Lexus Lowers Sales Expectations For HS250h

Imagine you’re an automaker which enjoys an unprecedented drivetrain technology advantage over all other manufacturers. Imagine you build a brand around that drivetrain that becomes a cultural touchstone, a symbol of your firm’s technical prowess and commitment to the environment. What do you do next? The obvious answer is to build a luxury version to help make the extra profits needed to pay for the drivetrain’s development, right? Well, Toyota did just that, piggybacking the Lexus HS250h on its strong Lexus brand and Prius technology. The only problem? It’s not working.

I think we underestimated the power of the Prius brand… And we overestimated what the market would look like based on gas prices. But if we can do over 1,000 units a month, 1,000-1,500 units a month, we feel really good about what we’re doing in the marketplace.

That, or Toyota got caught by lazy, GM-style branding strategy. The HS was a “Buick Prius,” offering more weight, power, price and luxury than its iconic sibling, but none of its green halo, distinctive styling, or name-brand cachet. And did we mention that it looks way too much like a Corolla to be taken seriously as a luxury car? But the HS is also a symbol of a larger problem at Toyota’s luxury division: the inability to sell its pricey luxury hybrids in any kind of meaningful volume. Since the January, Lexus has sold only 119 examples of its GS450h hybrid, and a mere 40 LS600h sedans. Only the RX400h sells better than the HS, moving 1,232 units in April according to Wards. In contrast, the Prius sold 12,555 units last month, and has sold 40,793 units since January. Clearly Lexus still has some work to do before it can have real confidence in its luxury hybrid strategy.