Go Back   Club Lexus Forums > General Forums > Car Chat
Sign in using an external account
Register Forgot Password?

In Japan, a Lexus just doesn't have that cachet (merged thread)

Reply
 
 
 
 
Thread Tools Search this Thread Display Modes
Old 11-15-06, 08:37 AM   #1
GFerg
Speaks French in Russian
Trader Score: (0)
 
GFerg's Avatar
 
Join Date: Oct 2002
Location: What is G?
Posts: 12,106
Send a message via AIM to GFerg
Default In Japan, a Lexus just doesn't have that cachet (merged thread)

In Japan, a Lexus just doesn't have that cachet

Despite its popularity in the U.S., the Toyota brand faces skeptical consumers at home.


Quote:
TOKYO These days no one scoffs at Toyota Motor Corp., the world's most profitable auto manufacturer with an apparently fine-tuned sense of what drivers want.

So it may be hard to recall the skepticism in the 1980s when this Japanese company, known then for engineering dependable cars at affordable prices, announced plans to crash the luxury car club controlled by iconic names such as Mercedes, BMW and Cadillac.

Today, Toyota's luxury Lexus sedans, coupes and sport utility vehicles are clogging country club parking lots across America.

Lexus has been the bestselling luxury car in the U.S. for the last six years. Its quiet ride and sleek style give middlebrow Toyota something to appeal to the driver who covets bells and whistles such as an eight-speed automatic transmission, seats that give massages and 19 yes, 19! surround-sound speakers.

Yet in Japan, most luxury car buyers have eyeballed the Lexus, kicked its tires and said, "Give me something European."

Germany's Mercedes and BMW are still the luxury cars of choice in Japan. Mercedes, owned by DaimlerChrysler, sold more than 58,000 cars in Japan last year; BMW has delivered 38,400 in the first 10 months of 2006.

Japan may not be the world's biggest market for premium cars, but it's one with growing demand and a consumer thirst for the extras that make for healthy profits.

When Lexus made its debut in Japan in September last year, Toyota executives said they expected to sell 50,000 to 60,000 vehicles in the first year. They have sold just half that after more than 14 months on the market.

"The reality is that, ironically for Toyota, Japan is proving to be a difficult market," said Christopher Richter, an auto industry analyst at CLSA Asia Pacific in Tokyo. "Their difficulty here is that there is greater panache in owning a Mercedes or a BMW. In the U.S., the Lexus is a sensible reward for personal success.

"But in Japan, people want something that says, 'Hey, I spent stupid money on a car.' "

Getting that kind of reaction with a Lexus is difficult in Japan, where the name still means Toyota and doesn't generate much of a frisson. Unlike in the U.S., where Toyota established Lexus as an independent premium brand, Lexus models sold in Japan were all previously marketed as Toyotas: the Altezza, the Aristo, the Soarer and the Celsior.

"Lexus models are just changed models of Toyota cars that didn't sell well in Japan," said Makiteru Ishikawa, an auto industry journalist and a panelist who helps select the prestigious Japan Car of the Year.

He said Toyota's corporate culture remained too focused on high volumes, failing to understand that premium cars must be exclusive, not just expensive.

Toyota executives acknowledge that the launch has been slower than hoped.

"We don't know why they are a little more cautious about buying Japanese for luxury," said Paul Nolasco, a Toyota spokesman in Tokyo. The problem is not that no one knows the Lexus name, he said.

Toyota's research surveys put Lexus brand awareness at 84% of potential car buyers, about 10 percentage points below BMW and Mercedes but still a high level of penetration.

The problem is that Lexus is far behind Mercedes when respondents were asked whether the car represented luxury (though it polled roughly the same as BMW in that category).

Japan is a fiercely competitive playing field for the world's biggest brands. Luxury items such as handbags and jewelry prospered even during Japan's prolonged recession of the 1990s.

Last spring, Louis Vuitton chose Tokyo to host the first ready-to-wear catwalk show outside of Paris. Gucci just opened a flagship store in Tokyo's pricey Ginza district. But Japanese consumers seem reluctant to put Lexus in this rarified category.

"I know the mechanics of Japanese cars are excellent, but to me, the outside looks are similar to every other Japanese car," said Emi Bamba, 57, who has been driving a Mercedes for the last 20 years.

