Daily Slideshow: Lexus Testing Avenues in Which to Beat German Luxury Brands

Market

At the Detroit Auto Show last month Lexus and Infiniti unveiled visually stunning new concept cars. They also took the opportunity to outline strategies for carving more of the luxury market away from their German and Silicon Valley competition. The Detroit show efforts come on the heels of disappointing sales in 2017 for premium Japanese auto brands, with Lexus experiencing a 7.6 percent decrease in U.S. sales and Acura's dropping 3.9 percent. However, Infiniti's sales, fueled by their sport utility vehicles outselling their cars nearly two to one, were up by 11.3 percent. At 153,415 vehicles for 2017 though, they lagged behind Lexus, Acura, Cadillac, and the top German luxury brands.

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Trending

Once upon a time, Lexus, Infiniti, and Acura were the new brands taking market share away from established European and American brands. But now Tesla is the new kid on the block. Last year Tesla delivered 103,000 vehicles, making it their best year on record. And though those sales amount to only a small part of the luxury market, they also report having 400,000 pre-orders for their new Model 3 sedan. The Model 3 is their newest and most affordable car yet. But teething problems have caused production delays and Tesla is just now starting to fill those orders.

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Limitless

Perhaps Lexus has taken note of Infiniti's SUV sales breakdowns and Tesla's sleek styling. The LF-1 Limitless concept SUV model Lexus showed in Detroit seemed to be addressing both areas. The LF-1 features a semi-autonomous hands-off driver aid Lexus calls "Chauffeur Mode" that looks to compete with a similar system from Tesla. It is also equipped with navigation technology that predicts where the driver is headed based on past driving habits and uses that data to suggest concierge-type services. The fact that the LF-1 is a crossover is not insignificant. Lexus reminds us in their press release for the LF-1: "Lexus established the luxury crossover segment two decades ago with the global debut of the RX 300 at Detroit. It remains the top-selling luxury crossover despite nearly 50 competitors that have since entered the segment."

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Emotion

Indeed, even though Lexus is coming off a slump in sales last year, the brand still has a healthy share of the luxury market. It ranks in the top four with Mercedes-Benz, BMW, and Audi. Cooper Ericksen, vice president of U.S. marketing for Lexus, spoke about their future image aspirations: "We don't want to be the 'race car' brand; we don't want to be the 'quiet ride' brand. We want to be the brand which is emotionally connected with the customer." It's not clear how hands-free driving establishes an emotional connection, but timeless styling has been known to develop loyalty over time. The LF-1 shows that Lexus is still betting on the controversial spindle grille to win buyers over.

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Evolution

Infiniti is betting on styling as well, as their stunning Q Inspiration Concept sedan showed. The Q Inspiration is powered by a radical new engine design that varies compression ratio and stroke length via a levered three-piece connecting rod system that pivots on the crankshaft. It essentially offers additional displacement on demand. The development of the powerplant took Infiniti 20 years. However, the future of the new engine called the VC-T for Variable Compression Turbo is uncertain. Infiniti chief executive Hiroto Saikawa announced in Detroit that all the automaker's models introduced from 2021 would feature either "e-Power" hybrid or fully electric motors. For his part, Infiniti's executive design director Karim Habib said: "We don't look at Tesla and try to do the same idea of luxury, but there has been a natural evolution of luxury." He is indicating that while the brand may not be looking at Tesla for inspiration, they know who their competition is. The news in 2018 seems to be that, as ever, competition has a way of fostering change.

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