should Lexus ignore this not-so-silent minority. Abso-damn-lutely.
I am simply going to make this point….
Why should Toyota allow the likes of Mercedes-AMG or BMW-M to have high performace luxury market to themselves?… it lends credibility to the rest of their respective line ups (halo effect) and infuses a sense of connectedness for the consumer with the world of motor-sports…
I know the typical Lexus consumer couldn’t give a rats ass about motorsports, but I am of the opinion that ‘f’ cars are not necessarily meant for the typical Lexus consumer…
Furthermore, it doesn’t matter that the ‘f’ moniker is silly (which i don’t think it is) or that the commercials are awkward (which they are), all that matters is that as people give the ‘f’ vehicles a chance they will realize MOST of the performance envelope they were seeking is well within reach of an ‘f’ vehicle + total and complete reliability.
I can honestly say, the IS-F is very high on my “most desired list or used cars I would happily purchase”… this is generally how I rate vehicles… Would I purchase an M3 with 50,000 miles on the odometer or a CLS55? I know the mfr’s aren’t necessarily targeting the used car market for their performance models, but this is in large part how you earn respect AND i don’t respect any technology that only performs within the safety of mfr warranty.
I will make this prophecy… 5 years from now, lets see how many IS-F’s are available on the used market and how many new M3’s are available… an IS-F likely won’t last 30 days on a dealer lot because it will be highly desirable because it will perform within 95% of an M3’s abilities, but you can drive it every day and never worry either… the ‘f’ division is exactly what Lexus was destined to do and I am happy they have started the process…
I also wouldn’t doubt Toyota has secretely already engineered a 8-9 speed dual clutch transmission to supplant those enthusiasts who will knock the ‘F’ cars for lacking a manual tranny…
Let’s see a Lexus Escalade – A Lexcalade
I know the commercial you’re referring to.
What are the chances that the boss can hire artisans quickly enough to cover the necessary expansion?
You’re an expert on the hand-made furniture industry now? How do you know they won’t be able to cope by hiring more workers? How from a 30 second commercial did you discern they don’t have processes in place to keep quality high? Something Lexus seems to have the knack of…fancy that. What I read from your line of reasoning is Lexus should’ve never ventured into the SUV market. Is the RX an abject failure of the brand’s proper direction?
At the same time, if the biz expands, the boss on the floor will lose touch with his original passion and expertise, as he’s forced to do more management and less hands-on stuff. His employees’ satisfaction will then diminish– to the point where quality suffers. And that will hurt his business.
The simple solution to this dilemma is… raise prices until the demand is back in line with production (or as in Ferrari’s case, slightly above). Done. More money for the same work. No hassle.
It’s funny how Toyota has done nothing but expand its reach over the last 20 years and eat GM’s lunch, yet this latest market share grab is somehow a horrendous idea.
Lexus struck a chord with buyers with the new IS. Go take a peek at your industry US sales data for the IS250/350 and compare it to the A4 over the same period. My guess is Lexus fared pretty damn well in the car’s first year out. I bought my 350 nearly a full year after it hit the showrooms and I had a REALLY hard time finding the one I wanted; many dealers’ 350s were still pre-sold before coming off the truck or lasted less than 5 days on the lot. So let’s review: the car was true to the brand in terms of value, reliability, and build quality…brought in new customers who never thought of looking at Lexus and were wowed by the experience, and sold and continue to sell well. You’re right, pure recipe for disaster, Mr. F! How dare they!
chris2:
You’re an expert on the hand-made furniture industry now?
Don’t be dissing the publisher. I know more than enough about artisans to make that call.
What I read from your line of reasoning is Lexus should’ve never ventured into the SUV market. Is the RX an abject failure of the brand’s proper direction?
I don’t know how you came to that conclusion. Lexus means luxury. Dynamically, I’m thinking loads of torque and… uh… that’s about it. A quiet engine? Easy steering? Anyway, I’ve got no problem with a luxury SUV. I’ll even spot you a luxury GT (which is what the SC is supposed to be). But a luxury high performance sports car? Porsche, schmorche; that’s a bridge too far.
It’s funny how Toyota has done nothing but expand its reach over the last 20 years and eat GM’s lunch, yet this latest market share grab is somehow a horrendous idea.
The operative word there is “Toyota.” Lexus is a luxury brand. Toyota is not.
I bought my 350 nearly a full year after it hit the showrooms and I had a REALLY hard time finding the one I wanted.
Ah, a fanboy. No matter. Just try to get your head around the idea that your personal predilection may not represent what’s best for Lexus. And– I know this is tough– that sales numbers are not always the ultimate arbiter of a brand’s success.
The operative word there is “Toyota.” Lexus is a luxury brand. Toyota is not.
By “Toyota” I meant Toyota and by extension, Lexus. I see no reason why Audi and BMW can tinker with Ss and Ms yet Lexus can’t dabble in it and see what shakes out. The three brands already fight for the same customers on other models. Again, Toyota has the capital to do it and they’ve determined it’s worth a shot.
I take offense at being labeled a fanboy for being particular about the options I wanted and having the patience wait for the right car when it was my hard-earned money paying for it.
And let the record show I no longer own a Lexus.
Seriously. What if your BMW dealer was better than your Lexus dealer, and your Bimmer never broke. And just for kicks, let’s say model prices were the same. And if my aunt was bald, Farago, she’d be my uncle. You keep asking for people to look at this issue, not from an enthusiasts’ point of view, but as the average consumer. Um, except the one looking at it most like an enthusiast… is you. Why? Because the average consumer in the market for an RX/LS/GS isn’t going to look at the F and get confused; he or she simply sees a car they aren’t interested in. Are we supposed to believe a Lexus customer is going to look at a sports car and go “WTF? I don’t understand this brand anymore!”? Why didn’t Lexus dilute their brand with the entry-level IS 250? Your specious logic would argue that LS and SC customers were upset and confused as well. “Brand dilution” is the sort of buzzword pundits like yourself cop to. “Brand dilution” isn’t discussed amongst “average consumers”. The performance enthusiast may not buy a Lexus sports car but I’m sure the car will sell to same people who buy Ferraris and Porsches and Lambos and DON’T drive them the way they’re meant, but for the status and looks (you didn’t think that even MOST Ferrari and Porsche drivers are motorheads, did you? Most BMW drivers aren’t, either) without the hospital bills. If Lexus can expand their vehicle line-up whilst consistently maintaining their reputation for luxury, quality and dependability, then more choice for the consumer = win. If, like its German counterparts, “expansion” meant a compromise in quality across their entire product line, then you can call it “brand dilution”. But at neither of these points do you cry, “pretend you’re an average consumer, please!” after stating an industry enthusiast/pundit’s premise—that’s just disingenuous. Enthusiasts gave a shit about Porsche selling an SUV; average consumers who could afford it, made it the best selling vehicle in their line.
The performance enthusiast may not buy a Lexus sports car but I’m sure the car will sell to same people who buy Ferraris and Porsches and Lambos and DON’T drive them the way they’re meant, but for the status and looks (you didn’t think that even MOST Ferrari and Porsche drivers are motorheads, did you? Most BMW drivers aren’t, either) without the hospital bills.
DIIIIIING. bchat gets the gold star today. Southern California is the reason slushbox transmissions are such a high percentage of 911 sales in this country….and I’d argue the reason a 911 turbo exists in drop top form.
chris2: I take offense at being labeled a fanboy for being particular about the options I wanted and having the patience wait for the right car when it was my hard-earned money paying for it. I apologize for the remark. It was not meant as an insult. I appreciate brand and model-related passion in all its forms. It's just that ownership can cloud one's vision (if not yours). Of course, it can also inform it. Anyway, remark withdrawn. Now, as for this gold star for realizing that SoCal Porsche and Ferrari owners buy into brand perception (rather than worrying about actual capability), I think you're both making MY point. Those cars/brands make an entirely coherent statement, in which their owners' bask. If Lexus goes off chasing those customers, no matter how successful they are, they'll lose what made them different and special in the first place. What made them NOT Porsche and Ferrari. A good brand does not go off and try to beat someone else at their game. It plays its own game better than anyone else.
Now, as for this gold star for realizing that SoCal Porsche and Ferrari owners buying into brand perception (rather than worrying about actual capability), I think you’re both making MY point. Those cars/brands make an entirely coherent statement, in which their owners’ bask. If Lexus goes off chasing those customers, no matter how successful they are, they’ll lose what made them different and special in the first place. What made them NOT Porsche and Ferrari.
