Lexus takes water detour to boost flagging car sales
Lexus thinks it finally has a way to catch up with Mercedes in luxury-car sales: go into the high-end boat business.
Toyota’s premium brand plans to start selling a 20 metre ultra-luxury yacht in the US in the second half of next year. The vessel, announced at a boat show in Yokohama, will have room for 15 guests, three bedrooms with their own washrooms, plus separate quarters for crew. Executive vice president Shigeki Tomoyama wouldn’t reveal the boat’s price, but said it would be comparable to others in its class (Sunseeker’s 20.1 metre Manhattan goes for about $3 million).
For Lexus, taking to the water is less about selling big, beautiful boats – the market is tiny – than it is about adding lustre to a brand that’s lost some of its shine. Lexus hasn’t held the lead in high-end US car sales for almost a decade.
Meanwhile, mass-market automakers are closing the quality gap, and the shift toward autonomous driving and vehicle-sharing threatens to turn cars into utilitarian people-movers.
“What this does is raise Lexus’s luxury quotient,” says Jaqui Lividini, founder of Lividini & Co, a New York brand strategy firm. “I mean, what’s more luxurious than a yacht?”
An image makeover at Lexus is probably in order. Since it ended an 11-year run as the US’s top-selling luxury car brand in 2010, it’s been outpaced by BMW and Daimler’s Mercedes-Benz, which has been faster to shift toward the sports utility vehicles that Americans love. In 2017, US sales of Lexus sedans dropped by a quarter, and the Japanese brand sold about 10 per cent fewer vehicles than market leader Mercedes.
To catch up, Lexus this month unveiled a new ultra compact utility vehicle, the UX, at the Geneva auto show. It also added a three-row variant to its RX line of bigger crossovers, redesigned its flagship LS sedan and launched a sleek new sports car to draw people into dealerships, the LC coupe.
Aside from the new hardware, the company is also taking a different marketing tack, trying to recast itself as the purveyor of a luxury lifestyle, not just highend cars. To do that, the company last year jettisoned the “pursuit of perfection” slogan it had been using for decades and adopted a new one: “experience amazing”.
“If you look at boating, you’re not buying a shell – you’re buying an experience,” says Pamela Danziger, owner of research firm Unity Marketing. “There’s a whole lifestyle that goes along with it.” Lexus hasn’t unveiled its yacht design yet, but Mr Tomoyama says most of the details have been worked out and it’s now in the production planning stage.
A clue to how it may look is an early sketch the executive revealed at a Tokyo event last May, which appeared to show three decks and borrowed heavily from the same swooping lines used in a 12.8 metre one-off concept yacht that Lexus put on display last January.
Lexus isn’t the only car maker dipping its toe in the water – Mercedes in 2016 started selling its own limited-edition yacht and BMW has been playing with concept crafts since at least 2011 – but the Japanese luxury brand is the only one that’s committed to mass production.
Robert Passikoff, founder of marketing consultancy Brand Keys in New York, says he likes the strategy of using big boats to sell more luxury cars.
“Just the fact that the boat is there may reinforce values that are important for the automotive category – like speed,” he said. “It becomes more emotional, and you kind of go, ‘Well, I can’t afford a million-dollar boat, but a $80,000 car? That I can afford.’”