GS69

http://www.autonews.com/article/20170326/OEM03/303279980/can-this-man-finally-deliver-lexus-envy

Can this man finally deliver 'Lexus envy'?

Toyota's luxury line turns to yachts, skyjets and coupes to catch up to Germans

March 26, 2017 @ 12:01 am

Hans Greimel

31

Shares

The sexy LC offers clues to a more glamorous Lexus.Send us a Letter

Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

TOKYO -- Lexus has the quality, customer service and technology. But it still lacks that one thing its German luxury competitors have: cadres of ogling wannabes who are jealous of the driver.

As Toyota's new chief branding officer, Tokuo Fukuichi is charged with sharpening Lexus' image as a lifestyle brand.

"When you're stuck in traffic, people look at the driver in the Mercedes as a person who has made it in society, and they will envy you," concedes outgoing Lexus International President Tokuo Fukuichi. "We haven't fully achieved that compared with the German 3."

Call it "Lexus envy." Lexus now wants to finally possess it with a new multipronged branding push to sharpen its image as a lifestyle brand and further distance it from mass-market Toyota.

The campaign starts with a newly appointed chief branding officer -- Fukuichi himself.

Fukuichi will step down as president of Lexus International Co. on April 1 and take the newly created position of chief branding officer at Toyota Motor Corp. for Lexus and Toyota brands. Yoshihiro Sawa, Lexus executive vice president, will succeed him as global Lexus boss.

In his new role, Fukuichi wants to light up the Lexus identity.

The Tokyo media launch of the new Lexus LC gave clues to a more glamorous Lexus on the way. The sexy racer sits atop the lineup as beautiful eye candy with the street cred to match. It will sell for ¥13 million (about $115,650 at current exchange rates) in Japan and $92,995 including shipping, in the U.S., which should help burnish a premium brand that has lacked a halo car since LFA production ended in 2012.

The sleek Lexus Sport Yacht

Also on display was the sleek and bronze Lexus Sport Yacht, a high-end design exercise unveiled in January in Miami that screams privilege and exclusivity. The carbon-fiber vessel harnesses the power of twin 5.0-liter V-8 engines, based on the 2UR-GSE performance engine of the Lexus RC F coupe.

So was a mock-up of the single-seat white-and-blue Skyjet -- the Lexus-branded spaceship prop that will be featured in the upcoming science fiction movie Valerian and the City of a Thousand Planets. The film is set 700 years in the future -- a big-screen testimony to Lexus' wager on its long-lasting luxury legacy. Clearly visible on the movie prop is Lexus' trademark spindle grille and logo.

Even the media event itself evidenced a grander Lexus branding. The reveal was a rare glitz fest for Japan's auto industry, with techno music, mood lighting and waiters serving finger foods -- a departure from the more businesslike tradition of drab PowerPoint programs.

The ever-spritely Fukuichi, 65, was decked out in a loud pink polka-dot tie and a shirt with a black-and-white tablecloth-patterned collar.

Toyota President Akio Toyoda has given Fukuichi latitude to tackle any issue related to branding in his new role, from product planning and technology to marketing and advertising.

The price of premiumLexus U.S. transaction prices rose in February from a year earlier, but lag luxury competitors.Feb. 2017/Feb. 2016% changeLexus$48,274/$47,6311.40%Audi$51,973/$49,3785.30%BMW$53,316/$54,0091.30%Mercedes$55,614/$56,725–2.0%Cadillac$58,486/$57,5181.70%Overall industry2.50%Source: Kelley Blue Book

The branded Skyjet movie prop

"I'm able to do whatever I want," said Fukuichi, who will continue in the additional role of the automaker's head of advanced design.

He now will be the final arbiter of outward image for all things Lexus and Toyota.

He says it is crucial that Lexus escape the perception of being just Toyota-Plus, bemoaning people who buy aftermarket Lexus grilles to slap on their downmarket Toyotas.

The problem was partly self-inflicted, he says, with platform sharing and thinly disguised rebadging between the brands, such as the Lexus HS and Toyota Sai hybrid siblings. Lexus has traditionally been the entry point for pricey new technology that then trickles down into Toyota.

That all blurs the brands and makes Lexus less coveted.

"Let's clearly define Lexus and wait and decide that some things can only be Lexus and not applied to Toyota," Fukuichi said. "I would like to clarify that sort of distinction."

Lexus' relentless pursuit of the Germans has been hard-fought and fitful.

"Lexus' strengths such as quality and service can't be fully appreciated unless you're in the car driving. Better quality isn't that necessary. Better brand power is."