But they aren’t really in danger of doing that in the first place, since no one’s going to confuse them with Porsche and Ferrari.
First of all I must say that the sort of brand-perception buying trend we’ve just discussed exists not only in SoCal—it exists everywhere Porsches and Ferraris are sold in this country. Americans like their slushboxes, period—they don’t care if it’s a Caddy or a 550.
Second, let’s not forget what made Lexus special–and it wasn’t by being different. It was by offering approximately the same product the Germans offered, but with better value and quality/reliability. Lexus’ unofficial motto could have very well been summed up as, “we’re the same but better.” They aren’t a car company with a particularly unique or edgy personality—they want to do what the next guy does, and beat him. That’s their game.
My point is that there are people who buy Porsches and Ferraris because they’re incredibly capable machines, and this Lexus isn’t for them. And Lexus isn’t kidding themselves by thinking so. But the 55 year old CEO who can do much better than a Vette for a mid-life crisis, wants a lot more class than a Viper, but wants a high end sports car that’s also a daily driver, would. And that’s what would make this Lexus special—like the others, it’ll be easy to live with.
I’m also looking at this car along the lines of the Acura NSX. And if I’m correct, I believe the price differential between the NSX and the next most expensive Acura was quite a bit larger than the one between what the F will cost, and the LS600h. So while I agree that from a performance/enthusiastic standpoint the car doesn’t make sense, looking at it as a well-heeled, average consumer, I think it does. Lexus might be pushing it, but I don’t think it’ll reach the point of brand dilution until it starts making a Corolla with leather, wood and nav.
RF, can you list some simple and convincing reasons as to WHY the F-sub brand will hurt the Lexus brand LONG TERM?
I stick to my previous point; if Toyota can manage to clearly differentiate and clearly define what an “F” car is compared to a regular Lexus, then there will be NO harm done *long term* to the Lexus brand. What you’re saying is akin to saying the performance Lexus hybrids will harm the brand because they do not fit as to what a “typical” Lexus is.
It’s quite obvious that not ALL Lexus models will get the F treatment. Only the more performance-oriented Lexus machines will get the F treatment. You will never see an ES-F or LX-F. You probably won’t see an LS-F either.
Going back to BMW and M, BMW is all about being the “ultimate driving machine”. It’s been BMW marketing for years and years now. What says “ultimate driving machine” in the BMW lineup more than an M car? The M models directly reinforce and help the marketing of the regular BMW models.
Since the very beginning, Lexus marketing has been about the “pursuit of perfection” in one variation or another. NOT the pursuit of luxury or the pursuit of comfort. The marketing of the F-brand will not clash with the image and brand marketing of the core Lexus brand, it will instead fit right into the “pursuit of perfection”.
And here is another reason why the F sub-brand won’t fail; it will offer something that has never really been offered before; high performance with high quality/high reliability and low maintenance.
AMG, M, Caddy V cars; they all have nagging quality/reliability/maintenance issues.
Your point being? All those brand-related experiences are supposed to reinforce the brand. Which is… people’s expectations of the product and/or service.
RF- My point was that people put different brand attributes in different orders. To a hard-core BMW or Porsche owner it may be that performance trumps all and things like quality/reliability or customer service might be relegated to unimportant. To others, those attributes may have more equal footing.
Let’s face it, there is a legion of consumers who buy a BMW or Porsche for “non-sporting” reasons. If the Lexus brand has a sufficient level of cachet to them and the product/service experience is better then they will become Lexus Loyalists too.
I think that was my point anyway.
Sorry RF, I still don’t understand why you’d think that the F series would damage the brand. Other luxo car companies including Audi, Mercedes have done the same without risking their brand image. I would argue quite the opposite, both Audi and Mercedes’s image probably benefited from their venture into muscle Euro cars.
What is it that you think would hurt Lexus’ image if they fitted a V8 to an IS sedan? What would you say the precedences are for your view that this would hurt their image? Would it confuse their middle class suburban clientele? This is not quite like Porsche building an SUV, it’s just slapping a bigger engine into an existing car and calling it sport.
Sorry RF, I still don’t understand why you’d think that the F series would damage the brand. Other luxo car companies including Audi, Mercedes have done the same without risking their brand image. I would argue quite the opposite, both Audi and Mercedes’s image probably benefited from their venture into muscle Euro cars.
To take things a bit further, it would only strengthen Lexus’ status in the industry if they can offer the F models and take the German Ms and Ss to task while maintaining their penchant for quality/reliability and fantasitic dealer experience. We’re not talking about a $200,000 supercar here…in the case of the IS-F at least, just an IS with a little mustard on it. Think of it this way, Robert…when the IS350 was announced, what cars were all the pundits, car mags, and gear heads instantly sizing it up against? It wasn’t the A4 and 330i, it was the S4 and M3. It wasn’t exactly a fair comparison since those cars offered greater balls-out performance (and a passionate following to boot)…so now Lexus takes it a step further and breathes a little fire on the IS to give those people something to chew on. In the end, I believe the likely result will be that customers will have an alternative in the sport/lux sedan market from a brand that everyone on Earth knows is renowned for doing what those other guys can’t or won’t get right – building a quality product that rarely needs the hood popped or being at an altitude of 4′ off the ground on a regular basis.
I don’t see this as being enough of a change to create dissonance or confusion about what the brand is. The Cimmaron and Phaeton are two examples that I can think of which caused confusion about a brand. But I’d also say that only the Cimmaron really did any damage to it’s brand. Even the NSX is an odd fit to me, not really at all like other Acuras, but I can’t see how it damaged the brand.
To me at least the F cars are a much better fit for what Lexus is/should be than the LX/GX are. Get rid of the body on frame SUVs and add a couple hot versions of the sedans and that would be perfect. Actually Cadillac should do this too. I think the Escalade as successful as it’s been is doing more damage to the Cadillacs brand than those sales are worth.
“Why didn’t Lexus dilute their brand with the entry-level IS 250? Your specious logic would argue that LS and SC customers were upset and confused as well.”
They did dilute it. And some LS/SC owners are upset because now even people like me can join the Lexus club ( if I wanted to – which I don’t) . LS/SC drivers don’t want to belong to a club that would have me as a member. I shouldn’t be able to choose a Lexus, I should be precluded by financial reality. I should only be able to drive an Avalon, (or maybe just a fully loaded Camry) and jumping up to a Lexus should cost more than I can afford. Where’s the snob appeal in driving the same brand a guy like me is driving?
“I stick to my previous point; if Toyota can manage to clearly differentiate and clearly define what an “F” car is compared to a regular Lexus, … ”
IOW, if they can make the F a separate brand – which they can and should do. But to make it a separate brand, it needs a separate brand name.
I’m not sure why so many people are oppossed to the idea of creating a separate brand. I would ask all of you this question – what’s the purpose of Scion? Why didn’t Toyota simply come out with a Toyota XA, Toyota XB, and so on?
If a separate brand for Lexus’ performance division is a bad idea, then Scion is probably a bad idea as well. An automaker should just trade under one name, with as many different models as they wish.
OTH, if Scion isn’t a bad idea, then Lexus coming up with another brand – for a different segment of the auto market- probably isn’t a bad idea either. The “F” brand could still be sold at Lexus dealers the way Scion is sold at Toyota dealers.
Keeping in mind that Lexus is a luxury/snob appeal car, which if any of the following should Lexus not build?
– Lexus Laris. A Yaris like small economy car with luxury appointments such as heated massaging leather seats.
– Lexus LT. A competitor to Lincoln’s Mark LT. Any reason Lexus shouldn’t build a luxury pickup? (Can you say platform sharing? I knew you could)
– Lexus XB. A luxury little boxy van like vehicle.
– Lexus GT40. You know where I’m going with this one.
– Lexusbuilt. A luxury competitor for truck drivers who want a bit more class.
-Lexourghini. A luxury/reliable 250 mph gull wing coupe.
They did dilute it. And some LS/SC owners are upset because now even people like me can join the Lexus club ( if I wanted to – which I don’t) . LS/SC drivers don’t want to belong to a club that would have me as a member. I shouldn’t be able to choose a Lexus, I should be precluded by financial reality. I should only be able to drive an Avalon, (or maybe just a fully loaded Camry) and jumping up to a Lexus should cost more than I can afford. Where’s the snob appeal in driving the same brand a guy like me is driving?
