The 2018 Lexus RX 350L is unveiled at the Los Angeles Auto Show on Nov. 29, 2017.Jae C. Hong/The Globe and Mail
When Toyota launched its brand-new Lexus division from nothing in 1989, it dove deep right from the start. The 1990 Lexus LS400 full-size sedan was a cruise missile aimed straight at the European prestige sedans that then represented the pinnacle of automotive engineering.
It didn't fall short. The LS400 was everything a large prestige sedan should be. Almost overnight, it established Lexus's credibility. And that cred would only grow with time, as consumers discovered the intangibles of Lexus ownership – the unique dealership experience, the quiet reliability of the cars.
Given the rarefied air of its market, the LS400 was never expected to generate big sales numbers. The volume would come with its co-debutant, the ES, and other more mainstream models that joined the lineup over the years.
Almost three decades later, Lexus currently fields 10 distinct products and its street cred remains intact. In Canada, through October this year, it outsold both its fellow Japanese competitors, Acura and Infiniti, as well as the Americans – Cadillac and Lincoln – and Volvo and Jaguar-Land Rover.
The Germans, not so much. Overall, Lexus ranks a fairly distant fourth in the luxury market, behind Mercedes-Benz, BMW and Audi (in that order).
So is Lexus a success? "Lexus set out to define a new experience in the luxury market and I think it achieved that," Lexus Canada chief Jennifer Barron says. "It set a new benchmark for the guest experience."
"Certainly, Lexus is a success," concurs Stephanie Brinley, senior analyst with IHS Markit. "It went from just an idea to being a top luxury brand.
"Right now it's working to install more passion and excitement and looking to refine its personality," Brinley adds. "But that's a reflection of evolution over time and not an indication that it hasn't been successful."
Brian Murphy, vice-president of research and editorial with vehicle valuation company Canadian Black Book, cites another measure of Lexus's success: "We see them as successful from the retained-value standpoint. This year, seven of their vehicles finished in the top three in our CBB Best Retained Value award."
So in the luxury market, there's arguably more to success than just sales numbers. But in fact, Lexus is a player in numbers, too. Don't be misled by its rankings in Canada.
In the much larger U.S. market, Lexus has historically taken turns as the top-selling luxury brand. And when it's not on top it's usually in a very close contest with Mercedes-Benz and BMW in the top three.
As for Canada, Barron points out that Lexus sales are rising this year – up 12.8 per cent through October. "Lexus firmly established itself as a luxury brand and now we're taking that even further, moving towards a luxury lifestyle brand with our new global branding."
The new LC coupe, while too exotic to ever be a big seller, is another image builder for the brand, with its standout styling, rambunctious V8 performance and genuinely athletic handling.
"It's going to bring younger people to the brand. And we'll continue to do that without losing sight of the importance of the guest experience that always has been and always will be the foundation of the brand," Barron said.
Meanwhile, the only Lexus that comes close to dominating its segment in Canada is the RX (appropriately, it's the vehicle that invented the car-based luxury crossover segment when it launched in 1997). The RX has led segment sales for most of its career; and to the extent it has recently slipped a place or two (the Audi Q5 occupies the top spot), that's likely more a result of internal competition from its smaller sibling, the NX.
Still, RX sales are up 17 per cent this year and a new RX-L with three-row seating should bring further gains. The NX currently ranks fifth in luxury SUV sales, and the CUV pair are easily Lexus's top sellers.
Its third-best seller, the IS compact sport sedan, is an also-ran among its own peer group, outsold three to one in Canada by the Mercedes C-Class and more than two to one by both the Audi A4 and BMW 3 Series. The Lexus mid-size sedans, ES and GS, rank 13th and ninth in their respective categories.
"The ES has been one of their less inspired products," IHS Markit's Brinley noted. "But the RX and NX are doing well and that's [in the segment] where people are shopping."
And the LS? A bold new design arrives early next year and should reignite interest in a nameplate that has become virtually forgotten of late. Through October this year, the current LS – which dates back to 2006 – had racked up 39 sales in Canada while the segment-leading Mercedes S-Class was up to 792.
Of course, sales success isn't only about whether individual models outsell their segment rivals. It's also a question of "being there." Currently, Lexus lacks an entry in the fast-growing category of subcompact CUVs such as the Audi A3 and Mercedes GLA. And its only sports car is the just-launched LC.
The LC is key to Lexus crafting itself a more dynamic image, but Brinley says it should be handled carefully. "As they instill more passion, one of the things to be careful of is not to alienate the owners that do love their more quiet nature."
The writer was a guest of the auto maker. Content was not subject to approval.
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