Lexus brand isn’t flying in Toyota’s home market
In trying to establish a Japanese-market foothold for Lexus, Toyota has seemingly fallen prey to the same tactic that made the Cadillac Cimmaron such a maroon. When trying to launch a brand, especially an upscale brand, it’s not advisable to rebadge existing models and crank up the price. It doesn’t seem to matter how good the car is, or how swanky the new $10-million-a-pop showroom is, once an Altezza, always an Altezza, and paying 20 percent more for the same car with a different logo is rightfully galling.
Still, few are giving up on Lexus in Japan. After all, Toyota has 45% of the car market there, it has built 160 plush Lexus dealerships at an estimated cost of $10 million each, and it has booked tons of prime-time TV ad slots. Most important, Lexus added the latest version of its flagship, the $77,000-plus LS sedan, to its lineup in September, 2006. Last year it accounted for more than half of Lexus sales in Japan.
Toyota says Lexus’ fortunes are improving. In the segments where Lexus competes, the company claims it outsells German rivals. Mercedes’ numbers, Toyota notes, include its A-class small car, and BMW sales figures count two SUVs. Lexus doesn’t sell an SUV in Japan, though the mid-size RX is due in 2009. And Lexus last year topped buyer surveys by researcher J.D. Power & Associates (MHP). “It’s going to take Lexus three to five years to create a brand image to rival Audi, BMW, or Mercedes,” says Hiroaki Kihara, editor of magazine Autocar Japan. “But they took many years to establish their brands in Japan, too.”
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