The snobbery of some LS and SC owners not enjoying an IS250 driver in the same club hardly makes a case for brand dilution, any more than S-Class drivers scoffing at the C-Class makes for the brand dilution of Benz. We’ve gone from looking at this from the perspective of an “enthusiast”, to the “average consumer”, to now the “douchebag” (not you, D88, but these aforementioned LS and SC owners).
Scion is a poor example of brand separation for this argument, since it was created to serve a demographic on the completely opposite end of the Lexus spectrum. Backing a new brand selling $15,000 cars is a very different ball game from one selling $150,000 cars. Purchasing attitudes are wildly dissimilar on both those ends, and establishing the latter over the former is a feat that took Lexus decades to accomplish.
You can’t find many examples of established luxury automakers creating a new, separate brand to sell even higher-end products because it isn’t a model that works (Maybach). When most people spend 100k or more on a car, “reputation” becomes more akin to “heritage”. They’re buying a car from a company with a history, and these car companies generally ride that ticket for all it’s worth.
RF,
You are starting to sound like your favorite people, Lutz and Wagoneer! Or better yet those former execs at MB in 1989 that said no Toyota product would ever be a threat Mercedes Benz.
What is the problem? Some of us actually have a passion for Japanese cars. You know they do do somethings better than the Germans. They also manage to create magic for 2/3 the price of the German competition.
Read the posts from your readers here and you will see that the German makers can easily find themselves in the same sinking ship as Detroit if they do not get their collective act together in terms of relaibilty and quality.
Passion is great, but with everything in life including cars if the passion is accompanied by a great deal of unwanted drama it quickly turns into pain!
There is nothing worst than something that stirs up your passions and emotions only to disappoint you in the end. A unreliable faulty expensive luxury or sportscar is just that a P in the A.
I sure there are many folks here who at the very least experienced this with the purchase of their first used car.
I have fallen in love with some beat-up cars that ran flawlessly and have had my heart broken by some beautiful cars that were absolute junk underneath the skin.
“If it dont work it aint no damn fun!”
That is why Toyota and Honda are so successful today.
You can’t find many examples of established luxury automakers creating a new, separate brand to sell even higher-end products because it isn’t a model that works (Maybach).
Bingo. It serves no purpose to create another brand for limited production performance-oriented cars, because people willing to plunk down the extra money to get those are left to contend with a brand that has no history at all and wondering what the ownership experience will be like. Plus, we’re talking about vehicles that are variations on existing models; a new brand would require far greater changes or even new platforms from the Lexus models to fully differentiate itself from the other brand’s cars (read: FAR more investment, to the tune of hundreds of millions of dollars to create the brand/dealerships and then vehicles themselves.) By comparison, the cost of what Toyota is doing with Lexus here is a mere pittance of going the route of a new brand. I believe they’re counting on Lexus’ (relatively short but highly successful) 20 year history of quality, reliability, and first-rate service to help sell the cars to people with the means and perhaps even the bad taste in their collective mouth of prior ownership of a BMW or Audi. That is certainly what drove me to look into the IS.
Audi is now bleeding a bit into their other brand (Lamborghini) with the R8, but it works from the standpoint of having a rich racing history and a full stable of performance models that are massaged versions of their basic family sedans (A4 -> S4/RS4, A6 -> S6/RS6, A8 -> S8) while being priced far less than a Gallardo.
“The snobbery of some LS and SC owners not enjoying an IS250 driver in the same club hardly makes a case for brand dilution, any more than S-Class drivers scoffing at the C-Class makes for the brand dilution of Benz. … ”
What is brand dilution then? When a brand which exists only for snob appeal (otherwise why not drive a Toyota?) fails to remain exclusive, then I call that brand dillution.
“Scion is a poor example of brand separation for this argument, since it was created to serve a demographic on the completely opposite end of the Lexus spectrum. … ”
I think the argument holds, because brands serve different pruposes, they exude different immages, emotions, “benefits”, at either end of the spectrum.
“You can’t find many examples of established luxury automakers creating a new, separate brand to sell even higher-end products because it isn’t a model that works (Maybach). When most people spend 100k or more on a car, “reputation” becomes more akin to “heritage”. They’re buying a car from a company with a history, and these car companies generally ride that ticket for all it’s worth.”
I think that’s a fair point, on the face of it. I’d say maybe Maybach is failing simply because the market for a car of that price is just this side of non-existant. A few Saudi princes will buy them, but who else?
BMW doesn’t need to make a separate mark for performance because it’s always been sold as the ultimate driving machine. But what if they wanted to get into the traditonal Caddy type of luxury market? – You know, billowy soft ride, Steering with as much road feel as a video game. Suppose there is a market for that and Bimmer wants to make more money. Don’t they really need a separate brand for that segment?
You’re right, manufacturers do ride their heritage to the bank, but over time their heritage fades because the brand ceases to have a consistant immage.
“Bingo. It serves no purpose to create another brand for limited production performance-oriented cars, because people willing to plunk down the extra money to get those are left to contend with a brand that has no history at all and wondering what the ownership experience will be like.”
If it was a brand created by Toyota, why would anyone have any qualms about trying it?
One more question-
Why did Toyota come up with the Lexus brand? Why not just offer luxury options on Toyota models?
I’d say maybe Maybach is failing simply because the market for a car of that price is just this side of non-existant. A few Saudi princes will buy them, but who else?
That’s a specious argument, because there is certainly a market for super-premium cars…one need only look at the success Bentley has been having the last few years particularly with the Continental GT. When I lived in Connecticut I could barely avoid tripping over one. It’s just a different type of market with a different kind of clientele with money 99% of people can’t comprehend. Maybach is failing to catch on because most people don’t know what the hell it is.
If it was a brand created by Toyota, why would anyone have any qualms about trying it?
Doesn’t matter…people who don’t eat sleep and breathe this stuff (i.e. most car buyers) don’t know if the same principles will be applied…are they built in the same factories or new ones that might suffer years of early quality issues…are the dealers going to be as good as Lexus… With an F-line, customers know right out of the gate what to expect…and they’ll either be extremely satisfied with the result or they won’t…but history tells them they’re almost guaranteed a good experience if the Lexus philosophy is upheld.
Plus it’s only one facet of my argument on this. The capital cost factor of starting a new brand from scratch in the auto industry is enormous.
D88,
To compete in the American market. The same with Infiniti and Acura. These L/I/A cars we buy in the States are sold as T/N/H models in their parent country and all over Asia.
To answer your other question, the same reason no one wanted to pay $90k for a Phaeton. Lexus has worked hard to prove its value and image as something more than “just another Toyota”. A brand new badge with no marquee history won’t have this kind of credibility.
And snobbery runs in all circles—there are Ferrari owners who piss on Lambos as being “just another Audi”. It doesn’t make a good case for brand dilution, since brand dilution is the over-exention or overuse of a brand or its image in an attempt to expand. Lexus has built the credibility and the customer base to make offering a high end F car as well as F models to justify its availability, whilst more closely matching the products that their competitors offer. A new brand can’t afford that ticket.
> That’s a specious argument, because there is certainly a market for super-premium cars…one need only look at the success Bentley has been having the last few years particularly with the Continental GT. When I lived in Connecticut I could barely avoid tripping over one. It’s just a different type of market with a different kind of clientele with money 99% of people can’t comprehend. Maybach is failing to catch on because most people don’t know what the hell it is.
You’re saying Maybach has a brand identity problem? People don’t understand what kind of car it’s suppossed to be? I’m sorry, but I don’t buy that.
If you’re saying they just havn’t got the name out there so not enough people have heard of it – well, I’m not sure about that either. I think people with that kind of money know about Maybach.
“Doesn’t matter…people who don’t eat sleep and breathe this stuff (i.e. most car buyers) don’t know if the same principles will be applied…are they built in the same factories or new ones that might suffer years of early quality issues…are the dealers going to be as good as Lexus… With an F-line, customers know right out of the gate what to expect…and they’ll either be extremely satisfied with the result or they won’t…but history tells them they’re almost guaranteed a good experience if the Lexus philosophy is upheld.”
Correct me if I’m wrong, but Lexus didn’t get off to a slow start, and people weren’t hesitant, wondering if Toyota would offer the same build quality and reliability they offered in their cheaper line. If “F” was a separate brand, still sold at Lexus dealers, then there’d be no reason to be sceptical about it. People wold know it’s a Lexus, just as they know a Lexus is a Toyota.
