Lexus set to redesign car line by 2007, add performance unit, add car above LS!
01-28-04, 09:04 AM
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Best Lexus article ever!
01-28-04, 05:08 PM
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Lexus set to redesign car line by 2007, add performance unit, add car above LS!
http://www.autoweek.com/cat_content...._code=03048241
(08:54 Jan. 28, 2004)
Lexus set to redesign car line by 2007, add performance unit
By MARK RECHTIN | Automotive News
DETROIT - How high is high enough? How big is too big?
Those are the questions facing Lexus Division, which won the best-selling luxury brand title for the fourth straight year in 2003.
It also has accumulated more J.D. Power accolades than any other luxury brand, boasts the industry's highest sales per dealer and is among the leaders in dealer profitability.
But Denny Clements, Lexus general manager, says the brand has fallen into a predictable rhythm - and he wants to change that.
"We launch a car, then have a minor change after three years, and then a redesign two years after that," Clements said during an interview at the Detroit auto show.
"Meanwhile, the Europeans have new product news and variations coming every year, and they're always on magazine covers. Lexus needs to be like that. Lexus needs to have something always going on. It needs to have that buzz."
Clements said Lexus and parent Toyota Motor Corp. have set this stir-things-up agenda for the next few years:
A new distinct design specific to Lexus, to be seen first in the 2005 GS 430 and evolving from there.
A redesign of each car line by spring 2007.
All-wheel drive availability with the redesigns.
The addition of a flagship above the LS 430.
The creation of a factory performance division, akin to Mercedes-Benz's AMG.
Except for the launch of the RX 400h hybrid sport wagon late this year, the next 12 months will be static in terms of product. But in early 2005 the spigot will begin opening wide.
After spending the last several years bulking up in SUVs, Lexus is returning to its core strength: luxury cars. The next-generation GS 430 and GS 300 sport sedans, which will arrive in early 2005, will be followed by the replacements for the IS 300, ES 330 and LS 430, all arriving by spring 2007.
Jim Press, COO of Toyota Motor Sales U.S.A. Inc., says most Lexus growth will come from the lower end of the lineup.
While Lexus will not go any further downmarket than the IS 300 sport sedan, which starts at $29,980, he said the next generation will offer several versions when it arrives in fall 2005. The IS 300's current volume of 1,000 units a month comes from just two derivatives, a sedan and an all-but-ignored wagon.
"The key to volume growth is the IS 300," Press said at the Detroit show. "It's in a price category where having volume is OK. It's feeder stock for future Lexus purchases."
Clements promises the IS 300 replacement will do a better job competing against the BMW 3 series and its 16 variants, which sell about 10,000 units a month.
"We'll have a sedan, coupe and convertible, all-wheel drive and a couple of engine choices," Clements said. "It's a huge opportunity. Right now the IS 300 has a cult following, but we could be doing 5,000 or 6,000 units a month."
That kind of volume growth would extend Lexus well past the 300,000-unit mark, which consultant Eric Noble of The Car Lab in Orange, Calif., warns is a danger point.
"They are risking dilution of the brand," says Noble. "There is no evidence that a luxury brand can sell more than 250,000 units sustainably. That Lexus, Mercedes and BMW are all flirting with the cliff edge doesn't make it any safer a place."
At the Tokyo auto show last year, Lexus unveiled a new look that it calls its own design language. No longer will Lexus vehicles be rebadged versions of Japan-market Toyotas.
The first vehicle to show the new look will be the 2006 GS 430 and GS 300. "The design will not be cookie-cutter, but there will be similar cues across the line," Clements said.
To critics who pan Lexus styling as bland, Clements says, "Vanilla is the best-selling ice cream. But we'll have some other flavors, too."
Lexus also will have dedicated engineering teams from now on, not transferees from a Toyota vehicle project reassigned to do a more upscale Lexus version. Toyota and Lexus product development teams will compete against each other to create the best vehicle.
"Whatever products we need, we'll get," Clements said. "The product planners, designers and chief engineers now are all Lexus-dedicated. There will be more performance, bigger and better wheels, things like that."
But while Clements predicts big things for the GS 430 and IS 300 replacements, no vehicle gets him more emotional than the pending redesign of the LS 430.
It is more than just a redesign of Lexus' flagship. He promises that the new version "will be 1989 all over again," a reference to the splash Lexus made at its debut.
"It will make the same impact as the original," Clements said.
George Peterson, president of the AutoPacific consulting firm in Tustin, Calif., says the next Lexus flagship needs to make that kind of impact.
