By on May 23, 2008

The fastest way to kill an automotive brand: sell a POS. The bloodletting caused by a brand new clunker can be spectacular. Anyone remember the 1981 Cadillac Fleetwood V-8-6-4? How about the Cimarron? It has taken Caddy more than 20 years to climb back from that double debacle if, indeed, they have. But there’s another, slower and more insidious way to ruin a storied car brand: distraction. When a carmaker builds a vehicle that muddies the marque’s core message, it mortgages its future. To wit, the Lexus LF-A.

Of course, the Porsche Cayenne used to personify the problem– before the sports car maker released its SUV. Once the Cayenne smashed sales records, purists’ caviling quieted. How can you argue with success? Never mind the long-term effects on branding. Never mind that Porsche’s using the money to buy VW. The market has spoken. Which reminds me of the old punch line, “We’re just arguing over price.”

Talk to me in ten years, when the bloom is off the rose. Meanwhile, building a car that’s a genre too far is one thing. Offering a product that completely betrays your brand values is another. I don’t need to resurrect my arguments against the so-not-a-luxury-car Lexus IS-F. Actually, I do. The new LF-A supercar takes the exact same mistake made by the IS-F to the next level, combing brand betrayal with yet another cardinal sin for automotive brand managers: the halo car.

Like anything else, there are halo cars and there are halo cars. There’s the deeply misguided (I don’t have the money to buy a Nissan GT-R so I guess I’ll buy a Maxima instead) and the just plain dumb (who the Hell can afford THAT?). The best way to separate the wheat from the carbon fiber titanium-covered chaff (needed at those speeds): the price difference between the halo car and the next model down. Discounting aesthetic, genre and brand focus differences, the larger the price gap, the more ill-fated the endeavor. 

The Lexus LF-A will sticker for a cool $225k. The next model down, the LS600h hybrid sedan, costs $104,900. The $120,100 price gap elevates the LF-A from desirable range topper to WTFer– and dooms it to failure.

Just ask Daimler, whose slated-for-execution Mercedes McLaren SLR AMG supercar was a major flop at $495k (not including discount). Or Porsche, whose $440k Carrera GT ceased production 230 cars shy of its stated sales target. And these are brands with heritage, whose prestige and racing history makes their stratospherically-priced products inherently collectible.

The counter-argument is entirely emotional. Supposedly, all halo cars cast an unquantifiable glow over the brand’s more prosaic products. The LF-A will drop-kick Lexus’ stodgy image, making all Lexi more appealing. If I was a Lexus stockholder, I’d be uncomfortable with any multi-million dollar investment based on psycho-babble. If I was a brand manager, I’d want statistical proof that Lexus’ image is somehow lacking amongst owners or intenders, and that a supercar would rectify this theoretical problem.

Toyota is a wealthy company. They can afford to make mistakes like the LF-A without losing any metaphorical sleep. But it is a particular KIND of blunder, one that reveals a dangerous new turn in ToMoCo’s corporate attitude.

Speaking of baseless psychological speculation, I believe that building and selling a supercar is a bold statement of corporate health and vitality. Can you imagine Ford releasing its $140k GT now? A halo/supercar says to the world, look at us! THIS is what we can do! (Or never mind the Focus, THIS is what we can do!) But there’s a fine line between being bold and hubris, and hubris and stupidity.

This is why Toyota has cultivated a corporate culture based on paranoia. Fear keeps you focused. You never, ever forget the downsides of any of your potential actions. You always look for the safest option– especially when you’re doing something dangerous. Traditionally, the Toyota Way follows Sun Tzu’s dictate: never to fight a battle unless you know you’re going to win. It’s not for nothing the first Lexus looked like a Mercedes E-Class.

The new Tundra’s sales targets represented a huge miscalculation by the Japanese automaker’s product planners that will cost Toyota billions. And now, the LF-A boldly goes where Toyota has never gone before, both in terms of money and image. Why? For what are they trying to compensate? Lexus would have been far better off transforming their dopey SC into a credible Mercedes SL challenger. Or continuing to refine what they already have. Or just sending their loyal customers a nice “thank you” service voucher. 

I know TTAC’s Best and Brightest welcome automotive excellence in all its forms. But sometimes excellence is boring, and comes from slow, steady progress. It’s a lesson Toyota taught the world. The LF-A is another step towards unlearning it.

Get the latest TTAC e-Newsletter!

72 Comments on “The Lexus LF-A is a Mistake...”


  • avatar

    A agree with you completely – Lexus have really missed a trick, all they had to do was create an alternative to the Mercedes SL priced a little cheaper and not make it too obviously high tech and they’d have a car that would shift in large numbers.

  • avatar
    jrlombard

    As a practicing marketer and a student of branding, I found this article spot on. Ever since the launch of the IS300, Lexus has somehow had this ongoing urge to out-handle BMW and “out-luxury” Mercedes (at the same time).

    The would do well to forget about ends of the bell-curve for these brands and focus on doing what they do best.

  • avatar
    Brendan

    Lexus is out to lunch on this one. They sell RX’s and IS’s by the boatload, but they have big misses too. I hardly ever see GSs or SCs. Those are two products the should have been improved before anybody talked about a halo car.

    And if you want to make an actual sports car, just make a new Supra. Please. Seriously. We don’t need a V8, just bring back the I6 and crank it up to 11(K RPM). Thank you.

  • avatar
    Bunter1

    I think this will depend on what the car actually delivers. (yes, I think an SL fighter and replacing the SC are good thoughts.)

    Many, including myself, used similar arguements when Toyota birthed Lexus. Clearly we were wrong.

    If it comes off as a very expensive Porsche it will fail. If it proves to be a worthy (performance and luxury wise), reliable alternative to a 599 or 612 at better price then it way prove to be brilliant.
    The original LS vs S-class was essentially this in the eyes of the typical customer IMO, value vs. prestige. No demographic group is uniform, I have little doubt that in the 200-400k market there are plenty who will consider a more reliable/high value alternative. If the performance is there.

    If that happens the prestige matter will settle itself.