Tokuo Fukuichi

In the U.S., the younger Japanese challenger was long the luxury-segment sales leader. But more recently, Mercedes-Benz and BMW have dueled each other for that distinction. Their U.S. sales were up through February, while Lexus volume tumbled 23 percent in the 1st 2 months to land Lexus in a distant 3rd place.

On the global stage, Lexus fares even worse against its storied German competitors.

"The main thing the German brands have going for them is history and a long stream of good models," says Chris Richter, an auto analyst at CLSA Asia-Pacific Markets.

While Lexus routinely tops the charts for durability and customer satisfaction, it still fetches much lower transaction prices than the Germans, according to Kelley Blue Book.

In a Kelley Blue Book shopper survey of perceived luxury, Lexus outscored BMW and Audi and was ranked alongside Aston Martin and Porsche. But it still trailed Mercedes.

"Lexus' strengths such as quality and service can't be fully appreciated unless you're in the car driving," Fukuichi said. "Better quality isn't that necessary. Better brand power is."

As a design guy, Fukuichi fully appreciates the power of presentation.

It is part of a corporate vision that sees Lexus eventually wielding a kind of snob factor on a par with the Germans.

"After you purchase a Lexus, your whole lifestyle changes. The people you meet and circulate with change," he said. "That means with just 1 car, your total life image will change."

You can reach Hans Greimel at hgreimel@crain.com -- Follow Hans on Twitter: @hansgreimel

Toys4RJill

Good article about where Lexus is trying to go and what their ambitions are. In my past posts I have always said that Lexus is going after a higher priced clientele than they currently have right now. This new LC is the first step in charging more money for their brand and the next step will be the pricing for the LS500. After the LS we should see the ES move their top end MSRP higher to better reflect what the competition is doing. It is also interesting to note that the Cadillac average transaction price is significantly higher than Lexus. As for moving life style branding ambitions, that is a good thing for Lexus that they are going to go after this, BMW, Mercedes, Porsche are very good a portraying a lifestyle, it time for Lexus to do this as well. I think it is a very exciting time for Lexus, I think we are going to see a very good transition of what Lexus is now and where it is going.

RNM GS3

We heard this old song for many years.
It doesnt help when they put spindle grille on a Camry that sells 300k units per year!

I hope new LS and LC sell well and then Lexus can put the $$$ needed for R&D to bring more engines, platforms and models.

ttsport15

tell me about it every cab in NYC is a Camry ....Twin turbo would be nice on the iS

SilvrBulet

I like the naturally aspirated V6 but they need to crank up the ponies with a new engine. The IS350 has been using that same engine since 2006.

bitkahuna

iTrader: (20)

lol at spindle grill on the skyjet.

but branding is definitely important. this guy has got his work cut out. lexus has also been trying to get younger buyers, so going after younger buyers and higher $ buyers seems challenging without broadening the model line-up quite a bit. hope it happens!

G Star

iTrader: (2)

Its not like Lexus isn't serious though.

Replacing Mercedes as the official New York Fashion Week sponsor helps.

I also hope they can begin to bring more line ups, its a little limited. How does BMW/MB make so many models and remain comfortably profitable but Lexus can't make it work?

Sulu

The German brands do it by sharing platforms: Design a platform then build as many different models off that platform as humanly possible. Audi / Bentley / Porsche (VW) is the king of platform sharing. Lexus could do it also but they may not want to. Building so many niche models may be diluting the brand. Keep it more exclusive and more aspirational.

My0gr81

Every Lexus model is platform shared. Either with a JDM derivative or a NA Toyota model. Even IS and GS have the monocoque in common. LFA was the only exclusive design.

Sulu

Agreed, so there is no doubt that Lexus could do it also. Platform sharing has become a necessity due to the very high up-front, design styling and engineering costs.

But Toyota and Lexus are not trying to build models to fill every little niche, unlike what BMW and Mercedes-Benz are doing with their thousand-and-one utility / activity vehicle models. I believe that building so many niche models dilutes the brand. Mercedes-Benz was, at one time, a truly aspirational brand because they were rather exclusive cars; but now, there seem to be MB models for just about everybody and anybody.

situman

I've always said platform sharing is the issue and apparently Lexus acknowledges that. Acura and Infiniti has the same issue and perception, just Lexus better markets their cars. The LX would have been a much better seller if it was on its own platform. As great as the LC is, it is still under the Toyota badge regardless of price. Also, many of its parts says Toyota on it and that needs to go away as well. Maybe Toyota should spin off Lexus as its own stand alone brand and entity instead of being under the Toyota umbrella. I believe even the GA-L is based on the TNGA platform with more exotic materials.

Solara350

i love spindle grill !

Cole2is

Throw some 3 piece wheels and lower that space jet and it would look cleeeannnn