It comes down to this – how many things can a brand stand for, before it doesn’t stand for anything at all?
“Plus it’s only one facet of my argument on this. The capital cost factor of starting a new brand from scratch in the auto industry is enormous.”
Undeniably true, but it begs my previous question which was – Why did Toyota create the Lexus brand (with the attendant enormous captial costs) rather than just offer super luxury options on the larger Toyota models. I’d buy a Camry with butt massagers, and heated leather seats, and power ahstrays, or whatever it is that you can get on a Lexus that you can’t get on a Toyota.
Plus it’s only one facet of my argument on this. The capital cost factor of starting a new brand from scratch in the auto industry is enormous.
Yes! No one has raised that issue and it’s exactly the point of having built a credible brand and leveraging that instead of building a new badge that no one has heard of, and using that to sell a premium product. That would be brand dilution on Toyota’s part, as a matter of fact, and an ill financial strategy.
And while RF states in the article and in the comments section that a financial bottom-line isn’t necessarily good for a brand, the most profitable car manufacturers are building the better cars while sinking ships like GM and Chrysler continue to flood the market with garbage. Think there’s a correlation? I do.
Personally I don’t buy cars from companies in the kind of financial trouble some of these guys are in. Because while cost-cutting is a measure applied by ALL companies, I’d rather it didn’t happen to something important. That’s just me.
Correct me if I’m wrong, but Lexus didn’t get off to a slow start, and people weren’t hesitant, wondering if Toyota would offer the same build quality and reliability they offered in their cheaper line. If “F” was a separate brand, still sold at Lexus dealers, then there’d be no reason to be sceptical about it. People wold know it’s a Lexus, just as they know a Lexus is a Toyota.
Lexus took off by offering a premium product and undercutting the Germans by THOUSANDS and THOUSANDS. Today? Not so much. Many models are within spitting range of a BMW—Lexus is known for a lot of things these days, but not “value”.
So why would Toyota not leverage the Lexus brand and continue using it to sell premium products at Lexus-and-above prices? Making a new nameplate wouldn’t make fiscal sense. And if you’re going to sell it at a Lexus dealership anyway, why not just make it a Lexus? In the argument against “brand dilution” you’re suggesting just that—yet another premium brand, sold in Lexus dealerships, to further confuse brands, perceptions and customers.
“It comes down to this – how many things can a brand stand for, before it doesn’t stand for anything at all?”
Lexus has stood for “The Pursuit of Perfection”. An F car and an F line doesn’t dilute that at all. Why would it damage Lexus to offer an F-line of products when it doesn’t hurt Audi, BMW and MB to offer S, M, and AMG? A performance or steroid-enhanced product line is synonymous with mainstream luxury marquees these days.
An F-line would be exactly what Lexus needs for customers who are ‘tweeners—people who like the plush and luxury with a little more firmness and speed, without the AMG price and reliability. I think there’ll be a fair share of these on the streets.
… and you’d better believe Maybachs don’t sell because no one knows wtf they are. Sure, every one with several hundred thousand dollars to spend on a superluxury chauffeured vehicle “understands” what a Maybach is and who built them, but few care—they are not that respected and distinguished because they don’t have a HISTORY (they are also fugly). Rolls Royce has a history. Bentley has a history. That’s what the ultra-rich and chauffeur-driven buy.
Hey, I’m all about brand-image and focus and all that stuff but aren’t we missing something pretty simple here?
If Lexus can build legit pistonhead dream cars they’ll win over some of the M, S, AMG crowd. But if they execute the F cars as poorly as they did the new IS they’ve got no shot of gaining any sizable market share in that genre.
And even if their performance cars aren’t successful, Lexus has built up their brand image too far and for too long that the failure of a spin-off performance division will be only a tiny bump in the road for their brand image.
Lexus took off by offering a premium product and undercutting the Germans by THOUSANDS and THOUSANDS. Today? Not so much. Many models are within spitting range of a BMW—Lexus is known for a lot of things these days, but not “value”.
Correct – that’s what new brands do. They have to buy their way into the market by losing money on each item, often for years, until they’re accepted as a viable entity by consumers. Lexus did it, and legions of other brands have done it to gain acceptance, and THEN they focused on raising their prices in line with their competitors and actually turning a profit. It’s another very expensive part of starting a new brand. Audi had to do the same thing just to remain in existence in this country after the fallacious “unintended acceleration” witch hunt 60 Minutes ran that nearly drove them out of the US….they were literally on the brink of extinction and had to totally reinvent themselves in the eyes of US car buyers. They came out with the 90 and then the A4 and drastically undercut the market competitors, invested heavily in marketing and US-based racing series, and now their pricing is right in line with comparable BMW models. None of this was by accident. It was a long-term and costly endeavor that took YEARS.
So why would Toyota not leverage the Lexus brand and continue using it to sell premium products at Lexus-and-above prices? Making a new nameplate wouldn’t make fiscal sense. And if you’re going to sell it at a Lexus dealership anyway, why not just make it a Lexus? In the argument against “brand dilution” you’re suggesting just that—yet another premium brand, sold in Lexus dealerships, to further confuse brands, perceptions and customers.
Also correct. See GM. They could deep-six half their brands and still be overextended.
If Lexus can build legit pistonhead dream cars they’ll win over some of the M, S, AMG crowd. But if they execute the F cars as poorly as they did the new IS they’ve got no shot of gaining any sizable market share in that genre.
Compare new IS sales to A4 sales and explain to me how they poorly executed it. Because they left out a manual transmission on the 350 and you don’t like that? Or some other reason(?) I want a whole lot of things in life but I don’t always get them…I wanted the 6sp manual but was willing to compromise with the paddle shift and everything else it had, combined with the fact it was a commuter car that saw 30,000 miles in the 15 months I kept it. Lexus either didn’t have a manual transmission to run with mated to the 3.5L V6 or they rolled the dice and figured it would be a very low-volume demand and wasn’t worth the effort (which wouldn’t surprise me given 250s outnumber 350s by a huge margin…350s were something like 30% of all ISs made or maybe even less). For a long time they still weren’t meeting demand despite increasing production. No one can provide any credible argument as to how the new IS is somehow a failure. Sure there are things I’d hoped I could get on it, but I also got a lot of other features the competitors weren’t offering at higher prices.
The IS is far from “poorly executed” unless you’re discussing this from a purist’s standpoint. For most people, the IS is pretty sweet. I know a couple of former 3 series owners who’ve moved to the IS and are extremely happy. These aren’t pistonheads–these are people who wanted a luxury compact sedan without the headache of BMW, MB and Audi ownership.
“Yes! No one has raised that issue and it’s exactly the point of having built a credible brand and leveraging that instead of building a new badge that no one has heard of, and using that to sell a premium product. That would be brand dilution on Toyota’s part, as a matter of fact, and an ill financial strategy.”
Isn’t that exactly what Toyota did with Lexus?
“… and you’d better believe Maybachs don’t sell because no one knows wtf they are. Sure, every one with several hundred thousand dollars to spend on a superluxury chauffeured vehicle “understands” what a Maybach is and who built them, but few care—they are not that respected and distinguished because they don’t have a HISTORY (they are also fugly). Rolls Royce has a history. Bentley has a history. That’s what the ultra-rich and chauffeur-driven buy.”
Maybach has a proud history. MB resurected the name. True, today few know about the old Maybach company, but their website specifically goes over the history of the marque. What I don’t get is people saying Maybach doesn’t have a history and people don’t know what it is – It’s an upscale MB. MB has been around for more than a century. How could anyone who’s a potential buyer not know what it is? So, people won’t buy Maybach because it lacks history (which isn’t exactly true) but they’ll buy Lexus because in a scant 20 years Lexus now has build a reputation.
Of course it could be that people aren’t buying Maybach because of MB’s current reputation. But I suspect it has more to do with the fact that there are very few customers for a car of that price,
Perhaps the easiest way to approach this would be to use existing comparable automakers as case studies for creating these upper tiers.
-Has BMW been tainted by the M class? I’d say no — if anything, the allure of the M helps to sell the lesser cars.
-Has Mercedes been compromised by AMG? I’d say — refer to BMW.