"The LS 430 scores at the top of the list of all our surveys," Peterson says. "It does everything as well or better as customers expect. But it doesn't have that passionate visual appeal. If Lexus is going to deliver on a more passionate appearance, then the LS 430 is the place to go."
Clements foresees future Lexus vehicles offering programmable vehicle-dynamic software. He believes drivers will pay a premium for a vehicle that can be adjusted to perform according to a driver's mood.
That means a Lexus owner could drive a road rocket one day, a grand tourer the next and a luxury cruiser the day after that - all with the touch of a button or switch. Although the technology sounds like a long shot for the next-generation products, Clements believes software is advancing fast enough to make it possible.
"If we add technology, it needs to be intuitive and something Americans don't want to have to work at to enjoy," he said. "Americans don't read owners manuals, and they don't want three-hour seminars to learn how to use their car."
Lexus also is moving to adopt awd. Clements concedes that the brand has lost customers in the snow belt by not equipping its cars with awd.
Executives also confirmed that a long-rumored super-luxury Lexus is closer to reality, a model that would go up against sedans such as the Mercedes S600 and BMW 7 series. Executives are mum on whether that means a hybrid powertrain, a stretched wheelbase for the LS 430 or a V-12 pulled from the Japan-market Century. But it is clear that the car will happen.
"It's not an issue of if, but when," Press said. "We just need to work out the business case, development cost and volume estimates."
Lexus also will take a page from the Germans by creating a performance division similar to Mercedes-Benz's AMG unit and BMW's M brand.
Lexus' first attempt, the L-Tuned accessories line, was aborted last year because it mostly offered appearance add-ons that had little to do with performance.
Clements said the next iteration will be better.
"An AMG-type sub-brand is coming," he said. "We have to have those image products."
Susan Jacobs, president of luxury brand specialist Jacobs & Associates in Rutherford, N.J., agrees that Lexus is on the right track by working to expand its product lineup and technical base.
"One of Lexus' major drawbacks has been a very limited lineup, primarily in terms of body styles and powertrain options," she said in an interview last week.
"There were pockets of luxury buyers that went to the German makers that Lexus didn't and couldn't appeal to.
"The major strength for Lexus going forward will be the greater variety of product and greater functionality, such as all-wheel drive."
But for all the near-term changes, Lexus bosses are not about to forget what got them to the pinnacle.
"We can't lose sight of the fact that Lexus is, first, a luxury car," Clements said. "We're not here to reinvent ourselves. We just sold 260,000 vehicles to people who love our products."
(08:54 Jan. 28, 2004)
Lexus set to redesign car line by 2007, add performance unit
By MARK RECHTIN | Automotive News
DETROIT - How high is high enough? How big is too big?
Those are the questions facing Lexus Division, which won the best-selling luxury brand title for the fourth straight year in 2003.
It also has accumulated more J.D. Power accolades than any other luxury brand, boasts the industry's highest sales per dealer and is among the leaders in dealer profitability.
But Denny Clements, Lexus general manager, says the brand has fallen into a predictable rhythm - and he wants to change that.
"We launch a car, then have a minor change after three years, and then a redesign two years after that," Clements said during an interview at the Detroit auto show.
"Meanwhile, the Europeans have new product news and variations coming every year, and they're always on magazine covers. Lexus needs to be like that. Lexus needs to have something always going on. It needs to have that buzz."
Clements said Lexus and parent Toyota Motor Corp. have set this stir-things-up agenda for the next few years:
A new distinct design specific to Lexus, to be seen first in the 2005 GS 430 and evolving from there.
A redesign of each car line by spring 2007.
All-wheel drive availability with the redesigns.
The addition of a flagship above the LS 430.
The creation of a factory performance division, akin to Mercedes-Benz's AMG.
Except for the launch of the RX 400h hybrid sport wagon late this year, the next 12 months will be static in terms of product. But in early 2005 the spigot will begin opening wide.
After spending the last several years bulking up in SUVs, Lexus is returning to its core strength: luxury cars. The next-generation GS 430 and GS 300 sport sedans, which will arrive in early 2005, will be followed by the replacements for the IS 300, ES 330 and LS 430, all arriving by spring 2007.
Jim Press, COO of Toyota Motor Sales U.S.A. Inc., says most Lexus growth will come from the lower end of the lineup.
While Lexus will not go any further downmarket than the IS 300 sport sedan, which starts at $29,980, he said the next generation will offer several versions when it arrives in fall 2005. The IS 300's current volume of 1,000 units a month comes from just two derivatives, a sedan and an all-but-ignored wagon.
