Why Lexus is yet to break into the UK mainstream

[Roger Bill]

An interesting article just posted on the Autocar website, I expect something similar or an extended version appears in the print publication out today.

https://www.autocar.co.uk/car-news/business-car-sales/why-lexus-yet-break-uk-mainstream

[Guest]

I have always thought only having 1 power train option in most models is always going to limit sales, and coming late with BEV models isn’t going to improve sales in the short term

[wharfhouse]

1 hour ago, Derant said:

I have always thought only having 1 power train option in most models is always going to limit sales, and coming late with BEV models isn’t going to improve sales in the short term

Well I bought into the IS 300h (came from BMW) and bought a used car to get one immediately (as didn't want to wait for a new one) with the plan to upgrade to a new one when the next model rev came along - and then Lexus decided not to bring the new IS model into the UK and also drop the GS. After trying a number of other Lexus models and not being particularly taken by them when I tried the new NX 350h I thought I had possibly found my next car - only to find that the delivery had gone out the window and then couldn't even place an order... So twice Lexus UK could have had a new car order from me but made it impossible. I would like to stay with Lexus for my next car but personally feel that the Lexus UK (maybe European) management of the brand (and not the cars) is failing customers in some of the decisions it is making and by reports on here the management of the quality and service at some of its dealer network has become questionable (I know some things are outside their control such as component shortages but there is plenty they can be working on).

[Rabbers]

I'm not sure that a financial comparison between Lexus and most other premium car manufacturers is particularly instructive.  Lexus' penetrations of individual markets and the speeds of their achievement have, with the arguable exception of the U.S., never been spectacular but, despite slow progress in important areas such as Europe, the Lexus division reportedly continues to punch well above its weight within Toyota in terms of profitability, i.e. its percentage contribution to corporate profits far exceeds that of its sales.  As long as this situation prevails, it can be imagined that the corporate management will continue to tolerate levels and rates of achievement for Lexus in some markets that would be considered unsatisfactory by competitors.

[First_Lexus]

That’s a very interesting article, thank-you for posting.

Personally I think Lexus, like a lot of Japanese brands, still struggles with a British car buying public who perceive German brands as the default ‘luxury’ choice. When I was growing up there was a broader range of ‘socially acceptable’ luxury choices, from Rover and Jaguar (or Armstrong Siddeley and Wolseley if I go back into the 1960s) to large French offerings such as the Renault 30 and Citroen DS, Volvo and Saab and, of course, Mercedes.

At some point after the UK entry into the Common Market, and with European brands cheaper and easier to purchase, as a nation we seemed to become obsessed with the fact that Japanese cars were ‘cheap and nasty’ whereas German cars were reliable and indicative of status and success. This was at least partly true.

I don’t think we’ve ever really moved away from those deep seated perceptions, and perception is reality as somebody once said. 

With sales as they are in parts of the world other than Europe and the UK, Lexus would be daft to prioritise our market at the expense of those where they are already a volume player imho. As long as they’re happy being a niche choice - a bit like Saab were - then I’m happy buying into a more exclusive and unusual brand.

[Shahpor]

For me, the answer is simple: Discounting the higher priced cars (~£60k+), of the mainstream you have the choice of 4 SVU's and 1 saloon.  And on that saloon exactly 1 engine choice.  So, for someone like me who doesn't want a SVU, my choice is the ES300h or the ES300h...

Nothing wrong with the cars themselves per se, but considering the number of models and engine choices competitors have, it is difficult to justify choosing something just because of lack of alternatives.

If Lexus had brought the new IS over here, there could have been a chance I wouldn't be driving a Kia at the moment.

[wharfhouse]

12 minutes ago, Shahpor said:

For me, the answer is simple: Discounting the higher priced cars (~£60k+), of the mainstream you have the choice of 4 SVU's and 1 saloon.  And on that saloon exactly 1 engine choice.  So, for someone like me who doesn't want a SVU, my choice is the ES300h or the ES300h...

Nothing wrong with the cars themselves per se, but considering the number of models and engine choices competitors have, it is difficult to justify choosing something just because of lack of alternatives.

If Lexus had brought the new IS over here, there could have been a chance I wouldn't be driving a Kia at the moment.