-Has Audi been damaged by the S and RS classes? Once again, I’d say no, although I would add that I personally think it’s a bad idea to have both. If anyone at VAG is reading this, choose one or the other, and then build the prestige of that badge.
-Had Honda harmed itself with the R-type? Once again, I’d say no. If anything, it gives Honda the allure of being an affordable performance marque.
-Did Ford do any damage with the SVT vehicles? I’d say no. Ford has enough problems, and SVT isn’t one of them.
I’m just not seeing any examples of how these special designations harm their parent brands.
In any case, these class-types are really not matters of brand, so much as they are of product positioning. Again, the main benefit of a vehicle such as an M3 is that it helps to create prestige for the lowlier 3-series cars slotted beneath it. You may not be able to get an M, but the existence of the M makes the 328 seem a bit more interesting.
So I’m not just not seeing the problem. If anything, I would think that it would be a problem if they didn’t do it (although I’d ditch the choice of “F” as the designation.)
Lexus has done quite well for itself, but it lacks that last bit of Teutonic-style cachet in part because there is no creme de la creme top tier to which to admire or aspire. Combine a hot variant of an existing car or two (IS and GS, for example) with some European suspension tuning and a tricked out motor, and I can’t see why they wouldn’t own the market, along with earning some more conquest sales from the German 3.
Isn’t that exactly what Toyota did with Lexus? Lexus as a brand was designed to compete mass market and be a sustainable entity. F-badged cars will be far lower volume extensions of existing models and would not be a profitable entity on their own under a new brand. Maybach has a proud history. MB resurected the name. True, today few know about the old Maybach company, but their website specifically goes over the history of the marque. LOL “their website”…are you actually serious? The brand has been out of use since the 40s and you expect people, most of which weren’t even born back then, to know what Maybach was all about over 60 years ago to a point where they can identify with it and drop $370-large on a car? Wow. How could anyone who’s a potential buyer not know what it is? See first comment So, people won’t buy Maybach because it lacks history (which isn’t exactly true) but they’ll buy Lexus because in a scant 20 years Lexus now has build a reputation. None of us said it lacks history, we said they don’t know what it is, and they DON’T. And it doesn’t have a RECENT or CONTINUOUS history, whereas people buying cars today know what Lexus is because they’ve been around to see it progress from nothing into a Tier 1 brand…the fact that they’ve done this within 20 years should be a clue that the public identifies with and wants what they have to sell. Their meteoric rise in the auto industry in such a short period is almost unheard of. But I suspect it has more to do with the fact that there are very few customers for a car of that price, Wrong, wrong, wrong. MB never intended Maybach to be a volume car, and I ask you to go back and read my comments re: Bentley. There are plenty of very high rollers, enough to keep the likes of a Maybach line viable. THEY JUST AREN’T BUYING IT. They’re flooding Bentley with orders, Rolls Royce, and so on.
I have edited Chris2's recent comment, as it was insulting to one of his fellow commentators. If he repeats this injury or commits another, he will not be allowed to post here. Ever. Again, this site has a zero tolerance policy regarding flaming. Violators are warned, and then permanently banned from posting. I have banned nearly a hundred people from posting here. I have no compunction about banning a hundred more. Whatever it takes. We will have civilized debate on TTAC or we will have none at all.
It’s amazing how short-sighted the analysis can be at times. Perhaps if the future is difficult to see, we should look at the past:
How good has the downmarket move worked out for vaunted Luxury brands like Cadillac, Lincoln and Chrysler?(yes, Chrysler was Chrysler Group’s lux division once upon a time)
The cheap Caddies moved the metal, increased ROI and all that. They did all the things that the M division and the S division are doing for BMW and Audi. Then what? People who bought Cadillacs started buying Mercs. Remember, the M division at BMW was originally a hardcore motorsport division, not a marketing tool.
Lincoln is by far the saddest story of all. Would anyone here buy a Lincoln without a deep discount anymore? I was born in 1980, but perhaps I’m the only one here who “remembers” a time when a “Continental” meant Lincoln, not Bentley, and the word would actually make men erect.
You think rich ladies still buy Louis Vuitton bags? Not anymore.
Despite all the comments, sometimes I read through and I really feel like we’ve only scratched the surface of the branding discussion.
How good has the downmarket move worked out for vaunted Luxury brands like Cadillac, Lincoln and Chrysler?(yes, Chrysler was Chrysler Group’s lux division once upon a time)
I would not confuse a move downmarket with a move upmarket.
Lexus is already a luxury brand. Its special sauce that it offers against its rivals is that is an impeccably reliable product among a field that usually involves some ownership compromises (a few more costly breakdowns) for those who wish to play. If Lexus is to maintain its brand equity, every product it sells need to honor these core values.
Lexus’ deficiency is that it lacks the pedigree of a luxury brand, which in the car business usually includes have some special uber-badge that distinguishes the very best of the breed from the more normal offerings. While consumers don’t question its reliability, they do perceive it as lacking that certain je ne sais quoi. I would argue that there two ingredients that it is lacking: (a) killer suspension tuning and (b) the cachet that comes from having a few top-tier supervariants of its products that are less accessible to its typical buyers.
If Lexus was to launch a $20k sedan or a $15k hatchback, I would be quick to point out that this would be a serious branding mistake. It must maintain “luxury”-level pricing
But for it to move upward is very much the course of every luxury maker that is turning a profit. Either the halo theory works, or else everyone in this business must be stoopid, because the winners are all doing it.
While branding messages should be easily conveyed and simple to summarize, it does not go to follow that the product lines they support must be narrow. The consumer has accepted the concept of diversified luxury brands, and takes no issue with such brands offering pure sports cars, sedans, coupes, roadsters, and even SUV’s and wagons, just so long as they are in line with the parent brand’s message.
As a luxury automaker, Lexus can well afford to create a performance marque within its stable. I would go further, and say that not doing it would be a serious mistake. Every automaker worth its salt that wants to succeed in this zone needs such a badge to sell its story as a serious player. The production should be limited, price points kept high, and the products should compliment the rest of the lineup, but if they conform to those requirements, then it makes perfect sense. Just don’t call it an “F”, that’s all.
See that? We’re in the midst of a “deep debate”, guys. Well done.
In the context of my previous post I only meant the IS was a failure in the sense that it did not appeal to the hardcore pistonhead/enthusiast crowd looking for a sport sedan. As we all remember, it was intended as the Lexus that would trump the other sport sedans (namely, the 3-series) in driving dynamics. And although the IS is better than it’s competitors in several regards, it’s appeal purely from a driving dynamic standpoint puts it near the bottom of the pack.
Of course, it would be ridiculous to state that the IS was a failure in regards to sales. It sells just like any other Lexus: extremely well.
I have no personal objection to the Lexus IS. The lack of a manual transmission did not bother me as the automatic seemed quite capable of optimizing the engine’s power. And although it’s driving dynamics are inferior I found that it was a credible alternative to the 3 series using a tried and true Lexus formula: better reliability, better build, and better value. Personally, I’m too much of a pragmatic and not enough of a pistonhead to declare the 3series a clearly better choice than the IS. (I’ve been jaded by the BMW maintenance, reliability experience as some others here). But I can clearly imagine why truer pistonheads will.
My point was that the F-cars will not likely be as successful (this time, I am talking about sales) if they don’t up the driving dynamics to at least comparable to the S, M, and AMG cars offered by the Europeans as reliability and even value plays less of a role in this market segment than they do in the IS’ segment.
100th post! Woo hoo!
Like I said earlier, I think Religion and Politics have caused less wars than this topic!
I still disgaree with Mr Farago. Brands can have more than one facet PROVIDED THEY’RE MANAGED CORRECTLY. Look at Wal-mart, they started off just selling groceries, then they branched out into other areas and today they’re this corporate juggernaut like Toyota, whereas K-Mart tried the same thing and became a bit of a non-entity because they didn’t work it properly (at least, not as well as Wal_mart) like GM.
By Mr Farago’s logic, Wal-Mart should have started a new brand for the toys market, one for books, one for electronical goods, etc. Instead, Wal-Mart became “everything under one roof”. That methodology is working since everyone is adapting to that format. In the UK, Wal-Mart took over ASDA (UK supermarket chain). Now before Wal-Mart came on the scene, ASDA just sold groceries. Now, they sell, toys, clothes, electronical goods, etc and they’re doing well.