She drove a Cadillac before that after she saw how easily her Japanese Mazda was crushed in a traffic accident. "Japanese cars don't make any impact on me," Bamba said.

That failure is clearly galling to Toyota, which is accustomed to generating mostly happy corporate news. Toyota is not just the world's most profitable auto manufacturer. It is in the passing lane preparing to overtake General Motors Corp. as the world's largest seller of cars.

With its pioneering hybrid cars, Toyota continues to swipe market share from Detroit's automakers and saw its profit soar to $3.44 billion in the last fiscal quarter alone.

Toyota's Nolasco said the news wasn't all bad. Sales of Lexus' IS and GS sedan series have captured nearly one-third of the market against the Mercedes and BMW brands they compete against, he said. And in September, Toyota added the LS460 to the lineup, selling 12,000 of its most extravagant model so far.

Toyota's competitors aren't about to gloat publicly, at least.

"A Lexus is essentially a Toyota in the minds of Japanese consumers, and Toyota focused for decades on serving a mass market, so the Japanese see Toyotas as a mass product," said Yuchiro Ito, a spokesman for BMW Japan. "But Toyota is extremely serious about developing a serious product, and once they have put the Lexus models through a full cycle of changes, the real battle will begin."

Other observers point to wider problems in the world's second-largest car market. Sales of regular passenger vehicles are declining in Japan, a worrying trend that may be hard to reverse as long as the country's population continues to shrink.

The domestic auto industry is being sustained mostly by an unexpected boom in minis: small passenger vehicles that weigh about half a normal passenger car and are on average 40% more fuel efficient. Japanese manufacturers sold more than 1 million minis in the first half of 2006.

Some see this development as a sign of a new caution among Japanese consumers, a search for value and performance that may play to Lexus' strengths.

"The people buying Lexus now tend to be small company owners who live in small towns," said auto journalist Ishikawa, who says most Lexus drivers are over 40. "They don't want to be regarded as rich or rumored to have made money by doing something wrong. And small company presidents whose businesses deal with Toyota only buy Toyota cars, even if they have the money to buy Mercedes or BMW."

Nolasco said Toyota could generate buzz for the Lexus with changes in design and styling. And the Lexus LS460 has features aimed at anticipating the needs of drivers and passengers, such as infrared sensors that read body temperatures and then provide each rider with individually attuned climate control.

But critics like Ishikawa say Toyota needs to think about the driving experience. He drove the LS460 and found it flawless. "It ran fast, powerful and safe," he said. But there was a deficit in the pizazz department.

"There is no characteristic that brings pleasure in owning it or a feeling that it is fun to drive," he said. "If cars can be said to represent the national culture, then Toyota Lexus is the car that represents Japan.

"It is a straight-A student."
http://www.latimes.com/classified/au...eds-autos-news
This ad is not displayed to registered members.
Register your free account today and become a member on Club Lexus!
__________________
1995 ES300 (sold)
1997 Nissan Maxima SE 5-speed Black

VP of TLN (#23)
GFerg is offline   Reply With Quote
Old 11-15-06, 09:24 AM   #2
rominl
exclusive matchup

Trader Score: (4)
 
rominl's Avatar
 
Join Date: May 2002
Location: Lovely OC
Posts: 79,145
Default

very interesting article, i have to say i agree with a lot of it, especially about japan being a tough market for toyota themselves, and they really need to find ways to kick themselves up and be the king in luxury market there as well. just like in europe you see people getting "domestic", in japan lexus should find ways to win over mb and bmw.

and no matter how they put it, the fact that their sales number are way under their own expectations, that's not a good start
__________________
Yes, I drove it. The great feeling of boiling blood.
rominl is offline   Reply With Quote
Old 11-15-06, 09:51 AM   #3
Hameed
CF fanatic
Trader Score: (0)
 
Hameed's Avatar
 
Join Date: Nov 2002
Location: Lake Ontario
Posts: 6,973
Send a message via MSN to Hameed Send a message via Yahoo to Hameed
Default

Very interesting and ironic article!

