How Lexus is losing the luxury war

Illustration for article titled How Lexus is losing the luxury war

Being the top-selling U.S. luxury brand for 11 years was nice, but according to a list of gripes in a leaked internal document obtained exclusively by Jalopnik, they're also on the verge of becoming the new Buick. UPDATED


The document — the notes from the Lexus Southern Region's dealership meeting — outlines several long-standing concerns, which the dealers say Lexus parent Toyota has been slow to tackle. Most boil down to dealers across the country begging Lexus for better vehicles in an aging lineup. They want cars and SUVs with more style, more technology, better pricing and more features to lure new buyers rather that relying on aging repeat customers.

"Lexus cannot afford to rely on selling cars to its existing aging customer base," the dealers warn, "or it risks becoming another Buick."

Even before the March tsunami curbed Toyota's output, Lexus was losing ground to not just European companies but General Motors. Through March, it was being outsold by BMW, Mercedes, Cadillac and Buick, whose new models have scrubbed off much of its reputation as car for people to enjoy from the game room of their nursing homes.


The dealers contend Lexus relies too much on its older "bargain" models — like the ES350 sedan and RX300 crossover — while putting no sales muscle into the pricier cars such as the LS460. Their wish list for new models includes an Audi Q5-sized small SUV, a three-row crossover distinctive from the RX, an IS coupe and convertible and replacements for the coupe and convertible SC. They also want more vehicles built in North America, citing the effects of the tsunami, although Toyota's North American production has also been cut in the wake of the disaster.

As for technology, dealers say Lexus is a "follower, not a leader," noting that Toyota's Entune entertainment system is far more advanced than anything in Lexus models — yet will be sold on Toyotas first. Lexus is of course the same brand that up until this year was still offering a cassette player as an option in one of its cars — the last automaker in the United States to still do so. And while the dealers don't mention the Hyundai Equus by name, they do tout the idea of giving iPads as owner's manuals.


While Lexus has promised more aggressive styling — as seen by the LF-Gh concept — it's also facing an onslaught from companies around the world who want the ample cash of American Lexus owners. There's no easy money left anywhere else.

UPDATE: Lexus and its dealers both sent statements to Jalopnik taking issue with our story and denying any dissatisfaction between dealers and the company. Brian Smith, the vice president of sales and dealer development said Lexus will hear the complaints soon:

While most manufacturers say they listen to their dealers, at Lexus we do more than listen. We work side-by-side with our dealers in planning our business and taking care of customers each and every day. It's precisely because of this two-way communication that Lexus has led the industry in quality, customer satisfaction, owner loyalty and resale value, to name a few.


Kevin Whalen, the national chairman of the Lexus dealer council, said such criticism was part of the "secret sauce" for the automaker's success, and that dealers have long held an open dialogue with Lexus.

You can see the full leaked document below:



Lexus has a bad reputation for most people under the age of 40. Driving a Lexus often means that you're old and want to look classy and don't know enough about cars to get something decent. Or, it means that you're young, want to look more monied and again, don't know much about cars. Or you're a suburban wife who got one because all the other women in your book club drive one and you don't know jack about cars either.

Either way, if you buy a Lexus, there's a good chance that you don't know much about cars or probably just want a fancy looking appliance since most of their cars drive that way. Only a few of their cars are worth driving, sadly.

Toyota has been disappointing lately. Their one car of note is the Prius, but it's not really a driving car. Their trucks aren't half bad and neither is the 4-runner. However, they haven't really done something impressive lately. Lexus is the same way short of just charging you more for a mediocre driving experience with a bunch of expensive stuff thrown on to an uninspired exterior design.

Toyota's best shot for something great is the FT86/FRS/Subayota sports car.

Meanwhile, you have Hyundai and Kia really surprising people with some great designs and Subaru showing off some vehicles that are great to drive.