Exactly my feelings - I've made a decision to keep my IS 300h for the foreseeable future - at least until unreliablity rears it's head - much as I like buying new cars, the IS 300h still does everything I want (and more) from a car at the moment (my needs may change in the next few years) and so for me there wouldn't be a huge benefit in changing it right now other than some new toys. 

[First_Lexus]

20 minutes ago, Shahpor said:

So, for someone like me who doesn't want a SVU, my choice is the ES300h or the ES300h...

Let’s all just pause for a moment of quiet reflection before this thread becomes an inevitable twenty page argument about whether the 300h engine is powerful enough, or the pros and cons of saloons vs SUVs…😆

[Shahpor]

3 minutes ago, First_Lexus said:

Let’s all just pause for a moment of quiet reflection before this thread becomes an inevitable twenty page argument about whether the 300h engine is powerful enough, or the pros and cons of saloons vs SUVs…😆

Each to their own and if others are happy with their cars then I am pleased for them.

Having said that, it wouldn't surprise me if there were many more like me who just want a new version of an IS or GS450h.

The sad fact is that I thoroughly enjoyed my time being a Lexus owner, so miss being one..

[First_Lexus]

10 minutes ago, Shahpor said:

Each to their own and if others are happy with their cars then I am pleased for them.

Having said that, it wouldn't surprise me if there were many more like me who just want a new version of an IS or GS450h.

The sad fact is that I thoroughly enjoyed my time being a Lexus owner, so miss being one..

Yes, fully agree. A few years ago I owned a Honda Accord, which I loved. I wanted a replacement but Honda had decided not to import the new version to prioritise SUVs instead. Sounds familiar. 

I spoke with the dealer and Honda direct. At the time I was a moderator on the HondaKarma forum, which had grown out of Accord Owners Club. Honda were clear that if sales had been good enough, they would have imported a new Accord - but simply the numbers didn’t add up for them to import a range for such limited sales.

I guess it’s similar with Lexus. If they were selling enough IS then they’d surely import the replacement, but it’s a niche choice. On the other hand, it must be a bit ‘chicken and egg’ as if they don’t try…

Perhaps a case of “If you build it, they will come.”

[dutchie01]

Simple really. In UK and Europe Lexus is just not competitive enough, full stop.

It seems to me that Lexus productmanagement has lost the plot some years ago and the hesitant adaption of electric propulsion could have delayed/iced all plans. 10/20 yrs ago Lexus had a clear goal in becoming the marketleader in NVH. 6 and 8 cylinders, isolation, buildquality stiffness and excellent high end materials for all touch and visual points in the cabin. Well, Electric motors give excellent NVH and everybody and his mother has them now except... Lexus. They are asleep with their eyes wide open and have the risk of beeing overtaken by the new competition from China. Polestar, Zeekr, Xpeng, Wuli to name a few. Thats where the competition is coming from together with the Koreans.

Current line up is extremely limited and has some issues.

Styling and overall package. The ES has extremely large overhangs front and rear and the rear end is very busy lots of lines combined with an eighties spoiler on the trunk. Inside some materials seem more toyota than Lexus. The UX is so cramped in the rear i can hardly sit in the back. Their all time bestseller IS has left the building. The new NX has a strong visual focus on the front like the car is leaning forward and is not as practical as the RAV4 on which it is based. The new RX, well what is the difference with the NX? and again the front looks weird. The LC is brilliant and the only car in the line up with a stand alone chassis all others are Toyota based. And lets forget the LS as nobody wants that anyhow. As Lexus is going downhill the Koreans are shooting up with fresh styling plenty of choice, lots of models and so on.

Engines. Great choice between 4 and 4 pots. While the whole of Europe screams for EV Lexus is not delivering and offers 4 pots in combination with a CVT that 90% of the people do not like.

Infotainment. Disastrous, slow and with an architecture to drive you crazy. Current generation is better but still lags behind the competition and the big upright screen looks soo toyota.

A successfull company delivers what customers are asking for and Lexus just seems to miss that point

 

 

 

 

 

 

 

 

[PRT68]

Yep, same as me. Had an ISF, and now an RC300h. Don't want an SUV, despite having a couple as courtesy cars. An ES is too big for our requirements, and an IS is now obsolete.

