Lexus needs to reinvent itself to keep up with BMW, Mercedes 05/09/2011
Lexus is expected to lose its dominant sales position in the U.S., which it has held for the past decade, as BMW and Mercedes-Benz both surge past the Japanese automaker on the sales charts.
At first, many might chalk the issue up to the recent Japanese earthquake, which has definitely hurt Lexus and will likely continue to in the future. Unlike its parent company Toyota, which has multiple plants in the U.S., all but one of Lexus' vehicles are made in Japan, exacerbating the supply issues for the luxury marquee.
Yet in reality, the problems for Lexus extend far longer than that, back into last year, when BMW and Mercedes made a charge in the final few months and threatened Lexus' dominance. In the end, the Japanese brand came out on top, but it certainly looked vulnerable going into 2011.
"The house was on fire at Lexus before the earthquake hit," Eric Noble, president of The Car Lab told Bloomberg. "If the current situation wakes them up to that, then some good may come from it."
Bloomberg attributes much of the problem to Lexus' seeming complacency at the top of the sales charts, even in the face of shifting tastes from consumers. BMW and Mercedes were at the top for many years, just as Lexus began to offer quality and reliability that the German brands didn't have.
That eventually allowed Lexus to usurp the throne, but now that BMW and Mercedes have fixed their quality issues, luxury buyers are beginning to value performance above all else. Lexus hasn't really responded in this regard, and even beastly machines like the new LFA supercar will do little to shake off Lexus' image as the quiet, reliable, slowly-dying luxury marquee.
Don't write off Lexus yet - Toyota is the largest automaker in the world and isn't likely to go down without a fight. But for now, its BMW and Mercedes' game to lose.