"The key to volume growth is the IS 300," Press said at the Detroit show. "It's in a price category where having volume is OK. It's feeder stock for future Lexus purchases."
Clements promises the IS 300 replacement will do a better job competing against the BMW 3 series and its 16 variants, which sell about 10,000 units a month.
"We'll have a sedan, coupe and convertible, all-wheel drive and a couple of engine choices," Clements said. "It's a huge opportunity. Right now the IS 300 has a cult following, but we could be doing 5,000 or 6,000 units a month."
That kind of volume growth would extend Lexus well past the 300,000-unit mark, which consultant Eric Noble of The Car Lab in Orange, Calif., warns is a danger point.
"They are risking dilution of the brand," says Noble. "There is no evidence that a luxury brand can sell more than 250,000 units sustainably. That Lexus, Mercedes and BMW are all flirting with the cliff edge doesn't make it any safer a place."
At the Tokyo auto show last year, Lexus unveiled a new look that it calls its own design language. No longer will Lexus vehicles be rebadged versions of Japan-market Toyotas.
The first vehicle to show the new look will be the 2006 GS 430 and GS 300. "The design will not be cookie-cutter, but there will be similar cues across the line," Clements said.
To critics who pan Lexus styling as bland, Clements says, "Vanilla is the best-selling ice cream. But we'll have some other flavors, too."
Lexus also will have dedicated engineering teams from now on, not transferees from a Toyota vehicle project reassigned to do a more upscale Lexus version. Toyota and Lexus product development teams will compete against each other to create the best vehicle.
"Whatever products we need, we'll get," Clements said. "The product planners, designers and chief engineers now are all Lexus-dedicated. There will be more performance, bigger and better wheels, things like that."
But while Clements predicts big things for the GS 430 and IS 300 replacements, no vehicle gets him more emotional than the pending redesign of the LS 430.
It is more than just a redesign of Lexus' flagship. He promises that the new version "will be 1989 all over again," a reference to the splash Lexus made at its debut.
"It will make the same impact as the original," Clements said.
George Peterson, president of the AutoPacific consulting firm in Tustin, Calif., says the next Lexus flagship needs to make that kind of impact.
"The LS 430 scores at the top of the list of all our surveys," Peterson says. "It does everything as well or better as customers expect. But it doesn't have that passionate visual appeal. If Lexus is going to deliver on a more passionate appearance, then the LS 430 is the place to go."
Clements foresees future Lexus vehicles offering programmable vehicle-dynamic software. He believes drivers will pay a premium for a vehicle that can be adjusted to perform according to a driver's mood.
That means a Lexus owner could drive a road rocket one day, a grand tourer the next and a luxury cruiser the day after that - all with the touch of a button or switch. Although the technology sounds like a long shot for the next-generation products, Clements believes software is advancing fast enough to make it possible.
"If we add technology, it needs to be intuitive and something Americans don't want to have to work at to enjoy," he said. "Americans don't read owners manuals, and they don't want three-hour seminars to learn how to use their car."
Lexus also is moving to adopt awd. Clements concedes that the brand has lost customers in the snow belt by not equipping its cars with awd.
Executives also confirmed that a long-rumored super-luxury Lexus is closer to reality, a model that would go up against sedans such as the Mercedes S600 and BMW 7 series. Executives are mum on whether that means a hybrid powertrain, a stretched wheelbase for the LS 430 or a V-12 pulled from the Japan-market Century. But it is clear that the car will happen.
"It's not an issue of if, but when," Press said. "We just need to work out the business case, development cost and volume estimates."
Lexus also will take a page from the Germans by creating a performance division similar to Mercedes-Benz's AMG unit and BMW's M brand.
Lexus' first attempt, the L-Tuned accessories line, was aborted last year because it mostly offered appearance add-ons that had little to do with performance.
Clements said the next iteration will be better.
"An AMG-type sub-brand is coming," he said. "We have to have those image products."
Susan Jacobs, president of luxury brand specialist Jacobs & Associates in Rutherford, N.J., agrees that Lexus is on the right track by working to expand its product lineup and technical base.
"One of Lexus' major drawbacks has been a very limited lineup, primarily in terms of body styles and powertrain options," she said in an interview last week.
"There were pockets of luxury buyers that went to the German makers that Lexus didn't and couldn't appeal to.
"The major strength for Lexus going forward will be the greater variety of product and greater functionality, such as all-wheel drive."
But for all the near-term changes, Lexus bosses are not about to forget what got them to the pinnacle.
"We can't lose sight of the fact that Lexus is, first, a luxury car," Clements said. "We're not here to reinvent ourselves. We just sold 260,000 vehicles to people who love our products."