Why not import the new IS? And why no estate versions of a model?

[rayaans]

I think there's multiple factors.

A number of people count the German brands as more premium. Only we know they aren't. 

The other issue is the lineup. There's no hatchback, no rwd saloons of C class or E class size for example. At the end of the day, the ES is still almost 5m long and it's seats don't drop.

There simply isn't enough choice for different types of buyers.

[wharfhouse]

28 minutes ago, First_Lexus said:

Yes, fully agree. A few years ago I owned a Honda Accord, which I loved. I wanted a replacement but Honda had decided not to import the new version to prioritise SUVs instead. Sounds familiar. 

I spoke with the dealer and Honda direct. At the time I was a moderator on the HondaKarma forum, which had grown out of Accord Owners Club. Honda were clear that if sales had been good enough, they would have imported a new Accord - but simply the numbers didn’t add up for them to import a range for such limited sales.

I guess it’s similar with Lexus. If they were selling enough IS then they’d surely import the replacement, but it’s a niche choice. On the other hand, it must be a bit ‘chicken and egg’ as if they don’t try…

Perhaps a case of “If you build it, they will come.”

We also had a Honda Accord Tourer for quite a few years and that was a very good load lugger - took us all over the UK and Europe for my daughter's sailing loaded to the gills and towing a boat! I was also sad about the Honda decision. I used to pop in and out of the HondaKarma forum for advice now and again.

Lexus stopped bringing the IS into a key segment that put Lexus on the map vs the German marques. The IS was at the time even becoming more accepted by the motoring journalists for the distinctive blend of what it offered! Sales were still (in Lexus numbers) reasonably strong with many existing IS owners waiting on the new model to make a change. The "excuse" that the ES was outselling the IS was IMHO just BS - of course, the existing IS was by then getting a bit long in the tooth and people would naturally have been putting off buying a new one whilst waiting on the new model launch - Lexus never gave the new model a chance to see if the numbers would bounce back from that pent-up demand. The ES is in no way a replacement for the IS (as Lexus have tried to claim) - as a car in it's own right I have no issues with it, but it's not an IS replacement for many reasons and not one that appeals to me as a replacement.

One can one still buy an RCF, LS or LC in the UK - how do the sales numbers for those work...?

Like one of the comments above it does seem like Lexus has lost it's way for a number of reasons - I hope they find it again so I can stay with the marque when I review my choices again (probably in a few years time).

[Las Palmas]

Lexus reliability reputation was one of the reasons that made me accept buying one and my wife liked the look of the CT. Having read about the economy of hybrid (mostly Prius) gave it a try to replace the Golf 2.0tdi DSG. We kept the Golf till 200.000km and it never broke down and we only had the service mentioned from factory. The CT is now 82.000km and if we keep it till 200.000 (which I doubt) it will be because it is not too big to find a parking space to, it does not look ugly and so far only recommended service (more expensive than the VW) have been made. Suspension, and comfort and many other little things make it better than the Golf, but hybrid is not to recommend in a country with mountains. The diesel was cheaper in fuel with same driving needs and driving same places.

Toyota is trying out hydrogen, and they have more cars in their program than Lexus, which is mostly making SUVs, so Toyota could be next. Also, Hyundai is on its way forward with interesting cars and having had 3 cars from Honda that actually were perfect in every way, that could be a brand I would be interested in. We had 3 from Nissan and while the 280ZX was wonderful, the next, the 300ZX not so much and the Micra was a town car only to drive for shopping, noisy but reliable. Had 2 BMW that were both poor quality build, had 4 MB and the only I remember for extra good quality was the 240D 3.0 with 5-cylinder engine.

Who know what will come before the CT is no longer what we want, but so far, we are pleased with it and as long as it performs well there is no reason to replace it.

The days when itching to get a new car at least once a year are over so the CT will stay with us.

I think that Toyota is keeping Lexus only as long as they sell well and after that make variants of their Toyota models so those that want luxury will have to buy more expensive of same model with more luxury and at higher prices, just like BMW, Mercedes and VW.