    Thoughts,

    Bunter

  • avatar
    Steve_S

    The problem with the LS-F isn’t the car itself, its Lexus asking $225k bones for it. The hybrid at over 100k is not a good idea either. If this was $110k undercutting the R8 maybe a case could be made for it.

    As it stands now? Fail.

  • avatar
    Robert Schwartz

    It can only damage Lexus brand if somebody buys one, which seems quite unlikely.

    People actually bought Cimarrons.

  • avatar
    Stephan Wilkinson

    Actually, the first Lexus–LS400–was a dead ringer for an E-Class. That was the competition, not the S.

  • avatar

    Stephan Wilkinson :

    Actually, the first Lexus–LS400–was a dead ringer for an E-Class. That was the competition, not the S.

    D’oh! Text amended.

  • avatar
    seoultrain

    Steve is totally right. It doesn’t matter how good this car is. A $225k Lexus supercar will not sell. It’s a totally different market than the over-50 car buying crowd that Lexus is familiar with. This car will have to be a Zonda-killer to even have a chance.

  • avatar
    incitatus

    RF, did you drive this car? Did you even see one in real life?
    How come nobody blames ferrari for asking boat loads of money on their cars?, or lamborghinis or whatever.

    I know, you’ll tell me that ferraris have a tradition of asking lots of monies on their cars and therefore they are entitled to do that. Now thats some dumb reasoning.

    Let me tell you something. Lexus reinvented luxury car concept. It came a long way building a brand from nothing. They’ll do just fine with or without the LS-F. Their future does not depend on this car.

  • avatar
    sightline

    ust ask Daimler, whose slated-for-execution Mercedes McLaren SLR AMG supercar was a major flop at $495k (not including discount). Or Porsche, whose $440k Carrera GT ceased production 230 cars shy of its stated sales target.

    Let’s not forget the ultimate halo car failure, the Jaguar XJ220.

  • avatar
    Geotpf

    If a vehicle makes money, and it doesn’t cause sales of other vehicles in the same brand to drop (due to a loss of prestige), then it’s not a mistake. The Cayenne made money, and didn’t cause anybody to stop buying 911s, so it’s not a mistake. Same goes for the LS-F-it won’t lower sales of any of Lexus’s other models.

    In any case, as for a “brand prestige” hit, aiming too high can’t possibly be a problem-aiming too low (IE, the Cadillac Cimarron) can be, if it drags down the status of the brand (and therefore lowers sales of other models). The VW Phaeton was a failure because it didn’t sell (and it didn’t sell because they aimed too high for a VW badge), not because it hurt the rest of the VW brand.

    So, the only real question here is: Will the LS-F sell enough for Toyota to make money? I dunno, but Toyota doesn’t do loss leaders. If they did “halo cars”, we would have had a new Supra by now. So I imagine they expect to make money on this. In the end, that’s all that matters.

  • avatar
    danms6

    I love how Lexus can come out with a $225k supercar yet Toyota hasn’t managed a decent sports car since the MkIV Supra debuted in 1993. How can anyone take this car seriously when they haven’t had a sporty car in the US for ten years? That includes the IS-F as well. Eight-speed automatic, give me a break.

  • avatar
    romanjetfighter

    I say this is a right decision. The other route is to keep churning out boring cars that will only appeal to old people. We don’t want Lexus to become the next Buick!

  • avatar
    Steven Lang

    I am going to go out on a limb here…

    Lexus realizes that they are losing the folks who are vying for a sporty Infiniti or BMW. They want to at least bring attention to their brand… but the IS and SC have some ‘legacy’ issues that can’t easily be overcome.

    That’s the inspiration for creating a new model range in Lexus that appeals exclusively to sporty buyers. The LS-F is an audacious product in terms of it’s price, and likely a foolish one. But… we can’t really any pass sound judgment until it’s driven.

    If this car can cremate anything in it’s class, it will sell. The Acura NSX was twice as expensive as any other Acura when it was first released, and this model falls along the same pattern.

    If this car has genuine presence and can offer supercar performance along with Toyota reliability, it may actually do a lot of good for the Lexus brand. The hardcore auto aficionado may want a prancing horse, an AMG emblem, or some other European symbol on their hood. But many folks simply don’t want the headaches and haphazard reliability that those brands represent.

    It’s ironic, but it looks like 20 years later Lexus may find itself once again taking on the boys at Daimler. I think they can pull it off, but it may take a few years to gain traction.

  • avatar
    Geotpf

    Steve_S :
    May 23rd, 2008 at 12:35 pm

    The hybrid at over 100k is not a good idea either.

    Nope. It was an excellent idea.

    Again, IMHO, in the end, all that really matters is sales figures and profits, and the Lexus LS 600 h L has sold better than expectations (at one point, there was a 12-month back-order on it), despite the huge price tag (which, with options, can reach over $120k).

  • avatar
    Antone

    I agree. This is the wrong car for Lexus. But then again I am not a brand loyalist. I am a power-to-weight hp-per-liter driver-focused design loyalist. And the IS-F has it there (minus the cost!).

    RF: What brand currently passes your Zen filter? It seems even the most focused is diluted through SUV dreams…

  • avatar
    KatiePuckrik

    This seems like a huge folly on Lexus’ part, but let me run with a hypothesis:

    What if Lexus are merely testing the water to see how far they can go?

    IF the LS-F flops, then, who exactly will be put off Lexus? Future super car buyers? Big deal! It was a brand super car buyers would never consider, so nothing lost. People who buy IS’s, GS’s, RX’s etc, will carry on buying them because it was a car outside of their price bracket. Therefore, they won’t care. VW got ideas above their station with the Phaeton, but people didn’t care, they carried on buying Polos, Golfs, Jettas and Passats.

    Now if Lexus made a car on the IS range which was a heap of you-know-what, then it might be time to start up a Toyota deathwatch…..

  • avatar
    Pch101

    While the pricing of this LS-F seems out of line with reality, the concept of an F badge is similar to that of AMG or the M-model BMW’s. If those help Mercedes and BMW, I can’t see why a specialty badge hurts Lexus.

