Toyota Motor Corp.'s Lexus could be an exception proving the rule that a luxury brand needs decades in the market, or longer, before it can evolve into a status symbol, according to the Detroit News. In 2003, Toyota sold 259,755 Lexus vehicles in the United States, up 11 percent from a year earlier, and more than BMW, Mercedes, Cadillac or Acura. It was the fourth straight year Lexus has been the nation's #1-selling luxury nameplate -- a remarkable feat, the News said, considering the franchise isn't yet 15 years old. Lexus is positioned to continue its streak, with plans for a new version of its car-based sport utility vehicle later this year, powered by a gas-electric hybrid engine. Encouraged by Lexus' consumer acceptance in the United States, Toyota will introduce the brand in Japan this year, and is hoping to carve a bigger foothold in Europe, where it has run into some difficulties. General Motors Corp.'s Cadillac franchise, on the rebound after several years of declining sales and image among luxury buyers, also has been trying to extend the brand worldwide. Lexus delivered vehicles that scored high in quality and satisfaction ratings. The automaker also created incentives for its dealers to provide pampering, such as personal delivery of vehicles. "The European brands may have been caught off guard in 1989," said Mike Michels, a Toyota spokesman. "They quickly responded. We saw them work on pricing and the sales experience." Lexus has capped its U.S. distribution network at about 200 dealerships, compared with 340 for BMW, 325 for Mercedes and 1,495 for Cadillac. Toyota determined that keeping the distribution network lean would improve the profit potential for each dealer, according to the News. As such, Lexus dealers have generated substantial capital to reinvest in dealerships and inventories, thereby improving conditions for customers and spurring new sales, the News noted.
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