Now transfer this to Lexus. Lexus have made a damn good job building and selling luxury cars. Their cars are now thought of in the same vein as the Germans. Lexus found those German buyers who were disillusioned with the Germans’ poor reliability and service and gave them something better. Now, where do they take the brand? What other market demographic can else can they steal from the Germans? The performance division. Now that Lexus have established themselves can builders of reliable cars, now add “fast” to the mix, too. That demographic who bought Germans’ cars because of the sporty division now have a 4th option. A 4th option which doesn’t have poor reliability and poor services. If Lexus created a new brand, they have to go back to square one with establishing a good customer relationship, good reliability and good service. Whereas, expanding the brand LOGICALLY*, doesn’t have those stumbling blocks and organic growth is harder work, but reaps better rewards (GM, take note) I don’t want to bet against Lexus, because I’m sure Lexus have done their market research and know this is a market worth going for.
I bet the Germans are panicking, right now!
* = As opposed to expanding the brand illogically, like building a small city car or a motorbike division.
“LOL “their website”…are you actually serious? The brand has been out of use since the 40s and you expect people, most of which weren’t even born back then, to know what Maybach was all about over 60 years ago to a point where they can identify with it and drop $370-large on a car? Wow.”
Yes I do. I expect people who are going to drop $370K on a car to look at the website. I also assume MB resurected the name in order to draw on the history of the make, instead of just making up a name.
Maybach is built by Mercedes. I think everyone who could actually buy one knows that. Why would they have any hestiance about buying from MB? (well, except that MB has fallen down a bit on quality) You seem to be trying to make a case that Maybach is something new and uproven, therefore people are shying away. Respectfully, I don’t think that’s the case. It’s a MB and everyone knows it. Maybe the average Malibu buyer doesn’t know it, but anyone who’s a potential buyer does.
“Wrong, wrong, wrong. MB never intended Maybach to be a volume car, and I ask you to go back and read my comments re: Bentley. There are plenty of very high rollers, enough to keep the likes of a Maybach line viable. THEY JUST AREN’T BUYING IT. They’re flooding Bentley with orders, Rolls Royce, and so on.”
I can always admit I’m wrong, if you convince me. I may be. The rareified world of high end cars is well beyond my budget so I don’t pay close attention. But I’d note that Bently makes cars that sell for well under 200K, which is quite a step down from 370K. I suspect a lot of people who buy a Bently simply can’t pony up for a Maybach. We all have budgets – even those who’s budgets are very large.
I’m having a very hard time convincing anyone hereabouts of a very simple “immutable law” of branding (I highly suggest you listen to the podcast accompanying this post): the tighter the brand the more powerful it is.
Rolex makes watches. If they made wallets, they’d sell a bunch. Or pens. Or cuff links. But they don’t. They make watches. In fact, they’ve made one kind of watch for a VERY long time. So when you said Rolex, a LOT of people (collectors and not) knew exactly what you meant.
When Rolex expanded ever-so-slightly into their Cellini dress watch collection, the new pieces sold very well. But it wasn’t what customers considered a Rolex. It weakened the brand, and now accounts for a small percentage of Rolex sales. Enough to justify weakening the brand? I think not.
Now Ms. Puckrick seeks to characterize this argument as a strait jacket that stifles a brand. Again, it’s exactly the opposite.
As for Wal-Mart, the brand isn’t about groceries, or electronics, or toys. They were selling PRICE. In that regard, the Wal-Mart brand is inherently flexible. They can take on supermarkets, DIY stores, Toys-R-Us and a bunch more.
By the same token, the Toyota brand is flexible. They sell reliable automobiles. They can sell SUVs, minivans, sedans and yes, sports cars– as long as they are first and foremost reliable. We can debate about price points, but the brand can stretch up and down the spectrum.
Toyota formed Lexus because they wanted to sell something other than price: luxury. We can discuss the definition of a luxury automobile, but I think we can agree that reliability is a sub-set. And I hope we can all agree that sporting performance is DEFINITELY a sub-set of luxury.
[It may seem a fine point to some of you, but the vast majority of S-Class or LS customers couldn’t tell you the “advantages” of a Nurburgring-fettled car. And wouldn’t like them.]
Lexus is stronger than Mercedes because it doesn’t build AMG-style cars. There is no confusion in the customer’s mind about what a Lexus is. Every time Mercedes promotes a 6.3-liter monster, journos and pistonheads lap it up. But it confuses brand perception amongst the majority of Mercedes buyers. Sport AND luxury? Isn’t that BMW?
Later today, I’ll post William C. Montgomery’s rebuttal to this piece. Meanwhile, a simple question: if you ask the average Lexus owner or aspiring Lexus owner to list what he expects from the brand, where would “sporting performance” sit on the list?
Lexus is stronger than Mercedes because it doesn’t build AMG-style cars. There is no confusion in the customer’s mind about what a Lexus is.
Of the two, I’d say that Mercedes has, by far, the better brand. Mercedes clearly has more cachet value than does Lexus, an important virtue for a luxury product. If one is going to covet one or the other based strictly upon brand value, the German has the clear advantage. (It’s that lack of cachet which is precisely what is motivating Toyota to make this move.)
If Mercedes has a problem with its brand, it’s with the product and the degree to which the recent products have betrayed their brand values. Mercedes once had a reputation for building cars that were not only prestigious, but that were also as a rock solid as a vault. It has recently lost that reputation to a substantial degree, which effectively means that its own product errors led to an erosion of its branding effort.
As for Maybach, I believe that its problems are also ultimately product related. They look enough like a humbler Mercedes so as to appear to be badge engineered, and the buyer of exotic cars does not want to have a pedestrian product.
The successful exotics — take Bentley, for example — do not offer products that look anything like the parent company’s humbler offerings. Daimler would be best off if it simply redesigned the cars and let the stylists go a bit nuts, with a clear mission that the cars are NOT to look like a Mercedes in any way. As usual, it’s a product problem, one that no amount of branding can fix.
Dear RF,
Sorry everybody is busting your hump. I would just like to agree with your assessment yet again. I don’t know much, but I know branding, and it seems you do, too. I’m looking forward to reading the rebuttal piece. Perhaps that’ll net another 100 comments.
Crikey.
RF:
Lexus is stronger than Mercedes because it doesn’t build AMG-style cars. There is no confusion in the customer’s mind about what a Lexus is. Every time Mercedes promotes a 6.3-liter monster, journos and pistonheads lap it up. But it confuses brand perception amongst the majority of Mercedes buyers. Sport AND luxury? Isn’t that BMW?
Later today, I’ll post William C. Montgomery’s rebuttal to this piece. Meanwhile, a simple question: if you ask the average Lexus owner or aspiring Lexus owner to list what he expects from the brand, where would “sporting performance” sit on the list?
Lexus is stronger than Benz because they DON’T build AMG-style cars? Sorry, but that’s a flawed and short-sighted line of thinking. Lexus is stronger than Benz simply because it’s LEXUS. We’re talking about rock solid reliability, great prices, high quality, great service, and awesome luxury. THAT is why Lexus is stronger than Benz, not because they don’t offer AMG models.
Benz executives themselves have admitted that they have had too many models with too many variations over the years and that they would cut down on some models. Benz executives also commented that they would re-focus the brand to try and leapfrog Lexus in terms of quality and luxury.
Benz offers a great deal of redundant models and models that nobody really wants. We’re talking about the R-Class for instance. AMG model or NOT, the R-Class is an answer to a question nobody asked. Lexus is stronger because they don’t have any silly models like the R-Class. Let’s say you want a coupe/convertible from Benz. Do you buy a CL or a CLK? Do you buy an SL or an SLK? That right there shows Benz has too many models with too much overlap.
The Lexus model line is very simple and VERY clear. THAT is also why Lexus is strong. Let me restate for the umpteenth time that only SOME Lexus models will see F brand variants, not ALL models like Benz likes to do with AMG.
Fact is, if you take away ALL the AMG variants from the Benz lineup, you STILL have a convoluted mess of a line-up that confuses costumers. The AMG variants only add to the confusion, but the AMG variants do not create the confusion.
Lastly, did you ever think that maybe, just MAYBE current Lexus customers and owners were asking and begging Lexus to make more sporty models?
Lexus is stronger than Benz simply because it’s LEXUS
I think that we should emphasize that Lexus is a strong brand in the US and Canada, and perhaps a few minor markets such as Australia and New Zealand, but not globally. It had a rocky start in Japan, and is fairly flat in Europe. (Then again, trade barriers and monopolistic distribution agreements has made it difficult for any of the Asian automakers to really hit their stride in Europe.)