    I see the disagreement here as one of not understanding the intent of the brand message. I suspect that those who would oppose the badging think of Lexuses (is that Lexi?) as being stodgy, the Japanese equivalent of a Towncar or a de Ville.

    I won’t argue that they don’t feel like appliances, because they do. But that was never the goal. The Lexus brand is supposed to represent perfection, not cushiness. The goal of the brand is to promise a vehicle of impeccable build quality, superior to its rivals.

    That brand message does not preclude Lexus from selling sports models. If anything, the snub that Lexus gets from enthusiasts suggests that Lexus really needs to get some sports cars into their stable so that they can build some bragging rights with the gearheads who they have failed to convert.

    I look at it another way. Lexus clearly leads the pack in terms of reliability. If they can finally figure out how to beat the Germans on road feel, then BMW, Audi and Mercedes will be one huge step closer to the grave.

    Lexus’ focus thus far has been on American drivers. Europeans, and those who love their cars for their performance, are clearly their next target. They’re getting closer every time.

    Actually, the first Lexus–LS400–was a dead ringer for an E-Class. That was the competition, not the S.

    During the development of the original LS400, Toyota reviewed the breadth of competitors, and made the determination to benchmark both the S-class and 7-series.

  • avatar

    To those (many) of you who believe short-term marketplace success is the ultimate justification for anything you do with a brand, please pause for a minute to think of all those car brands currently lost in the wilderness for lack of focus, or have already shuffled off this mortal coil. At one time or another, they all experienced a sales surge. For those of you who see no harm in Lexus’ brand extension into Mercedes AMG territory (the world’s most prolific provider of $100k+ cars), please contemplate the fact that Mercedes is hiving-off AMG into a sub-brand. What do they know that you don’t? The tighter the brand, the stronger it is. Stretching a brand is like stretching any other material– the more you stretch it, the weaker it becomes. Lexus = reliable luxury. That’s what people like. Who said it isn’t enough? And one other thing: do not mistake your own opinions for those of Lexus’ customers. I don’t think they’d describe their cars as “boring.”

  • avatar
    yournamehere

    i think the 1st viper is what makes people/brands think they need a halo car. but like you stated. it was 120k more then the next model down. I would assume at the time a Stealth and a Viper were not TO far from each other.

  • avatar
    Pch101

    For those of you who see no harm in Lexus’ brand extension into Mercedes AMG territory (the world’s most prolific provider of $100k+ cars), please contemplate the fact that Mercedes is hiving-off AMG into a sub-brand. What do they know that you don’t?

    That tells me that they feel that they have enough AMG sales to morph it into something bigger. The Daimler guys might know better, but frankly, that sounds to me like a mistake. They’ve already flubbed Maybach; churning out more AMG vehicles will just reduce the cachet value that made AMG interesting in the first place.

    do not mistake your own opinions for those of Lexus’ customers. I don’t think they’d describe their cars as “boring.”

    It’s a matter of getting conquest buyers. Lexus sales are hitting a plateau. If they want to go to the next level and slaughter the Germans as they have the Americans, they need to add some cannon to the assault. In this case, cannon with good handling and better suspension tuning.

  • avatar
    Stephan Wilkinson

    pch101, they may have benchmarked the S Class, but the E class was its price and size competitor. (Of course they substantially undercut its price.) Remember that the early ’90s were the era of the enormous W140 S-Class, far more portly than the LS400. I remember testing one of the first LS400s in the country and photographing it next to an E-Class that happened to be at the Beaufort, SC B&B where I was staying.

  • avatar
    KatiePuckrik

    Mr Farago,

    A brand can have many facets as long as it delivers on all of them (Have we been here before?). Cadillac stood for luxury, but its cars said another story (bad interiors, anyone?). When you buy a Cadillac, you expect a car that’s a cut above, not a bag of bolts. THAT’S what damages brands.

    “Toyota” stands for reliablity and quality. Now if it could style its cars beautifully, then I’m sure it would grab more customers whilst enhancing its brand. Likewise, if they, then, added “good drivability” into the equation it wouldn’t do any harm.

    Be honest with yourself, if you could buy a car that:

    looked like an Alfa Romeo
    drove like a BMW
    and
    built like a Toyota

    wouldn’t you think twice……?

  • avatar
    SherbornSean

    I’m with RF on this one.

    Lexus has succeeded because they’ve gotten 2 things right. First, they figured out there was a market for a prestigious, comforting Mercedes that wouldn’t break down. Second, they anticipated the crossover trend, and nailed it with the RX.

    But trying to switch to a performance image is the wrong tack. Lexus sales may well have plateaued, but selling 300,000 copies at $40K+ each is not such a bad thing.

    Scion — on the other hand — is the brand that needs help.

  • avatar
    whatdoiknow1

    Robert,

    Me think that you are missing the point about branding or the lack of it today. In all honesty outside of Ferrari what (successful) automakers has remained true to their orginal mission over the last 50 years?
    I could be wrong but I cant really think of any.

    The nature of the automobile has changed so much over the last 30 years that it is all but impossible for any automaker to maintain a narrow focus on the marketplace. Quite simply Porsche DOES NEED the Cayenne to survive. The market for 911s and Boxsters will not sustain the profit that makes a venture like Porsche viable. No profit, why bother!

    Now I will say I came of “automotive age” during the 1980s were it did seem that every brand and company had a well defined image and products. But today I think many are forgetting why some brands of cars sold very well back than but not so today.
    If we were to go back to 1986 we would find that a Volvo 740 turbo or a SAAB 900/ 9000 was far more powerful and quicker/ faster than an BMW outside of a 535i. The 3 series was a 325e with all of 127hp! If you wanted real “euro” luxury Jaguar was your only choice, a Benz or BMW were rock solid cars but not very plush. Porsche could actually make affordable cars that managed to be competitive with and be superior to anything coming out of Japan or the USA.
    Today the landscape has changed drastically. We have 5000lbs sedans that can blow away just about any 44″ off the ground two-seater sportcar. We have SUVs that can pull over .85g. There are Minivans that will hit 60 in under 7 seconds.
    BMW can’t market a 4cyl car in the USA because of image. Porsche has been forced into becoming a boutique brand that sells a line of cars that are all vulnerable on the performance front. The list goes on and a branding focus that is too narrow will lead to failure.