[cdmaskell]

As you stated reliability is the key to Lexus ownership. No car is perfect for everybody.  But I think as retired vehicle engineer,  Lexus/Toyota take some beating.  I migrated to an IS 300 when I couldn’t replace my Honda Accord in 2015. I thought nothing could beat the Accord, after owning 4. I was wrong, and let’s not forget the Accord’s ferocious appetite for rear brake pads and seized calipers and abysmal fuel consumption.  I am now on my 3rd ES. As I have stated previously, would love an IS with the refinement etc of the ES.

[dutchie01]

Seems everybody here wants to buy a car from Lexus that is not available. This includes myself as i was excited when i first saw pictures of the new IS, great looking car and no doubt i would drive that now. Alas it was not to happen.

I think beeing an old frame the car could no longer successfully pass the crash tests in Europe thats why it was pulled.

[wharfhouse]

4 minutes ago, dutchie01 said:

Seems everybody here wants to buy a car from Lexus that is not available. This includes myself as i was excited when i first saw pictures of the new IS, great looking car and no doubt i would drive that now. Alas it was not to happen.

I think beeing an old frame the car could no longer successfully pass the crash tests in Europe thats why it was pulled.

I doubt the reason that it was pulled was that it couldn't pass the crash tests in Europe given it continued to sell in the rest of the world - the decision IMHO was made by Lexus (Toyota?) management for other commercial (IMHO flawed - but who am I to argue) reasons...

[george72]

i moved over from a silky smooth BMW530D (2015) to a now brand new ES300h and have no regrets. The ES300h is not perfect, The CVT gearbox is no match for the 8 speed ZF in the BMW, nor are some of the materials eg. lost of hard scratchy plastics more aligned to Toyota than a luxury brand like Lexus. However, and it is a big however, there is currently no other brand that offers the bullet proof reliability that lexus does inc the 10 year Warranty and for this reason, the benefits still outweigh the negatives. 

The ES300H is lovely, but it is not all that practical and i totally understand why people would dismiss it.  

[Bluemarlin]

32 minutes ago, cdmaskell said:

As you stated reliability is the key to Lexus ownership. No car is perfect for everybody.  But I think as retired vehicle engineer,  Lexus/Toyota take some beating.  I migrated to an IS 300 when I couldn’t replace my Honda Accord in 2015. I thought nothing could beat the Accord, after owning 4. I was wrong, and let’s not forget the Accord’s ferocious appetite for rear brake pads and seized calipers and abysmal fuel consumption.  I am now on my 3rd ES. As I have stated previously, would love an IS with the refinement etc of the ES.

I agree that reliability is a key issue, and that was certainly behind my decision.

That said, a lot of premium car buyers (who buy new) are company car drivers, who only have the car for 2/3 years and    so aren't concerned too much about reliability. They don't always get the dealership experience either, as the fleet/leasing company will often collect and deliver cars for service. As such many will opt for the popular brands, which have a wider selection, like Jaguar, BMW, Mercedes, Range Rover.

[cdmaskell]

Very true Bill.

[Malc1]

50 minutes ago, dutchie01 said:

everybody here wants to buy a car from Lexus that is not available. This includes myself

my Hydrogen powered Lexus Ls 700 is I'm sure somewhere there on the horizon .  and indeed, why bother too much when the parent, Toyota is the absolute supremo of all manufacturers

Malc

[ColinBarber]

2 hours ago, First_Lexus said:

Perhaps a case of “If you build it, they will come.”

Toyota GB discontinued the IS, GS, Prius and Camry because the sales dropped off a cliff, before worldwide end of production. Partly because the majority now want SUVs and partly, IMO, because the 7 year model cycle is too long and they become uncompetitive before the new model is released.