These cars are made primarily made for us in the USA. Toyota did a masterful job of leveraging its reputation for reliability into the Lexus marque. But what it has failed to do has been to create a hot model that could please the enthusiasts, who constitute a small group but who do provide the fervor and influence of evangelists. That has been an oversight on its part, and I’m glad that they’re fixing it.
I just hope that they find some expert suspension guys from Germany to help them get there, otherwise the effort may be for naught. The Toyota Production System, for all its merits, is not going to fix that deficiency.
Johnson:
Lastly, did you ever think that maybe, just MAYBE current Lexus customers and owners were asking and begging Lexus to make more sporty models?
Not for a picosecond.
If Lexus built something cheaper than the IS, that’d dilute the brand. If Lexus built an unreliable car, or a car with a bad interior, that’d dilute the brand. But if Lexus just wants to built cars that’re finally interesting, what’s so wrong with that?
RF:
Not for a picosecond.
And there-in lies the problem. There are some incorrect assumptions being made, as well as a few misconceptions.
Fact is, quite a few Lexus customers HAVE asked for more sporty models. This is especially true of owners of the IS and GS. Both the IS and GS are the sportier Lexus models in the lineup, and quite a few owners have wanted another level of sportiness and performance.
Another fact is the F sub-brand has been thrown around Toyota headquarters for years now. As far back as the late 1990s, several Lexus chief engineers were asking Toyota executives to green-light the sub-brand.
“If Lexus built something cheaper than the IS, that’d dilute the brand. If Lexus built an unreliable car, or a car with a bad interior, that’d dilute the brand. But if Lexus just wants to built cars that’re finally interesting, what’s so wrong with that?”
What’s wrong is this – Interesting isn’t Lexus’ market.
We all seem to agree that gearheads represent only a small fraction of the car market. So right off the bat it seems there is very limited profit potential for a luxury gearhead car. I’m not sure the potential profit is worth the risk of confussing the brand immage.
I don’t beleive people interested in classic-luxury are at all influenced by the existance of a sports-luxury offering. At best, they’ll be indifferent. At worst, they’ll begin to ask what Lexus is all about.
Right now Lexus is all about providing Sedan DeVilles that actually work and run w/o trouble. That’s all 99% of Lexus customers want. They don’t want to go whipping through S-curves. They want to go to the mall.
I question Lexus’ ability to take many customers from the M series, and even less so from AMG cars. Lexus has no sporting history so it should be a tough sell to begin with. In this market segment reliability isn’t the end all and be all. If the F cars don’t quite measure up, then Lexus will have egg on it’s face. If they do measure up, then there will still be the issue of clouding their brand message. I’m not sure the small number of sales – relative to total Lexus sales, justifies muddling the brand immage.
I could be wrong. Time will tell.
The vast majority of dissenting opinions on this subject seem to be based on mixed understandings of branding. Commenters are saying that the F series will strengthen Lexus’ brand by offering more interesting cars and that will lend credibility and interest to the brand. This is not incorrect, however, that is not a branding argument, that’s a “give the people what they want” argument.
That’s the problem – branding is the creation and preservation of a crystallized brand identity within the minds of consumers based on a consistent presentation of brand traits. It is creating a persona, and currently Lexus’ persona is something like a 35-50 year old investment banker with highly refined tastes in art and aged Scotch. And who wears nice suits from exclusive designers. And eats fancy cheese and drinks expensive wine, probably. Now imagine if this intelligent refined person all of a sudden took to, say, that type of skiing where you jump out of a helicopter. Or sold his yacht and got a Suzuki Hayabusa. While some might make the argument that it gives him depth of character, the end result is that your understanding of this person is changed, muddled; the fancy pants don’t mix right with a muscle shirt.
As I’ve stated before, YES they will sell plenty of these F-series cars, YES they will be well-designed and muscley and outperform the competition, YES this will expand and strengthen their brand offering. This is not the matter up for debate. This move represents a significant personality shift for Lexus and will confuse consumers, who are confusable not because they’re dumb or anything but because they don’t think about these things. By introducing this new and radically different line they are going to weaken the brand because it will no longer be a crystalline, tightly-focused brand; it will be changed and stretched to encompass entirely new brand traits. It might be a good business decision, but it is a bad BRANDING decision.
It is creating a persona, and currently Lexus’ persona is something like a 35-50 year old investment banker with highly refined tastes in art and aged Scotch.
I think that you incorrectly characterize what the Lexus brand is, which is where the difference lies. Lexus touts a tagline about pursuing perfection, but to its detriment, offers itself up as a Mercedes and BMW alternative that is somewhat lacking in cachet, but that also doesn’t have the reliability risk. It effectively peddles a risk-averse vision of the luxury car that involves compromising vigor in favor of an assured outcome at the repair shop. That baggage isn’t necessarily demanded by either the consumer or the manufacturer, it’s just part of the price to be paid to have this product.
That’s an understandable brand message, given its origins as an upsold Toyota. But what is notably lacking in that branding statement is the bona fide passion and excitement of owners who evangelize it as being something more than something that is well assembled. And as long as that’s the case, it will remain a drag on sales and its brand image, because successful brands in this space need a core evangelist group to spread the branding and product gospel to the fence sitters.
If successful, the ultimate outcome will be to enhance the current branding message — the message won’t change, it will just seem more legitimate. Offering performance variants and an ubercar do nothing to compromise the positive aspects of its current perfection branding message, while attacking the weaknesses of the marque in its present form. It should lead to both higher sales volumes and higher prices, which are evidence that the brand is working.
It’s just a matter of converting the TQM “surprise and delight” quality ethic into luxury sales. I mean, seriously, does anyone believe that the FJ Cruiser or Tacoma create any confusion to a Corolla or Camry buyer as to what Toyota is all about?
Another point that needs to be touched on, is that Lexus has made efforts at performance almost since they began, it’s just always been secondary to the pure luxury aspect. From the introduction of the SC400 (watch this: http://www.youtube.com/watch?v=-a4-odN2oIU), to the later GS and IS sedans, they haven’t avoided a performance image, it just hasn’t been their strongest suit. Even on their website, the GS is listed as a “performance luxury sedan” while the IS is a “sport luxury sedan.”
So, if performance goes against the Lexus brand, they’ve had issues almost since their inception, making this whole discussion outdated, if not outright irrelevent.
On the other hand, look at Lexus’s motto – the pursuit of perfection. Perfection is, at best, an abstract ideal. I can see how someone would find an LS the perfect car, but automotive novocain isn’t my idea of perfection, and I know I’m not the only one. However, they’ve always been about dominating the luxury market. One could take the F line of cars to mean the next step forward, just the next step in Toyota’s plan for world domination, to own the segment of the luxury market that Lexus has previously been weak in.
I do agree though, that this has to be handled carefully to be pulled off properly. But, so long as the cars are still reliable, the dealers stay excellent, the prices are right, and the cars are worth driving (only the latter should really be a challenge), and as long as the marketing is clear, I don’t see any problems. Your regular Lexus will be the most comfortable, most advanced, most reliable car your money can buy (without being the most expensive), a Lexus F will remain strong in those attributes, while being more involving.
The above commentator, Ryan, had some excellent points to contribute to this debate and the website in general.
However, he could not do so in a respectful fashion. He has been permanently banned form commenting on TTAC.
I remind everyone here that being right (or at least believing yourself to be right) does not relieve you of the responsibility to treat other members of this community with respect.
TTAC will continue to ban anyone who violates the rules above the comments box.
Pch101
” I mean, seriously, does anyone believe that the FJ Cruiser or Tacoma create any confusion to a Corolla or Camry buyer as to what Toyota is all about?”
No. But then, toyota is a full line brand- Econoboxes to crew cab pickups, and everything in between. The only thing Toyota stands for is reliability.
Lexus stands for reliable luxury. And I would argue luxury that is defined by softness and isolation, and creature comfort.
Ryan might be right that Lexus has always been trying to push the sporting aspect in some models, but it’s never really caught on as part of their brand identity. I still maintain that most Lexus buyers are the modern day equivalent of the Caddy buyer of a generation or two ago. They just want a boulevard cruiser – albeit one that will still be running at the end of the warranty period.