    Since the Japanese have enter the auto market they have been playing the same game of slow and steady progress to gain world-wide market share and they have been quite successful. THEY DO INTEND on beating the Europeans and the Americans at this game and will continue to fire salvos at them. The LS-F like the GT-R is just the latest “play” in this game.

    Like it or not the wealth on this planet is shifting with more and more of it going to places outside Europe and America. Many folks around the world do actually welcome the opportunity to buy a car NOT produced by their former colonial masters.

  • avatar
    phil

    let’s say the new nissan GT sells for 100k; can this lexus be 125K BETTER than the nissan? regardless of brand concerns, this situation is similar to the porsche GT mistake, it just wasn’t worth the extra coin compared with a 911 turbo.

  • avatar
    brownie

    RF, I think you’re right, but wrong too. I don’t think the LS-F is inherently a mistake for Lexus any more than the NSX was a mistake for Acura, but I do believe we will look back and see this car as signaling Toyota’s peak. As in the beginning of the decline – perhaps in favor of Hyundai, perhaps in favor of a still-unknown Chinese company, but in favor of something.

    The “halo car” is quite possibly the stupidest concept in an industry filled with stupid concepts. If there is any single person anywhere in the world who wasn’t originally going to buy a Mustang, but ended up buying one because of the Ford GT, I will eat my Audi. Halo cars are about ego. Halo cars are about showing off. Halo cars are about car executives wanting their company to produce something they will actually want to drive for once, since they can’t very well show up to work in a Ferrari or Porsche.

    Toyota is on top of the automotive world because, over the past 20+ years, they have (usually) not done the stupid things that other car companies seem to do as a matter of policy. They (usually) don’t build more cars than people actually want to buy. They (almost) never let themselves get caught without a viable offering in a hot segment. And THEY DON’T BUILD HALO CARS.

    I actually think the LS-F will generally do fine. I predict it will get rave reviews, and there will be a market for it – there are an awful lot of cars out there priced between $100k and $200k these days. And at that price, how much money can it really cost Toyota to sell it?

    But the real cost to Toyota is the change in focus. Or more acurately the loss of focus. And in that sense this car is probably a symptom, not the disease. They created a luxury brand from nothing by offering good product at reasonable prices. They didn’t do it by selling some uber-luxury model few could afford and hoping the shine rubbed off on their cheaper models. Lesser car companies have always done crap like that – not Toyota.

  • avatar
    CarnotCycle

    In the spirit of brand thrashing, Toyota should take some pages from the masters of that playbook, GM. maybe Toyota can take all those Tundras rusting away on the lot and slap some 20″ deep-dish Spinnaz and a gloss coat, sell them as Lexus Tundrasclades? Maybe a Yaris-platformed Caddy BLS fighter for Europe? The possibilities are endless!

    What’s really strange about that is Toyota has the “it” technology right now with their hybrids. An SC replacement is a good idea, an SC using a Synergy drive would make a billion dollars with the Left Coasters alone.

    Plus, the only car Toyota ever built with real fast credibility was the last gen Supra Turbo. The Supra could have been to Toyota what the ‘Vette has been to Chevy. Its perhaps the one tiny market niche that GM has just thrashed Toyota in everything, from the physical vehicle itself, to having the balls to keep the model even in lean times, and to how its pitched at its customers. Weird.

  • avatar
    Samir

    You know what’s funny? Since I was a kid I’ve wanted a 3-series for my 30th birthday. Now it’s 2.5 years away, and I’m not going to bother. Just the sight of all of my bosses and their bosses rolling around in the new, fat, insanely underused wealth statement with a blue and white badge makes me not want it. I guess it’s petty, but then I’m a petty guy and I’ve come to terms with that. That’s the kind of impact 10 years of releasing vanilla sedans has had in my mind on BMW. Its lost its special coolness, the same way everyone saying “All your base are belong to us” has made the sentence lame. If I’m alone, then no problem. If I’m not, the brand is in trouble. I doubt I’m alone though, as historians will recount this phenomenon happening to Buick, Cadillac, Lincoln and Mercedes.

    The lesson for Lexus is that dilution may alienate the people who came to Lexus in the 1st place.

    In fact, it’s come to be that the only cool car you can buy these days is either British, American or Italian.

  • avatar
    Steven Lang

    “Its perhaps the one tiny market niche that GM has just thrashed Toyota in everything, from the physical vehicle itself, to having the balls to keep the model even in lean times, and to how its pitched at its customers. Weird.”

    Hmmm….

    GM was exceptionally dominant in the subcompact category vis-a-vis Toyota until the Yaris came out. Even now they still sell far more in the states.

    Full-sized pickups is still a dominant area for GM as well vis-a-vis Toyota. GM has also done far better than Toyota in China as well as the Middle East.

    We can always pick battles, and every knighted brand has their big gaping holes in their armor.

    Now if we are talking about cars that may be prescribed for insomniacs, Toyota will truly have an edge. Then again, there is Buick and a long line of ‘last ride’ Cadillacs. (jk)

  • avatar

    RF, isn’t the car supposed to be called the LF-A? I did see something about how Lexus plans a GS-F and possibly an LS-F (based on the LS luxury sedan, though).

    Here’s the link to the InsideLine article about the LF-A: http://www.edmunds.com/insideline/do/News/articleId=126380

    Gotta love those non-word names, huh? :)

  • avatar
    eh_political

    I don’t have time for the comments till later, but for what it’s worth they should have created a build to order LS to shame the likes of Maybach, Bentley and to some degree Audi.

    Responsible uber-luxury might just fly in the current environment, especially with a renewed commitment to uber-reliability, currently absent in the field and slipping a bit within the Lexus brand itself. Top it off with a 5 year bumper to bumper, and watch the heritage brands get a haircut.