I found this comment in particular very interesting coming from the Japanese critic Ishikawa -
Quote:
There is no characteristic that brings pleasure in owning it or a feeling that it is fun to drive," he said. "If cars can be said to represent the national culture, then Toyota Lexus is the car that represents Japan.
It sounds like he is a European, not a Japanese!

Quote:
Originally Posted by rominl View Post
and no matter how they put it, the fact that their sales number are way under their own expectations, that's not a good start
Yes, it may not be a good start as in they did not meet their projected sales targets, however in the grand scheme of things, I think they did a great job in the first year already.

I mean they are facing over 100 years of established brands, come on, give them a break. You think they are doing badly in 1 year selling less than 30,000 cars???

The way I see it, this so called "lackluster" sales figure is actually icing on the cake (for a brand that technically has been out for just over a year) and will only get better. Keep in mind that Toyota always learns from most of their mistakes and this will no doubt change as the years go by.

It all boils down to perceptions that people have and we all know that changes over time.
__________________

1999 LEXUS GS400 :: Mod Journal :: Custom Exhaust Video
2005 TOYOTA 4RUNNER V6 SE :: Mod Journal - Coming soon
2006 HONDA CIVIC HYBRID
Hameed is offline   Reply With Quote
Old 11-15-06, 09:54 AM   #4
mkorsu
Zombie Slayer
Trader Score: (0)
 
mkorsu's Avatar
 
Join Date: May 2004
Location: East Bumble F, NJ
Posts: 6,053
MarkKorsu
Default

I'm not really surprised at all by this information.

Look at it this way. Exclude any Domestic bias here too. Chevrolet makes the Monte Carlo. Next year, Chevy starts a new high-end brand "Stellar". Will you now think that the Monte Carlo is better or more exclusive since it a Stellar Monte Carlo and not a Chevy Monte Carlo? Of course not.

While Toyota had much higher expectations for the Lexus brand, until more exclusivity is added to those vehicles sales will not increase to the expected levels.
__________________

sig created by GSoup

"I am a carton of Hate and he is a wedge of Spite."
TLN member #17 (and you don't want to know why)
MECP Certified Basic Installer
(Currently studying for the Advanced Exam!!! SHHHH!)
Custom Fabrication & Enclosure Design Instructor
mkorsu is offline   Reply With Quote
Old 11-15-06, 10:27 AM   #5
Gojirra99
Super Moderator
Trader Score: (0)
 
Gojirra99's Avatar
 
Join Date: Oct 2002
Location: Canada
Posts: 27,958
Default

& they really need to differentiate more between the luxury Toyota models from the Lexus models there. In the long run, you can't have the Toyota Crown's & the likes to be as luxuriously equipped as most Lexus models. I think they need to gradually change the Toyota brand models there to be non-luxurious lower priced models only, & market the luxurious higher priced models as Lexus only, there's WAY too much overlap now.

It's good that the new LS is doing extremely well & should help their sales a lot there though
__________________
2008 Lexus LS460L Executive Package, Noble Spinel Mica/Alabaster PICTURES HERE
2003 Lexus SC430, Midnight Cherry / Ecru.

Gojirra99 is offline   Reply With Quote
Old 11-15-06, 11:24 AM   #6
RA40
Moderator
Trader Score: (6)
 
RA40's Avatar
 
Join Date: May 2003
Location: California
Posts: 15,673
Default

If I were living over there in the parts we visited, I would want a mini or at minimal the Altezza.

It is a whole different culture from what we as Americans know in terms of buying motivation. Little things we'd not even think of when buying can have impact for them.

I thought Feng Shui was weird and some people develop a whole set of characteristics/priorities based on this...imagine a culture like Japan steeped in tradition having to accept Lexus. Toyota for generations has served the country well, they may see it as caving into westernized influences.
__________________

Mike
RA40 is offline   Reply With Quote
Old 11-15-06, 02:13 PM   #7
Kaban
Lead Lap
Trader Score: (0)
 
Kaban's Avatar
 
Join Date: Apr 2001
Location: S. California
Posts: 687
Send a message via ICQ to Kaban
Default

They need to stop knocking off other peoples designs and draw their own pictures.
__________________
01 GS430
Kaban is offline   Reply With Quote
Old 11-15-06, 02:27 PM   #8
Lexmex
Super Moderator
Trader Score: (0)
 
Lexmex's Avatar
 
Join Date: Apr 2004
Location: Miami, Florida
Posts: 16,384
Default

My cousin is over in Japan and was showing his friends my car domain site. They were very surprised at how we treat Lexus like a luxury vehicle as to them it is a Toyota. That is one reason for so much reverse badging from Toyota to Lexus over there, to appear distinct.