However Lexus has never had as high a market share in the UK as it has had in the last couple of years, currently 2022 is at 1.9% (end Nov):

and the same for Toyota, currently 2022 is at 6.4% (end Nov):

 

[wharfhouse]

9 minutes ago, ColinBarber said:

Partly because the majority now want SUVs and partly, IMO, because the 7 year model cycle is too long and they become uncompetitive before the new model is released

Yes, the model cycle being long is very much IMO part of the issue - many people thinking of buying a brand new car (me included) often plan to purchase after the launch of a new model revision or at least not within a couple of years of a model run out - that was my plan with my IS 300h purchase - buy used (basically current model), keep it for two/three years and then buy the next model release within a year of launch.  However, when the model cycle stretches out too long and buyers have a shorter period in mind they are left are "hanging on" waiting on that new release and thereby killing sales of the run out model even though it is still on the market for perhaps another two years. For the IS you can see that decline from around 2009 to 2013 then the spike as the new Phase 3 was released followed by the decline in that around the 4/5 year mark - the point buyers start "waiting" for the next model.

Interesting that ES sales are still so low - they have hardly caught up with the run-out years of the IS - makes you wonder whether if the IS has been continued in the UK and the ES hadn't been launched in the UK whether the IS sales would actually have been higher than the current ES sales - lots of ifs and buts..."

[Linas.P]

Lexus did no become and will never become mainstream with their pricing and sales strategy in UK. They have (it seems deliberately) limited themselves with only few models and only few engines to never break out of niche... and Lexus price is generally horrible in Europe and even more horrible in UK.

There are only few markets where Lexus is mainstream - US is the main one, followed by Middle East... apart of that they have limited success in ruzzia (which obviously now ended), Japan, Australia and New Zealand. If we look for the reasons why they are successful in US (their main market), then we need to recognise that Lexus are specifically made with americans and their needs in mind, Lexus offers ALL their models there and generally all the engine and transmission (like AWD) options and they offer full customisation, and finally they are really really competitive on price and competes in every single niche with BMW/MB like for like. So as result for any given BMW/MB you have equivalent Lexus, with equivalent options, you can specify it anyway you like without being locked strictly into the trim options (they have trims, but most things can be specified individually) and Lexus generally costs like 10-15% less like for like than BMW/MB. In US getting Lexus is really no-brainer, it is cheaper, it is way more reliable and they have all needs and options covered. So it is no surprise they are successful in US - they simply offer better cars for less money. Likewise all the other markets I mentioned - they have full range of models, hence they are real market players, not leaders by they are genuinely mainstream where one could choose Lexus if they wanted. 

In Europe Lexus just doesn't make sense - it offers basically a single engine option (300h), it is on average 10-15% more expensive than BMW/MB, it has strict trim limits which can only hurt, it doesn't have some of best selling models and finally European CO2 and other related taxation just doesn't work for 300h. In short what Lexus has to offer in Europe and UK is genuinely uncompetitive, targeting niche and only exist to be "the other option", basically it is in niche with Alfa Romeo and Jaguar offering funky option to standard Audi/BMW/MB triopoly. Now sure Lexus has NX and RX which are their best selling models worldwide and which are genuinely competitive offerings, but one cannot expect to become mainstream with single model and mostly single engine. So in Europe even if there would be buyers there is simply nothing they can choose from, I know that very well myself - I would be in the market for Lexus but they simply have nothing to offer. The only care they have for sale in the segment where I would be looking is ES300h which is wrong wheel drive, wrong engine and genuinely too big for me. They have no entry level saloon, they have no coupe, they have no engines. IS/GS/RC discontinued, they haven't brought IS mk3.5 here, 350 never offered, AWD (in case of ES) not offered... so what I suppose to buy. I guess the only car remaining is LC500, but that is flagship model and out of most buyers range.. myself included.

Lexus generally relies on reliability, but truth to be told it DOES NOT MATTER for new car buyers. Most cars (except Tesla and Landrover) could easily last 3-5 years without major issues and all the issues are covered by warranty anyway, as such new car buyers who makes the market share honestly could not care less that Lexus are really reliable. It is only used car buyers who care, but they generally do not matter, because they are not the ones bringing in the money for the brand. So the logic is simply - bring the product people want and market it well, Lexus does neither of those things in Europe/UK. I assume they are not dumb and they have right people to know how to manage their markets, so it must be some decision made somewhere at the top not to put much effort into European/UK markets.

As for BEVs - I don't think that would have any impact in their standing. BEVs are still niche themselves - some 1% cars and maybe 10% of sales worldwide. So what is important here is that 99% of the cars and 90% of sales are NOT BEVs.