    Especially if they try and match the warranty.

  • avatar
    marc

    Did the name of the upcoming sportscar just change? I thought it was LF-A. The rumored LS-F would be a high performance variant of the LS class.

    But I find more fault with this analysis than that.

    First, Lexus’s mission from the beginning has been to take on the Germans and beat them at their game. It was not to become the next Cadillac or Lincoln. You don’t beat BMW or MBZ with warmed over Camrys. But those ES’s line your pockets with enough cash to justify moving your brand further and further along.

    No one thought that the LS could compete on anything other than price and reliability when it debuted. Well the $100,000 LS600hL proves that people don’t buy Lexuses just on the cheap. And while still reliable, Lexuses are now sold on other attributes. Example, when the IS350 came out, its performance blew away the competition.

    Lexus is a full line luxury mfr, taking on the world now. They need the product to justify that onslaught. The IS-F is the PERFECT example of this. I can’t think of one comparo that actually has it beating the M3. But it doesnt have to beat it. It just has to compete. There are enough Lexus fans (and Japanese car fans in general) to justify it. Not everyone wants a German car, no matter how good it is.

    So then what about the LF-A? Well my second bone of contention with this analysis is that the supposed $225,000 price tag is just a rumor at this point. I know it is being attributed to a Lexus “source.” But honestly, in the age of the Internets, can we believe anything. I tend not to believe that this car will be north of $200,000. But there is precedent for making a leap in price. As others have pointed out, the NSX did just that quite successfully (until it was allowed to wither on the vine). MBZ and BMW, and now recently Audi have had to, at some point, make these leaps too. For every McClaren SLR or Z8, there is another SL65 AMG or R8. Hits and misses. Shouldnt Lexus be allowed the same opportunity. (BTW, I know people are sick of the endless LF-A prototypes and spyshots, but I’m feeling the same way about numerous Panameras, Rapides, et al.)

    Finally (I know Ive lost most readers already), Lexus should and WILL focus on other product before the LF-A debuts. Lexus is tight-lipped about almost everything (except LF-A spy-pics), which is one reason why I do not believe the 225,000 number. There are most definitely upcoming SC replacements, IS coupe/convertible variants, new hybrids, new hybrid powerplants for existing hybrids, new CUVs and SUVs, and who knows what else. This is one vehicle. A Halo. A much needed halo. Give it a chance before summarily dismissing it.

    And BTW, 200,000 Tundras is nothing to sneeze at. It beat the Sierra last month, even though its own sales slipped. The housing slump will not last forever.

  • avatar

    marc : Did the name of the upcoming sportscar just change? I thought it was LF-A. The rumored LS-F would be a high performance variant of the LS class. Holy Moly. Last post on a Friday. Mortified. Text amended.

  • avatar
    CarnotCycle

    “Hmmm….

    GM was exceptionally dominant in the subcompact category vis-a-vis Toyota until the Yaris came out. Even now they still sell far more in the states.

    Full-sized pickups is still a dominant area for GM as well vis-a-vis Toyota. GM has also done far better than Toyota in China as well as the Middle East.

    We can always pick battles, and every knighted brand has their big gaping holes in their armor.

    Now if we are talking about cars that may be prescribed for insomniacs, Toyota will truly have an edge. Then again, there is Buick and a long line of ‘last ride’ Cadillacs. (jk)”

    In sub-compacts, GM offers the Aveo and that’s a Korean re-badge I think.

    Full-size trucks is something General Motors has done well. I would take a GMT-900 over a Tundra, that’s for sure. But GM doesn’t “own” that (shrinking) space, Ford does with the F-150. And what GM has done with their truck platforms, churning out the ‘Sclade and the Rubbermaid-looking Avalanche has been a pretty good brand mauling. Same with Hummer, selling Suburban bits with a box on top (H2) dilutes the Hummer brand even in the best of SUV times I think. All those trucks might’ve been a hot-seller, but its like a loan as far as brand equity: money now, pay later.

    More I think about it, Toyota has had the same helter-skelter inconsistency with “performance” offerings for a long time. The Supra used to be an options package for Celicas. Then they became different cars, then they killed the Supra after making it into a real, actually cool sports-car. Then they made the Celica into a nifty little performance ride, then killed that to free it up for the Scion TC, which as a cool little performance car is junk next to a last-gen Celica.

    Given Toyota’s mainstream roots, having the budget Scion TC and then this Lexus Viagratron widget is an odd match that leaves the biggest primary buyers of their wares (not to rich, not poor either) with nothing, and no performance car at all that actually says “Toyota” on the grille. For such a consistently successful company, that’s an odd anomaly of failure in such a high-visibility market space.

  • avatar
    SupaMan

    Toyota is a wealthy company. They can afford to make mistakes like the LF-A without losing any metaphorical sleep. But it is a particular KIND of blunder, one that reveals a dangerous new turn in ToMoCo’s corporate attitude.

    Soooo…let me get this straight.

    Toyota has the resources and finances to build this alleged supercar, badge it as a Lexus halo car and sell it for $230k, but have to resort to an alliance with Subaru for a $25k rwd sports car?

    Can someone explain this line of thinking? Especially when it goes COMPLETELY against Subaru’s AWD lineup of vehicles?

  • avatar
    Dynamic88

    The lesson for Lexus is that dilution may alienate the people who came to Lexus in the 1st place.

    I nominate this as the most succinct and accurate sumation of the problem.

  • avatar
    AGR

    RF,

    Toyota has been involved in F1 racing for several years, no wins but their presence is clear.

    Toyota/Lexus can afford to do such a car, and they feel that their present and future customer base would expect such a car from a company that is involved in F1 racing.

    Could it be that floating a tentative price is a tactic to get reactions from the digital medium, which is exactly what we are doing.

    Does it dilute the brand? Did the RX dilute the brand?

    Lexus to remain viable needs to get out of the “refrigerator” business and get in the “emotion” business. The F line is one attempt to get in the emotion business, this car is another.

