Lexus has the IS and ES for the entry lux market. ES is "luxury" with no sporty performance whatsoever. It manages to be a huge seller in spite of, or perhaps even because of, its FWD drivetrain. Cushy, reasonably large, and well equipped, it's at a pricepoint where it appeals to many seeking a "luxury car."

The IS is "sporty" with some "luxury." It hasn't been a particularly hot seller in the past, but it's bound to do much better with the redesign.

So it seems that Lexus's two model strategy for the entry lux market works well. I guess it wouldn't make as much sense to do it for the LS-sized class, as at that price point, the cost of developing two concurrent models would probably not be as profitable. Besides, at that size, while sporty handling could certainly be much better than with the current LS, it wouldn't approach a Corvette's by any means.

My question is why not do that for the midsize market as well? There should be enough buyers at the price point to sustain two models, one more luxurious and one more sporty model. One problem I see is the ES is the same size as the GS already but about $10-20k cheaper. What if Lexus scrapped the ES as it is now and instead introduced a car tuned for luxury, sized and priced in the entry lux compact car market, as well as a car tuned for luxury and sized and priced in the midsize lux market? That way the GS wouldn't have to be compromised as it is now, trying to appeal to both the sport and luxury ride market at the same time.

Does this make sense? Or will y'all slap me around for the proposal much like y'all did after I suggested a "Lexus RAV4"?

BTW, I realize that the current strategy is working quite well for Lexus as it is. A mid-size luxury car priced at an entry lux price would be a hot seller for many car marques (in the US) and is a brilliant strategy. It also seems to be working well for Acura, Infiniti, and Cadillac, although they've played up the sport aspect more and they're also working on one-model strategies.

 

[QUOTE= What if Lexus scrapped the ES as it is now and instead introduced a car tuned for luxury, sized and priced in the entry lux compact car market, as well as a car tuned for luxury and sized and priced in the midsize lux market? .[/QUOTE]






I'm not sure what you're getting at. That is exactly what the ES is now....exactly what you decribe....the entry-level straight-luxury car.

The ES is also, as you point out, a top seller and a real money-maker for Lexus. The FWD layout appeals to those in foul-weather climates. If Lexus scrapped it and replaced it with a new entry-level luxury car, AND, as you suggest, introduce a slightly larger straight luxury car the size of the GS, not only would that leave Lexus with three models battling for the non-sporty customers (including the LS), but to a large extent it would be robbing Peter to pay Paul. The sales of the new mid-size luxury car would come primarily from former ES owners trading up, not from other nameplates....so instead of having one car that sells like hotcakes and really making money, Lexus would have two cars fighting for more or less the the same customer base and neither one of them really bringing in the bacon.

So.....in a nutshell, part of what you say is correct. It would give customers more choice and probably let the engineers redesign the GS into somewhat more of a sports sedan, but IMO from a marketing standpoint it would not be a good idea at all.

The company.............engineers, planners, marketers, managers, everyone........also has to keep at least one eye on gas and oil prices. This is going to become (and is already becoming ) a serious matter. You cannot just dump billions of dollars into new vehicles and platforms without taking things like this into consideration. The prospect of $3-4 a gallon fuel IMO is not going to bode well for either luxury cars or sport sedans with powerful V8's.

 

When I think Lexus 2 model strategy, this is what comes to mind...

Entry Level
ES
IS

Upper Level
LS (the head honcho)
GS (for people who still want something really luxurious, but want something a little more sporty than the LS)

Large SUV
LX
GX

Smaller SUV
RX (ok, so that's one, but the RX dominates, so they don't need 2 to sell here)

as for the SC, it wouldn't make sense to develop something in the same league, but I believe there will be an IS coupe/convertible (is that confirmed?), which would make it a cheaper counterpart the to SC in essence

 

The SC is a luxury cruiser & a hardtop convertible. I think they should also have something like a 2 door, 4 passenger(with real rearseats) coupe version of the next LS in the future & a real performance sports car like the LF-C.

 

Sounds like the current status quo, Dav.

An interesting question is whether Lexus should, even with higher gas prices, develop a low-volume V12 or large-V8 mega-luxury car that would be a Japanese competitior to the Mercedes S600, BMW 760iL, and VW Phaeton V12 luxury cars. It would have to be low-volume because feeding a V12 at $4 a gallon is not a prospect for your everyday customer.

I myself, BTW, am undecided where I stand on this prospect. It is hard to beat the current LS430 as a luxury car.....and I'm not sure if a low-volume ultra-luxury car for those few who can afford to buy it AND run it is a good idea or not right now.

 

A low-volume ultra-lux car is by definition a prestige, money-no-object car, & gas prices will not deter the buyers looking for these cars as long as Lexus makes it attractive & desirable. The new Bentley coupe is selling really well & it cost $150K+, so there's a market for these cars, & Lexus can make a comparable one at a lower price. Having these ultra-luxury models does improve the image of a luxury brand(for most high-end luxury car buyers,maybe not you as you have dicussed many times), which is important to a luxury nameplate.

 

I think it would be cool to have 2 different mid level luxo cars one focusing on Luxo nad the other on sport. However as most pointed out already, it wouldnt make much sense. They would be battling for the same comsumers. The entry level I think is perfect for the 2 model strategy. With the entry level, you bring in a lot of new owners into the company. Heck now a days many high schoolers are purchasing 30K cars. Usually they would lean towards sport and purchase something like the IS. But with the folks who dont want something so hard edged you have the ES. They are covering more bases without forgetting about previous owners. And personally I think Lexus is the only company that can pull off a 2 car entry level luxo car. Dont forget that many people in this price range that are looking for sport also heavily modify there cars which can also count as an entirely new group too rather than those just looking for a sporty car. The new IS will have over 300hp and you have cars like the M3, S4, C55, CTSv, and others. Now after these two demographics have grown out of the entry level stage they can move on up the latter to the more expensive cars.