01-28-04, 05:13 PM
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Oh hell yeah.
01-28-04, 05:20 PM
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Awesome news from lexus and i am very excited about this. On a side note, since this article is posted here, shouldn't the same article posted in the LS forum be moved here too?
Last edited by thisguy_06; 01-28-04 at 05:23 PM.
01-28-04, 05:21 PM
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Re: Lexus set to redesign car line by 2007, add performance unit, add car above LS!
Originally posted by 1SICKLEX
Lexus also will take a page from the Germans by creating a performance division similar to Mercedes-Benz's AMG unit and BMW's M brand.
Lexus' first attempt, the L-Tuned accessories line, was aborted last year because it mostly offered appearance add-ons that had little to do with performance.
Clements said the next iteration will be better.
"An AMG-type sub-brand is coming," he said. "We have to have those image products."
Lexus also will take a page from the Germans by creating a performance division similar to Mercedes-Benz's AMG unit and BMW's M brand.
Lexus' first attempt, the L-Tuned accessories line, was aborted last year because it mostly offered appearance add-ons that had little to do with performance.
Clements said the next iteration will be better.
"An AMG-type sub-brand is coming," he said. "We have to have those image products."
1SICK, thank you for the wonderful, wonderful news.
I'm also interested to see what the car above the LS430 will be like, as well as the new LS.
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01-28-04, 05:27 PM
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On a side note, since this article is posted here, shouldn't the same article posted in the LS forum be moved here too?
This is going to SOLIDIFY Lexus as a top MARQUE! They will begin to go head to head with the Germans as well as seperate themselves even further from the other Japanese luxo brands that are improving.
Funny world, it seems Lexus made EVERYONE change the past 15 years, the competition has stepped it up trying to catch up or further the performance gap, and Lexus has decided to respond. Excellent.
I have a feeling the next LS is going to be an absolute head turning blast.
I already liked the improvements to the 04 model (similar to the 98-00 model LS).
01-28-04, 05:28 PM
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DETROIT -- Toyota Motor Corp. (NYSE:TM - News) wants to expand its Lexus brand significantly by beefing up a sporty entry-level luxury model and possibly adding to its product line a couple of vehicles priced above $70,000 that would put Lexus in direct competition with DaimlerChrysler AG's (NYSECX - News) Mercedes-Benz and BMW AG.
Denny Clements, head of the Lexus brand and a senior executive at Toyota's U.S. sales unit in Torrance, Calif., told The Wall Street Journal he couldn't be happier with the way his brand is performing. Lexus sold 259,755 vehicles last year, up 11% from 2002.
Mr. Clements is aiming to boost Lexus's annual sales to 350,000 vehicles within the five years, though its sales this year are likely to show only a modest increase at best.
Still, he said unleashing an assault on BMW's near monopoly on younger buyers with its 3-Series cars and Mercedes' equally strong grip on consumers buying luxury cars priced above $70,000 "should give us a huge opportunity to grow Lexus."
He noted Mercedes has a dozen model variants that are priced over $70,000, while Lexus has none. The brand's flagship car, the LS430 sedan, starts around $ 54,000. Mr. Clements said recent Lexus surveys have shown its customers are interested in buying higher-priced vehicles, and in some cases leaving Lexus to buy Mercedes cars. "So we are asking [Toyota's product planning office in Japan] for more product offerings at the higher end," he added.
Mr. Clements declined to be specific about what type of super-luxury vehicles he is looking for, but noted that among them are "a sedan" and "a sports car."
In the entry-level luxury segment -- which has been growing as vigorously as the segment for $70,000 or above luxury cars -- Mr. Clements said Lexus is looking to offer more body styles and other variants for the redesigned IS car in an effort to dislodge BMW's near monopoly on sporty, entry-level luxury-car buyers. Lexus hasn't said exactly when the redesign IS would arrive in dealer showrooms, but one Toyota official said it should come within the next two to three years.
Mr. Clements noted BMW sells about 10,000 3-Series cars a month, which he said are offered in several body styles, including convertible, and with powertrain and other options. "A half of those sales are coupes, and I don't even have an IS coupe in my lineup," he said.
Currently, Lexus offers two IS models -- a sedan and a hatchback. "We need for sure a coupe, a convertible and a sedan with multiple powertrain offerings," said Mr. Clements. He went on to say, "It's important for us to be competitive in the entry-level luxury segment" to capture those 30-something consumers who are buying BMWs. "Those are young professionals that are going to be luxury-car buyers for the rest of their lives."