  • avatar
    casper00

    I just find it funny how when lexus came out people were complaining about the lack of power, lack of style and luxury. Now Lexus finally comes out with the LF-A to compete with M.Benz and BMW, we have all these people saying it’s a mistake…..I say just shut-up and let the car manufacturers do what ever they want. If they loose billions who cars it’s their money not yours…….and to tell the truth I think the LF-A will kick ass that’s why all these folks are on writing stupid articles about it. Scared that their 500-600k european exotic will by out performed by the LF-A…..Same thing has been going on with the new coming of the GT-R. People always trying to hate…..

  • avatar
    Paul Niedermeyer

    SupaMan: Toyota has the resources and finances to build this alleged supercar, badge it as a Lexus halo car and sell it for $230k, but have to resort to an alliance with Subaru for a $25k rwd sports car?

    They’re using Subaru’s excess capacity, which Toyota doesn’t have. They’re helping out lil’ brother.

  • avatar

    AGR:

    Lexus to remain viable needs to get out of the “refrigerator” business and get in the “emotion” business. The F line is one attempt to get in the emotion business, this car is another.

    Says who? I sure hope Lexus has some quantifiable data backing-up your assertion. And I’d be VERY careful interpreting that data.

  • avatar
    Paul Niedermeyer

    Stephan Wilkinson: pch101, they may have benchmarked the S Class, but the E class was its price and size competitor.

    Lexus benchmarked the S-Class and 7-Series, but undercut their prices. The length of the LS and W-126 S-Class were both exactly 196.7″; the E-class was ten inches shorter. The bigger W-140 S-Class didn’t come out until two years later.

  • avatar
    Mullholland

    This is simply Toyota trying to capture a bit of lightning in a bottle for their Lexus brand. This car is a riff on the excesses of the moment offering an over-the-top statement of automotive excellence and performance worthy of gracing the garages of car collectors the world over. And, in fact, the whole exercise has a good deal of historical precedent. Ever hear of the Toyota GT 2000?

  • avatar
    Stephan Wilkinson

    Oh, god, I am SO not going to get into one of these spreadsheeted Prius-versus-Corolla-or-is-it-versus-Camry arguments. I was there at the birth of the LS400, in 1990. Were you? The W140 S-Class came out one year later, not two, and I’m sure Toyota knew exactly what was coming. The LS400 was an E-Class competitor, not an S-Class entrant.

    I don’t really care about inches, even mine.

  • avatar

    Hear hear. The LF-A is not so much a halo car, it is a pride car. A statement. An exercise in self esteem.
    You don’t celebrate your arrival at the top with yet another sensible sedan, how well build and thought out it may be. You want to assert your position as the alpha guy by showing that you can do anything better than anybody else if you care to. In the automotive world, the obvious way to do it is to build the archetypal über supercar or alternatively the biggest and most luxuriest of luxobarges (which by the way japanese mags also say Lexus is currently brewing, think a Maybach-esque big brother to the LS). This is not so much directed at the market than at your own people and the competitors.

    The 2000 GT was exactly that. At the time, it did not made a dime for up and coming Toyota, it made a point. And the car is still revered in Japan and a source of great pride.

    But there are two problems with the LF-A: it is forever not ready because of the corporate culture inside Toyota, which wants everything to be perfect and committee approved, which is of course very fine and useful with a mass market midsize car but terribly difficult to achieve with a car which pushes the envelope. The same thing nearly killed the Bugatti Veyron before it went out of the gates.

    And the second problem of the LF-A is the GT-R, and they did not see it coming. Nissan effectively crashed Toyota’s coronation party and now they are not too sure what to do about it… The LF-A *has* to be massively better than the GT-R and that will not be easy to achieve. Meanwhile, the future NSX is AWOL…

  • avatar
    AGR

    RF,

    A Lexus is a very reliable “luxury appliance” a “refrigerator”, surely the Lexus people know that their cars are very competent, very reliable, very detached from the emotions.

    If the Koreans with upmarket aspirations pull a Lexus on Lexus, from all indications Hyundai is developing such a plan with the Genesis. Lexus needs to expand its brand to include a deeper emotional involvement from its customer base.

    Toyota/Lexus is not dismissing the aspirations of the Koreans, as well they are exploring possibilities to expand their own brand and shift away from the “appliance/refrigerator”.

    Does anyone have quantifiable figures that are public, probably not the case. Is there a strategy “white paper” in a drawer? Very possible, and certainly not made public.

    By enhancing their emotional appeal Lexus might gain additional traction and momentum in some highly desirable developing markets that are brand conscious.

    Lexus is a brand that does well in the North American market. The Japanese do not favor a Lexus, in its home market Lexus is the “domestic” producer of luxury cars.

    Could it be that a Lexus in Japan is like a Cadillac in North America?

  • avatar

    AGR:

    A Lexus is a very reliable “luxury appliance” a “refrigerator”, surely the Lexus people know that their cars are very competent, very reliable, very detached from the emotions.

    Are you kidding? What’s wrong with the current LS? That’s one sharp, sexy-looking sedan. It’s just as “emotional” as the S-Class or 7-Series and MUCH better looking besides.

    In fact, I defy anyone to find me a single Lexus customer who says ho-hum, I’m bored. How about a Mercedes?

    Anecdotally, I know lots of extremely satisfied Lexus owners. I talk to them in great detail about their cars and ownership experience. Not ONE hankers for more sex appeal or driver involvement. They consider German cars over-priced and… unnecessary. The consider Cadillac rubbish (sorry, but the truth hurts). They love Lexus’ customer service, reliability and hush (comfort, quiet).

    Boring? Lexus? That’s a ridiculous idea. At least for Lexus owners.

  • avatar
    Driver23

    @Farago: please read BMW forums, there are a LOT or bored people who were finally happy to get rid of their Lexus appliances.

    Besides, everybody knows that average Lexus buyer is way older than BMW customer and primnary occupation is ‘retired’. Who needs sex appeal in this group? I am sure the same group is primary customer for overstuffed sofas, recliner chairs with massage and tempurpedic mattresses.