In Mexico, a Camry is considered more a luxury vehicle not a family car. My boss drives a Honda Accord and feels the same way. Now, although we don't have Lexus here, both Acura (has about 4 models now) and Infiniti (used to have 2 now just has the Q45) are looked at as oddities. Audi (much bigger in terms of popularity here than in the U.S.), BMW and Mercedes are the kings. The sense of quality that we associate with Japanese vehicle is somewhat generalized here, but not nothing as concrete/specific as we know in the U.S.
__________________
Homepage of my 1999 RX300 AWD
Lexmex is offline   Reply With Quote
Old 11-15-06, 02:39 PM   #9
encore888
Lexus Champion
Trader Score: (0)
 
encore888's Avatar
 
Join Date: Mar 2005
Location: CA
Posts: 8,695
Default

The Lexus critics come out in full force for this one--another LA Times piece but this time, a bit more balanced. The 12,000 advance LS 460 sales is way past expectations.

I concede that Lexus is not selling as highly as it was hoped to do, but here is a reason why those expectations were so high: Lexus cars sold as Toyotas before the brand launch:

http://www.asiaweek.com/asiaweek/96/1101/cs1.html (1996)

Quote:
Japan is Lexus country. The Toyota division sold 38,647 units of the Celsior (known elsewhere as the LS400) and 23,469 Windoms (the ES300) in its home market last year. In all, Japanese bought two Lexus cars for every one Mercedes or BMW in 1995. Price is a factor: locally manufactured Lexus cars are not subject to duties. The Celsior sells for $58,900, 44% lower than the price of a Mercedes S320 and 21% cheaper than a BMW 540i. "But we also win high marks for style, performance and dealer service," says Ted Kitagawa of Toyota Motors Corp. in Tokyo.
See, before the Lexus launch, looking at the Lexus/rebadged cars shows a different picture.

Generalizing to Lexus worldwide is inaccurate based on Lexus Japan sales, because the Japanese market intrinsically has very different factors working in it. Imagine if GM controlled over 50% of the US domestic market, and had very expensive luxury cars in a single, cohesive brand lineup. And then imagine that they decided to split their brand and launch a second luxury channel, raising the prices of those already expensive cars. And imagine if their design philosophy was adjusting at the same time.

"Cachet" has something to do with it, but so does History. And Market Positioning. Articles like this are fodder for Europhiles and others who would say, "look, Lexus' home country rejects the product--see that's the truth about those fake cars." But this ignores the history of the Lexus brand/vehicles in Japan. And it ignores Toyota's dominance of the Japanese market. Thus I would suggest that the article does not provide a complete picture.

Finally, there is the factor of Lexus' spectacular US launch which provides an impossibly high benchmark for any company to match. IMO, the Lexus Japan sales situation will be a slow growth area.
__________________
encore888 is offline   Reply With Quote
Old 11-15-06, 03:14 PM   #10
RA40
Moderator
Trader Score: (6)
 
RA40's Avatar
 
Join Date: May 2003
Location: California
Posts: 15,673
Default

Going back through Toyota history, wasn't Lexus to identify them as a high line product for the US Market?

They take the same car, put different badges on it and think that the local Japanese want to buy a car that they already had...which now takes influence from abroad? That doesn't cater to the JDM market who believed in the homeland product exclusiveness.