The ES has just about the same interior room as the GS and will probably only get bigger with the next gen redesign. So you can kinda look at the ES as a competitor to the GS already(obviouisly not a true competitor, but as far as size and certain features then yes. I'm pretty sure people have cross shopped a ES330 with a GS300).

I think modern technology is an efficient means to make the higher end cars sportier or more luxurious without adding new models which in turn will lower developing cost(something that Lexus is known for is low development and building cost). With the use of AVS on the ES and GS and sport suspension options on the LS, there is no need for an entirely new model at the higher end just to please those who want more sport. I have never tested the AVS system on the Lexus models, I however tested them on the Volvo S60R/V70R models and the difference is literally night and day. From floaty smooth to race car stiff in the matter of milliseconds. How can you beat that?? Not to mention the in the works Performance division for Lexus.

Just listing a few things to think about that popped into my head while typing. I hope I made some sort of sense.

EDIT: Oh my goodness, plus they have the Avalon which some consider to be an entry level luxo car.

 

I still think that they should release a Soarer/SC with a new JZ twin turbo motor

mmm... 3.5L twin turbo straight 6 pushing 450hp outta the box

 

I guess I was kinda unclear. Okay, here's what I'm trying to say.

Entry, midsize, and high end luxury market cars tend to be of a certain price point and size. As you move from entry to high end, you tend to get more cool features, pay $15-20k more, get larger and more powerful engines, and get larger cars. Some, like the ES, cross boundaries. It's sized as midsize but priced as entry. So what I was hypothesizing about would be two models, luxury or sport, that "played by the rules," so to speak, in each class. 178" $30-45k IS luxury and IS sport models, 190" $45-65k GS luxury and sport models, and $65-120k LS luxury and sport models (well, maybe not for the high end market). I realize that for many cars, you can get standard/base or sport package options, and some have luxury option packages, but engineering from the ground up two entirely differently focused models allows you to not make any compromises at all.

If this strategy were cost effective, Toyota would probably have already implemented it, but I just thought it was an interesting strategy to consider. Maybe when I start my own luxury brand...

 

i think lexus' approach of having two different cars for entry level luxury is just brilliant. some other brands they try to put up one car and bam says it's the best entry level luxury sedans of all..... imho, yes for the money it seems like you get both, but to be honest, i think that's just in the middle of no where......

it's not really comfortable luxury, coz' it has stiffer suspension, louder engine.... it's not sporty neither, sometimes lack of rwd, not as stiff suspensions by comparisons, not stiff chassis, etc...

so make up your mind and get what you want, and that's lexus philosophy too. perfect. you want a family car, get the es. you want some spirited driving, get the is. easy call

 

I wonder whether Lexus' goal is to expand market share in this price segment, and hence approach it with 2 models to cater to a wider set of customers, vs. focusing on one model as it did previously (the ES 300 'sport sedan'). Was there an inherent limit to continued marketing of a single model? Was adding more 'sport' to the ES too dangerous?

Lexus clearly is wanting mroe IS sales than before, but are they aiming to dominate ('crush') the segment vs. MB, BMW, etc. or simply increase the number of Lexus owners in general, in hopes they will reliably trade up to bigger Lexus models in the future?

The thing that makes me wonder about this is how no other luxury car maker seems to be doing this 'two-pronged' attack...or maybe I just can't think of it too well... the C-class is one car only...the 3-series...also the same general family....

I just hope that with the IS' increased sexiness as a result of its enhanced sportiness will not rob the ES of some cachet due to a perceived 'lack of sportiness'...the ES needs to have it where it counts, whatever that means (to the target customer).

 

One reason the ES currently sells so well is that it is NOT " sporty ". It has the smooth, floaty ride, low noise level, rich interior, and general level of refinement that a LOT of people want...and the Avalon or top-line Camry XLE just doesn't cut it for them. In fact, there are only few other cars that have the ES 's ride at ANY cost, including big brother LS.
No.....if Lexus tried to make a sport sedan out of the ES they would ruin the car. Leave those customers to the IS.

 

Infiniti and Acura both had two entry level cars, G and I for Infiniti, TL and (I'm blanking on the other one). Did away with it, though. MB sorta does, but not as two entirely separate models. C-class comes in C230k (sport) and C240 (luxury) for lower engine models and C320 Sport and Luxury for higher engine models. I'm not sure if calling them different models actually is any different from just offering a sport or premium package like BMW does in its 3-series, though.

The ES doesn't tend to compete against most of the other luxury brands' offerings, so I'd say it's not to "crush" the competition but to increase sales and also get people to trade up to an LS (or RX, or whatever) later.

 

No...Infiniti did not sell both of these cars at once. They dropped the I35 (a redone Maxima) when the G35 was introduced.

 

to me the IS is very important to lexus because it goes head to head with the bmw 3, which has a very very important status in the industry, a lot of people buy that car. and also, the IS bring lexus younger people, which they need desperately imho. the avg age of toyota and lexus owners are getting too old, that's not good, they need young people to buy their cars, and the only way to appeal that is get something that those people want.

making the ES for them will hardly work