I’m not sure I agree with your assessment that the German cars have more cachet. Among the few well heeled people I know there seems to be a consensus that Mercedes is Nuvo Riche and therefore lacking cachet. I don’t know, I’m not really in that set, but that’s what I’m told.
I’d think any car costing 60K would have a bit of cachet. I don’t think it really matters that there is no “AMG” version, so to speak. If Lexus has a chachet problem, it’s probably quite similar to Caddy and MB’s cachet problem – cars that sell in the low 30K range.
“… But what is notably lacking in that branding statement is the bona fide passion and excitement of owners who evangelize it as being something more than something that is well assembled. And as long as that’s the case, it will remain a drag on sales and its brand image, because successful brands in this space need a core evangelist group to spread the branding and product gospel to the fence sitters.”
Respectfully, I don’t see that Lexus has had dragging sales, and the branding and product gospel do seem to be getting out – albeit w/o any -really- high performance versions.
Anyway, if we live long enough, we’ll be able to tell who’s right and who’s wrong. If I’m wrong, I’ll buy you a beer.
I would argue luxury that is defined by softness and isolation, and creature comfort.
The market doesn’t define it that way. The “luxury” segment is a function of price point and attitude. SUV’s, sedans, coupes, roadsters and 4WD vehicles are all sold as “luxury” vehicles in the US segment. It has a far broader reach than what you have categorized.
I still maintain that most Lexus buyers are the modern day equivalent of the Caddy buyer of a generation or two ago. They just want a boulevard cruiser – albeit one that will still be running at the end of the warranty period.
The poster Chris above is but one example of a Lexus buyer who defies your definition. When you consider the age and demographic of Cadillac buyers, they tend to skew older and poorer than the German and Japanese luxury marques. There just isn’t much cross-shopping between Cadillac and any of the imported brands in this segment. Lexus is an up and comer, Cadillac a distant also ran that is basically not even a factor.
Lexus gains many a sale from those who’d probably like to own a German car but are afraid to, given the service and reliability compromises that entails. There comes a point that many will trade that seat-in-the-pants intangible goodness for a lower repair bill and better treatment.
If Lexus has a cachet problem, it’s probably quite similar to Caddy and MB’s cachet problem – cars that sell in the low 30K range.
Not really, that’s about the starting point for the luxury range.
Here’s how you know that BMW and Mercedes are the cachet leaders — they are the benchmarks who everyone else tries to emulate. The 3-series is THE benchmark in the near-luxury segment, bar none, without a doubt. The S-class is the benchmark large sedan, the one that the LS aspires to be.
Lexus is a very good “fast follower”, it identifies and quickly copies brand leaders. But in contrast, noobody is attempting to copy Lexus designs. The fact that Lexus sets no trends as a style or taste leader is clear proof of its lack of cachet, relatively speaking. It’s a safe purchase, but a BMW is a far sexier one, and everyone knows it.
Let’s put all of this another way: Let’s suppose that you are in charge of Lexus. As you look back over the past two decades, you are pleased at your ability to grow sales, but want to tackle the cachet problem and become a taste maker who builds benchmark automobiles. The question becomes: How do you accomplish this?
Every other successful luxury marque has gone about this the same way: It creates a lust factor for its products. You can go nuts with the walnut and leather, but at the end of the day, that lust will come from some combination of drivetrain and handling prowess, because that’s where the intangible je ne sais quoi of such cars comes from, even for the buyer who tends to drive at 2/10ths all day long.
This is the mountain that Lexus wants to climb. The byproducts of its brand, contrary to many of the implicit arguments made here, are not set in stone or fully evolved. TMC’s wants to evolve and improve the brand, not just let it sit where it is. In this day and age, a company that does not evolve eventually dies, just look to GM if you want to see what happens to firms that don’t grow their brands to evolve with the times.
Lexus didn’t set out to make boring products without cachet, it just worked out that way because of its lack of engineering talent vis-a-vis the excitement factor. As the 3-series competitor, the IS is a logical car to trick out to meet that objective. And having one should sell a lot more IS 350’s, because that will position it into a middle slot that currently doesn’t exist within the IS nameplate.
“The market doesn’t define it that way. …”
I think Lexus buyers, for the most part, do. Whether they buy a coupe, sedan, SUV, etc. they are thinking of luxury in what I’ve called the classic (traditional Caddy) mode. Not performance.
“The poster Chris above is but one example of a Lexus buyer who defies your definition. When you consider the age and demographic of Cadillac buyers, they tend to skew older and poorer than the German and Japanese luxury marques. There just isn’t much cross-shopping between Cadillac and any of the imported brands in this segment. Lexus is an up and comer, Cadillac a distant also ran that is basically not even a factor.”
I’m sure someone wants a Ferrari pickup, but that doesn’t mean it should happen. Sure Caddy has customers who are older and poorer. That’s the result of relentless downmarketing. Caddy is almost meaningless as a luxury brand (or any other kind of brand). No, there isn’t much cross shopping between the German cars and Caddy. There used to be, in the 70s, but no more. All I’m saying is Lexus customers just want a quite comfortable reliable luxury car – most of them. They are attracted by the same qualities Caddy used to possess – smoothness, grace, and “The Standard of the World”. Most are not looking for a car that handles curves as well as an AMG.
“Lexus gains many a sale from those who’d probably like to own a German car but are afraid to, given the service and reliability compromises that entails. There comes a point that many will trade that seat-in-the-pants intangible goodness for a lower repair bill and better treatment.”
In other words, performance really isn’t their top priority. That’s probably true even for most of the people who still do choose to go with a German car.
“Here’s how you know that BMW and Mercedes are the cachet leaders — they are the benchmarks who everyone else tries to emulate. The 3-series is THE benchmark in the near-luxury segment, bar none, without a doubt. The S-class is the benchmark large sedan, the one that the LS aspires to be.”
Unless reliability is one of your primary concerns, then it Lexus that becomes the benchmark. The Germans would do well to emulate the leader before they loose market share the way the D3 have to the Asians.
“Let’s put all of this another way: Let’s suppose that you are in charge of Lexus. As you look back over the past two decades, you are pleased at your ability to grow sales, but want to tackle the cachet problem and become a taste maker who builds benchmark automobiles. The question becomes: How do you accomplish this?”
If I were in charge I’d say “whoa, who put this on my plate, I didn’t order this.” My company is already building the benchmark for quality and reliability. I’m quite content to continue to improve while the Germans figure out how to build a reliable car. I do like the sales graphs, and I’m reluctant to screw around with a winning formula. Cachet is something my brand already has, albeit of a different sort, or if it doesn’t have it, then evidently it doesn’t need it. When the graph shows me a serious decline in sales, then I’ll start panicking and flailing about with a different product mix. For now, I’m quite happy to have everyone in NA and incresingly in other parts of the world think of my car as the standard for classic luxury.
“Every other successful luxury marque has gone about this the same way: It creates a lust factor for its products. You can go nuts with the walnut and leather, but at the end of the day, that lust will come from some combination of drivetrain and handling prowess, because that’s where the intangible je ne sais quoi of such cars comes from, even for the buyer who tends to drive at 2/10ths all day long.”
I respectfully disagree. I don’t think most Lexus customers care one whit about drivetrain/handling prowess. If they really did care, it’s very difficult to see why they aren’t in a Bimmer.
To put it another way, BMW and MB, and Audi all give their customer plausible deniability. What I mean is the customer can pretend they didn’t buy the car for snob appeal, but rather for it’s driving dynamics – even though most of them don’t really give a damn about how many g’s the car pulls on the skidpad or how well it slaloms through the S turns. Most will find their greatest cornering challenge comes when trying to pull into a parking space. Lexus buyers are honest about what they want – luxury, reliability, and the snob appeal appropriate to the price of the car. They don’t need plausible deniability. That’s why Lexus doesn’t need the F car.
There is a difference between evolving and screwing with the basic concept. I don’t know that I’d classify the German cars as successful, given that they are loosing share to Lexus. Lexus should just keep eating the German’s lunch and not try to emulate them.
kazoomaloo:
By introducing this new and radically different line they are going to weaken the brand because it will no longer be a crystalline, tightly-focused brand; it will be changed and stretched to encompass entirely new brand traits. It might be a good business decision, but it is a bad BRANDING decision.
That is your opinion and nothing more. In due time, we will see if it is “bad branding” or not, and who here is ultimately right or wrong.
Ryan has nit the nail on the head with his points.