    For me it was 10 minutes test drive in GS and I was on my way to the BMW dealership. Hey, even Lexus salesman was boring.

  • avatar
    AGR

    RF,

    Lexus owners are satisfied since they are loyal to Lexus for their own reasons. Asking these owners questions will always generate the same predictable answers.

  • avatar
    Dynamic88

    Lexus owners are satisfied since they are loyal to Lexus for their own reasons. Asking these owners questions will always generate the same predictable answers.

    Great news. That means there will be predictable ways to continue to please the people who actually buy the cars.

  • avatar
    Dynamic88

    OK, I’m convinced. There is no downside to brand extension. That means Ferrari needs to get to work on some crossovers, some hybrid sedans, and maybe a pickup.

  • avatar
    Martin B

    @Farago: satisfied Lexus owners … consider German cars over-priced and… unnecessary. They consider Cadillac rubbish

    You wouldn’t expect satisfied Lexus owners to say anything else. No surprises here.

    The interesting question is: Those people who considered buying a Lexus but ended up buying something else. What was their impression of the brand?

    These are the next group Lexus must influence if it is to expand sales and/or compensate for current owners who change brands. How to influence their perceptions?

    Not sure if the LF-A will do it. Will it be considered a real Lexus, or a separate marketing exercise with no benefits trickling down to the ordinary Lexus?

  • avatar
    CarShark

    Lexus = reliable luxury. That’s what people like.

    Fine. But who’s to say that reliable luxurious sportiness can’t be as good or better? You see, this is where I’ve got you, fair and square! You and others keep subconsciously adding “comfort” or “softness” to Lexus’s raison d’etre, so whenever they try to inject some youthfulness or energy into the brand, you smack their hands. “No! Don’t leave the narrow band I’ve put you into. No! Don’t try to think outside the box.” You do the exact same thing to Cadillac. If they made the very best car in the whole wide world, but it handled well, I believe you wouldn’t give it five stars because “Cadillacs should only be about comfort, not cornering.” What you are harping on about isn’t a true brand. It’s a stereotype. Big difference.

  • avatar

    CarShark:

    What you are harping on about isn’t a true brand. It’s a stereotype. Big difference.

    I’m intruiged. What a “true brand?”

  • avatar
    CarShark

    @Farago

    Nice job of not answering anything else I said.

  • avatar
    thoots

    I guess I just plain don’t get it.

    So, a typical Lexus buyer, who wouldn’t touch a miserably, horribly, unbelievably unreliable BMW or Mercedes with a ten-foot pole, walks into a Lexus dealership, sees a picture of the LF-A on the wall, and goes, “Damn! Now I don’t want to buy a Lexus anymore!”

    Say what??

    The existence of an LF-A won’t cost Lexus one solitary sale of any other car they build.

    And I suppose they’ll sell as many LF-A’s as they choose to make.

    What the hell is all this fuss about??

  • avatar
    Dynamic88

    CarShark:

    I’m also intrigued too. Just what is a True Brand? How does it differ from a stereotype?

  • avatar
    AGR

    A different perspective:

    Figures from Automotive News

    Lexus sales for

    ………..Jan to Apr 2008…..+/- 2007

    ES………….20,599…………-16.2%
    GS…………..6,138…………-13.6%
    IS………….15,516…………-1.5%
    LS…………..7,914…………-32.6%
    SC…………….860…………-33.6%
    Lexus Cars…..52,027…………-15.4%
    Tot Luxury cars.311,936……….-7.2%

    These figures indicate a level of defection from Lexus cars to either the RX (staying in the Lexus family) or to competing brands.

  • avatar
    Pch101

    I know lots of extremely satisfied Lexus owners. I talk to them in great detail about their cars and ownership experience. Not ONE hankers for more sex appeal or driver involvement.

    Honestly, the same could be said of loyal Buick buyers or Cadillac buyers or Lincoln buyers. Those who stay with a brand tend to like it.

    Lexus wants to expand in markets outside North America. So far, they have not done well with that effort. If they want to dethrone the Germans from the world stage, then they need to get rid of this desirable but staid image that they have developed.

    The US is not the world’s only luxury car market, and Toyota obviously doesn’t want to stand still. If they cannot shake the appliance image, then Lexus is going to stagnate.

    To improve a brand, it is necessary to understand the customers who the brand targets but fails to capture. It is important to serve the core base, but if the brand is going to grow, sticking to the regulars is not enough.

    I believe that this is what CarShark is getting at here. Lexus has a certain brand value that it wants to communicate, but the critics don’t read that message as the manufacturer would like them to.

    More to the point, Lexus has basically been an American brand. The US is no longer enough, and Toyota wants Lexus to become a true world brand. If they want to be taken seriously globally, they need to beat the Germans on feel and vibe, and not just on the numbers. Americans may be content with winning on the numbers, but a lot of the rest of the planet is not.

  • avatar
    Landcrusher

    RF,

    I think you may be correct on this one. Still, I have to remind you and others that all rules do not apply all the time.

    We tend to sometimes give absolutism to rules that we should not, and branding rules pretty much ALL fall in this category. They are not commandments, just like many of the “rules” of good art are not.

    The cimmaron was a disaster that was an attempt to copy the success of the late seventies sevilles. However, the seville worked because of the oil embargo, and the fact that the buying public had not really caught on to cadillac’s dwindling build quality. They really did not think that the seville was just like a chevy, they thought it would be higher quality.

    I suspect at the time though, the gurus were all talking about how well seville like moves work, and how every company should learn from it.

  • avatar
    p00ch

    My guess is that Lexus may be challenging the Italians, much like they challenged the Germans in the early 90’s. The LF-A would represent a more reliable and cheaper alternative to a Ferrari or Lambo with similar performance. It’s a small market but hey, perhaps some Ferrari owners are getting a little tired of the engine fires.

  • avatar
    tankd0g

    I have a problem with the generic look of this car. I think people with more money than brains will pay the price, especially if it’s a hybrid, but it has to look the part and this thing doesn’t.