-By Norihiko Shirouzu; The Wall Street Journal
Denny Clements, head of the Lexus brand and a senior executive at Toyota's U.S. sales unit in Torrance, Calif., told The Wall Street Journal he couldn't be happier with the way his brand is performing. Lexus sold 259,755 vehicles last year, up 11% from 2002.
Mr. Clements is aiming to boost Lexus's annual sales to 350,000 vehicles within the five years, though its sales this year are likely to show only a modest increase at best.
Still, he said unleashing an assault on BMW's near monopoly on younger buyers with its 3-Series cars and Mercedes' equally strong grip on consumers buying luxury cars priced above $70,000 "should give us a huge opportunity to grow Lexus."
He noted Mercedes has a dozen model variants that are priced over $70,000, while Lexus has none. The brand's flagship car, the LS430 sedan, starts around $ 54,000. Mr. Clements said recent Lexus surveys have shown its customers are interested in buying higher-priced vehicles, and in some cases leaving Lexus to buy Mercedes cars. "So we are asking [Toyota's product planning office in Japan] for more product offerings at the higher end," he added.
Mr. Clements declined to be specific about what type of super-luxury vehicles he is looking for, but noted that among them are "a sedan" and "a sports car."
In the entry-level luxury segment -- which has been growing as vigorously as the segment for $70,000 or above luxury cars -- Mr. Clements said Lexus is looking to offer more body styles and other variants for the redesigned IS car in an effort to dislodge BMW's near monopoly on sporty, entry-level luxury-car buyers. Lexus hasn't said exactly when the redesign IS would arrive in dealer showrooms, but one Toyota official said it should come within the next two to three years.
Mr. Clements noted BMW sells about 10,000 3-Series cars a month, which he said are offered in several body styles, including convertible, and with powertrain and other options. "A half of those sales are coupes, and I don't even have an IS coupe in my lineup," he said.
Currently, Lexus offers two IS models -- a sedan and a hatchback. "We need for sure a coupe, a convertible and a sedan with multiple powertrain offerings," said Mr. Clements. He went on to say, "It's important for us to be competitive in the entry-level luxury segment" to capture those 30-something consumers who are buying BMWs. "Those are young professionals that are going to be luxury-car buyers for the rest of their lives."
-By Norihiko Shirouzu; The Wall Street Journal
01-28-04, 05:28 PM
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Looking Forward: The Buzz
Lexus
2006 Coupe
Lexus is reportedly working on an ultra-luxury coupe that will sell for roughly $150,000, a figure that will place it head on with some of the world's most exotic two-doors. It's intended as a limited-production halo car that will add prestige to the Lexus name.
:Edmunds
Lexus
2006 Coupe
Lexus is reportedly working on an ultra-luxury coupe that will sell for roughly $150,000, a figure that will place it head on with some of the world's most exotic two-doors. It's intended as a limited-production halo car that will add prestige to the Lexus name.
:Edmunds
01-28-04, 05:29 PM
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Excellent article.
The only gripe I have is that at one point they say 2005 GS and one point they say 2006. I tend to look down highly on the validity of something when they can't get the simplest things straight.
Just my .02 but a nice article nonetheless.
-Anthony
The only gripe I have is that at one point they say 2005 GS and one point they say 2006. I tend to look down highly on the validity of something when they can't get the simplest things straight.
Just my .02 but a nice article nonetheless.
-Anthony
01-28-04, 05:56 PM
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I'm cautiously optimistic but really quite worried. As the first article pointed out, Lexus is the best-selling, most award-winning brand out there. All these changes sound like they are going to become just like BMW or Benz, competing head-to-head against them in EVERY segment of the market. One reason I think those companies have slipped recently is a loss of focus--they sell so many models in so many variations that there's no way they can continue to focus on the basics of producing excellent cars. Although Toyota is a mammoth company, they do not have unlimited resources. Their talk of breaking further away from Toyota will mean higher overhead, rising prices, and possibly an erosion of talent.
Like I said, I am cautiously optimistic. They CAN accomplish all this, but it will be interesting to look back ten years from now. It's entirely possible that we're seeing the pinnacle of Lexus right now, and will look back sadly on "the good old days" when all they sold were the best luxury cars available. Not the most exciting or highest-performing, mind you, but clearly the best.
Like I said, I am cautiously optimistic. They CAN accomplish all this, but it will be interesting to look back ten years from now. It's entirely possible that we're seeing the pinnacle of Lexus right now, and will look back sadly on "the good old days" when all they sold were the best luxury cars available. Not the most exciting or highest-performing, mind you, but clearly the best.
