Make it, they’ll buy
Lexus’s boss thinks it lacks a loyalty winner at the lower end, writesMARKHINCHLIFFE
JAPANESE luxury carmaker Lexus needs an entry-level car to combat BMW’s 1 Series.
Lexus Australia boss John Roca says it is one of only two obvious gaps in its admittedly small product range.
He says the other big gap is between the IS and GS after the departure of the ES.
‘‘A lot of young people know more about Lexus than older people do, so we need a car to get them started in the brand,’’ Roca says.
‘‘A $49,000 car with a Lexus badge is what they really want. I have been telling head office that forever, and they are now starting to listen.
‘‘Already there is talk about a baby Lexus within the next three years, but they are very very vague about it.
‘‘At this stage they won’t even confirm if the project exists. If it does, it’s either an entry-level passenger car or an SUV.’’
Roca says an ES-sized midrange car would be good but his priority would be an entry car to attract more people to the brand.
‘‘BMW gets people into the brand with the 1 Series and they develop a loyalty,’’ he says.
‘‘Once they have a loyalty to a brand it’s hard to get them out of it.’’
Roca says an entry-level Lexus would not affect Toyota.
‘‘They have two very different buyers,’’ he says.
Roca says Lexus was launched in Australia in 1990 when the economic climate was unsuitable.
‘‘ We launched with the LS400 at $117,000 in the middle of a recession when housing interest rates were 17 per cent and car finance was about 24 per cent,’’ he says.
‘‘It was like launching the Mercedes brand with only the S class.
‘‘In 1991 we added the ES300 and that was it for about seven years. Today we have 8.8 per cent of the luxury market with only a handful of models.’’