  • avatar
    tech98

    OK, I’m convinced. There is no downside to brand extension. That means Ferrari needs to get to work on some crossovers, some hybrid sedans, and maybe a pickup.

    LOL!
    Although, Lamborghini started out as a tractor maker and no-one holds it against them today.

  • avatar
    thoots

    OK, OK, OK.

    Man, think how much bigger and more powerful Toyota would be now if it wasn’t for that damn brand-diluting 2000GT!!

  • avatar
    brownie

    Upon further reflection, I take back what I said. The LF-A is not a mistake. It makes more sense when you think of it as a (possibly) Toyota-branded product in Japan, rebadged for North America and Europe. Kind of like how the NSX was sold as a Honda in Japan. In Japan, Toyota sells sports cars, luxury cars, SUV’s, compacts, and let’s not forget the Century. The Lexus SC300/400 was a variant of the Toyota Soarer. And so on – the point is that our conception of the “Lexus” brand doesn’t quite exist in Japan (though I gather Toyota is working on it, and maybe the LF-A is going to be badged a Lexus even in Japan – someone else here probably knows).

    So if I forget that the LF-A is a Lexus supercar, and instead think of it as a Japan-market Toyota supercar, it doesn’t seem like a distraction. Why shouldn’t Toyota have some company resources devoted to supercars? If they bring the Toyota mentality to the segment and look to make money selling them, not just produce a halo car (ugh), it’s not a stretch – just another market segment to dominate.

    And if they’re going to sell it outside of Japan, it needs to be branded as something. From that perspective, what else could it be besides a Lexus?

    Maybe I’m wrong – maybe some idiot inside Lexus decided they need a halo car (ugh). But if, rather, it’s just yet more Toyota badge engineering, or a global Lexus-badged car intended to kickstart the brand inside Japan, then it’s not such a bad idea at all.

  • avatar

    I read Consumer Reports’ 2008 car listing and noticed that now cars like the Dodge Viper and Cadillac XLR are listed as “Luxury/Performance Sports Cars.”

    There’s nothing particularly luxurious about the Viper, but it’s considered a luxury item, just like Ferraris and Lamborghinis. You could buy a cushy Toyota Camry with leather seats and all the trimmings, but it wouldn’t be considered a luxury car–it’s still just a Toyota. On the other hand, a car like the Lexus ES 350 is considered a luxury car, but it’s really just a Toyota Camry under the skin. If it’s just a Camry, why is it a luxury car? Because it costs more money to buy than an ordinary Camry, which makes it out of the reach of an average Camry buyer.

    Cars like the LF-A are not luxurious cars; they are cars that are a luxury to be able to own. Isn’t that what the Lexus brand is all about?

  • avatar

    It doesn’t look like a supercar to me.

  • avatar

    Stephan W: Nobody else cares much about yor personal inches either, but when it comes to the positioning of the original LS44, you're just plain wrong.When it comes to the positioning of the original LS44, you’re just plain wrong. It’s all about perception, you see — the buying public’s perception, not just yours. And you, while you may have been “there” steadfastly ignoring any inches, obviously don’t remember the image the media transmitted at the time: The Lexus LS 400 was consistently portrayed as a competitor to the Mercedes S-class / BMW 7-series, not the Mercedes E-class / BMW 5-series. And that’s the image that’s stuck with the rest of us. (Apparently including mr Farago, before he all too hastily edited his post along your misguided lines.)

  • avatar
    Affalterbach

    Well, Mr.Farago, on similar lines, would you then care to explain why the Toyota 2000GT was a failure for Toyota? Or how the NSX reduced Acura to mediocrity? Or why does a company that cannot produce a single sports have one of the largest budgets in Formula1 (yet giving laughable performance)?

    Lexus may have a following in US, but it as bad as a brand in Europe as Zhonghua. In the European market, there is no such thing as a space for a cheap luxury car; that concept exists merely for USA.They need to make their presence felt in this market, where they sell a sales figure in TRIPLE-digits.

    Also, kindly elaborate on the fact why Honda has green-lighted a NSX-successor for Acura(and that car WILL hit the market in 2011). I mean it going to be a unspeakable sin, right?

  • avatar

    Affalterbach :

    2000GT was a fail for the same reason as the Lexus sports car: brand extension.

    As for Toyota pissing away their money in F1, I couldn’t agree more. I mean we do agree, right?

    Honda NSX? Another epic fail. Both in the past and the future. Same reason.

    Next question?

  • avatar
    Affalterbach

    I’m so sorry but you fail to answer most of my questions.

    The pre-NSX Acura was a decent make, but not a good one. The NSX changed all that. Do you remember people gawking at the Acura-dealerships at the NSX? Or how it considerably improved its brand image? Our perception of Acura, as a sporty and a good-value maker was developed to an extent by the NSX.

    2000GT put the obscure Toyota into spotlight in the USA, created news for it, and was an exercise in advertising on wheels. A lot like the NSX.

    Also, you claim that Toyota has an excellent corporate structure(make smart decisions), but how would they not know the MASSIVE costs they pay for F1?. I mean surely, they had something in their minds before they allocate precious corporate resources to their F1 that’s barely competitive.
    The answer is that it is sort of a Halo-car. A corporate statement.

    Pespsico, Coca-cola, McDonalds, Disney spend millions on trying to maintain and keep a particular brand-identity. Toyota does the same by participating in F1. So is building a Halo-car for Lexus.
    Keep in mind that Lexus is very weak in Europe. Even in America, compare their numbers versus the Germans.

    You will also realize that its the ES, and not the LS that defines the brand. Hyundai, as we know is aiming for that (and the GS) with its Genesis.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Lou_BC: Too funny
  • ToolGuy: Extra credit – count the ‘Automotive’ references and implications in this article:...
  • ToolGuy: “I got a question. If you guys know so much about women, how come you’re here at like… the...
  • conundrum: Forget the Mach-E. New F150s are piling up in lots around Detroit, as the Autoextremist pointed out on Jan...
  • Scoutdude: To be fair the last 4 items were added after the reveal in response to customer requests so not really...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber