When Toyota first launched the Lexus brand at the start of the 1990s, many wondered whether the Japanese could effectively compete with the dominant German luxury car brands. Lexus’ flagship LS looked like a Mercedes, was quiet like a Mercedes, and – in the end – handily outsold its German rival in several markets. That performance over 20-odd years has established Lexus as a luxury car heavyweight. Recently, though, a new American brand has come on the scene, and many wonder if the Americans in Silicon Valley can compete with the dominant Lexus luxury brand.
I’m talking, of course, about Tesla and its hot-selling Tesla Model S performance sedan.
At the moment, Tesla is selling all the Model S sedans it can make. Mercedes, too, is enjoying a bit of a renaissance as sales of its latest S class sedan are up 81% over the last version. Lexus, however, has seen sales of its LS model drop 20% in the last year – and it seems like they’re pinning that drop on the Model S.
“Many of the buyers in that (high-end luxury sedan) segment want what’s new, and they’re trying it,” said Lexus’ VP of Marketing, Brian Smith. “They’ll probably come back (to Lexus) … I think the question remains to be seen how many people will buy a second Tesla.”
Sounds like a case of sour grapes to me, and I expect the new Model X to take a serious bite out of Lexus’ excellent RX450h hybrid SUV sales while the upcoming Model 3 takes aim at the brand’s segment-leading ES300h, as well. That’s just me, though – what do you think? Is Smith right, or is Lexus (and its parent company, Toyota’s) “no EV” stance on electric cars on the wrong side of history?