I'm sure it will catch, may just take time for them to adjust. The kiddies no problem, I think the mature crowd who's identification of with the product is different.
__________________

Mike
RA40 is offline   Reply With Quote
Old 11-15-06, 04:14 PM   #11
Och
Lexus Fanatic
Trader Score: (3)
 
Och's Avatar
 
Join Date: Feb 2003
Location: NY
Posts: 10,688
Send a message via AIM to Och
Default

I think the biggest problem for Lexus is that their quality has dropped down. The new IS, GS, and ES have terrible, flimzy interior, nothing like their predecessors. The LS isn't as bad, but it could certainly use more attention to detail and heavier doors.
Och is online now   Reply With Quote
Old 11-15-06, 04:57 PM   #12
spwolf
Lexus Fanatic
Trader Score: (0)
 
Join Date: Jan 2005
Posts: 15,992
Default

Quote:
Originally Posted by Och View Post
I think the biggest problem for Lexus is that their quality has dropped down. The new IS, GS, and ES have terrible, flimzy interior, nothing like their predecessors. The LS isn't as bad, but it could certainly use more attention to detail and heavier doors.
yikes. really? lol.

thats really first that i heard of that - thanks for letting us know.
__________________
- 07 Lexus GS350 AWD
spwolf is offline   Reply With Quote
Old 11-15-06, 04:58 PM   #13
spwolf
Lexus Fanatic
Trader Score: (0)
 
Join Date: Jan 2005
Posts: 15,992
Default

Quote:
Originally Posted by enigma888 View Post
The Lexus critics come out in full force for this one--another LA Times piece but this time, a bit more balanced. The 12,000 advance LS 460 sales is way past expectations.

I concede that Lexus is not selling as highly as it was hoped to do, but here is a reason why those expectations were so high: Lexus cars sold as Toyotas before the brand launch:

http://www.asiaweek.com/asiaweek/96/1101/cs1.html (1996)



See, before the Lexus launch, looking at the Lexus/rebadged cars shows a different picture.

Generalizing to Lexus worldwide is inaccurate based on Lexus Japan sales, because the Japanese market intrinsically has very different factors working in it. Imagine if GM controlled over 50% of the US domestic market, and had very expensive luxury cars in a single, cohesive brand lineup. And then imagine that they decided to split their brand and launch a second luxury channel, raising the prices of those already expensive cars. And imagine if their design philosophy was adjusting at the same time.

"Cachet" has something to do with it, but so does History. And Market Positioning. Articles like this are fodder for Europhiles and others who would say, "look, Lexus' home country rejects the product--see that's the truth about those fake cars." But this ignores the history of the Lexus brand/vehicles in Japan. And it ignores Toyota's dominance of the Japanese market. Thus I would suggest that the article does not provide a complete picture.

Finally, there is the factor of Lexus' spectacular US launch which provides an impossibly high benchmark for any company to match. IMO, the Lexus Japan sales situation will be a slow growth area.
Yeah, people factor out other luxury Toyota's sold in Japan.
Lexus lineup is only 1/4th of the lineup from US.

Only Crown series sell better than complete BMW in Japan. Mark X sells twice as much.
__________________
- 07 Lexus GS350 AWD
spwolf is offline   Reply With Quote
Old 11-15-06, 05:33 PM   #14
Max707
Lexus Test Driver
Trader Score: (0)
 
Join Date: Aug 2006
Location: Texas
Posts: 1,092
Default

Quote:
Originally Posted by Och View Post
I think the biggest problem for Lexus is that their quality has dropped down. The new IS, GS, and ES have terrible, flimzy interior, nothing like their predecessors. The LS isn't as bad, but it could certainly use more attention to detail and heavier doors.

Damn, I'm glad I own a SC430
__________________
LX, OME suspension, Slee diff drop with 2 inch lift, Slee step rock sliders
2014 ES350
Max707 is offline   Reply With Quote
Old 11-15-06, 05:50 PM   #15
Och
Lexus Fanatic
Trader Score: (3)
 
Och's Avatar
 
Join Date: Feb 2003
Location: NY
Posts: 10,688
Send a message via AIM to Och
Default

Quote:
Originally Posted by Max707 View Post
Damn, I'm glad I own a SC430
SC430 is amazing. The new generation Lexii took a dump in comparison to old gens.
Och is online now   Reply With Quote
Old 11-15-06, 05:50 PM
 
 
 
 
Reply

Tags
2005, euroline, japan, lexus, mazdaspeed, miata, unsuccess, work

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Forum Jump

All times are GMT -7. The time now is 08:06 PM.

Join ClubLexus
Advertising


Copyright © 2000-2008 Internet Brands, Inc. All Rights Reserved
Privacy Policy | Disclaimer | Terms of Use | JOBS


Get all contact info