Why Lexus is yet to break into the UK mainstream

[First_Lexus]

6 minutes ago, Mr Vlad said:

I looked Into transporting a car from Oz to here. To my surprise there are companies dedicated to do this. One off put is 2 forms of tax. Import and vat so an extra 30% on top plus the transporting and the 2 tests before it would be allowed on our roads makes it unfeasible unless one is oh so dead set in getting one.

RC-f at 24k? Wow bargain. Just need a lottery win now.

Over the years I’ve come across a couple of companies that specialise in importing cars - mainly classics - from Australia and South Africa. The big benefit is dry and (generally) salt free climate. I assume that for a rarer 50s/60s/70s classic car the costs make more sense as good RHD examples are either very rare or non-existent here.

At one stage a few years ago I was very tempted by a South African sourced 1974 Toyota Corona automatic from one of those companies.

[Linas.P]

1 hour ago, Mr Vlad said:

I looked Into transporting a car from Oz to here. To my surprise there are companies dedicated to do this. One off put is 2 forms of tax. Import and vat so an extra 30% on top plus the transporting and the 2 tests before it would be allowed on our roads makes it unfeasible unless one is oh so dead set in getting one.

RC-f at 24k? Wow bargain. Just need a lottery win now.

30% extra tax is A LOT... and suddenly makes cheap £24k RC350... into not so cheap £40k RC350... so I agree - sounds unfeasible. 

[ganzoom]

On 1/8/2023 at 9:28 PM, Spacewagon52 said:

How did the people, taking part in this thread, first come to Lexus?

Did any of you buy one as a company car choice?

How many of you bought new for your FIRST Lexus?

We choose the IS300H over a 330d, diesel XF because the hybrid drive train in the IS300H was different and work well.

A few years later I was given a RX450h for a day, at the time we had just put in the order for our current Tesla Model X. The RX is beautifully built but the drivetain cannot touch any EV drivetrain for smoothness or efficiency.

Right now if we were to replace either car Lexus woudlnt even get mentioned, for the simple fact they offer pretty much ZERO EVs which are competitive on price, performance, efficiency or features.

The only thing Lexus can offer different is better reliability, which counts for little when new cars all come with 3/4 year warranties now.

Lexus need something else apart from reliability to stand out, Hyundai/Kia are doing a very good job of going upmarket on the back of producing new EVs that people want to buy. Tesla are taking sales aways from the German brands but that's really created a health competition. BMW and Mec are coming out with some really good competitive EVs now, so Tesla is driving down the price route which is really pushing sales figures up.

Lexus is very quickly becoming an irrelevance in the new car market without something to differentiate themselves from the increasingly competitive EV market.

[Roger Bill]

25 minutes ago, ganzoom said:

The only thing Lexus can offer different is better reliability, which counts for little when new cars all come with 3/4 year warranties now.

Having had the frustration and inconvenience of waiting for the Mercedes breakdown service and of the now constant feeling of uncertainty of whether I'll reach my destination I have to disagree!! Can't wait for my new Lexus to arrive and to once again have a car I can rely upon to consistently perform the basic function of getting from A to B.

I agree and am pleased to see that competition in the EV market is hotting up. At present there isn't an EV that meets my criteria but I'm hoping that there will be when the time comes for my next car purchase.

[08ISF]

I don't think Lexus will ever break into the UK mainstream and I also think it would be a mistake to try. Lexus cars are expensive  and would not be attractive to company car buyers because of:

High lease costs.

High BIK figures.

The motoring press are a bit sniffy about Lexus and generally down rate them.

There is a perception among the population in general that the German makes are the epitome of quality (we know different!).

Company car buyers don't care about reliability. If it breaks they just get a loan car.

Their marketing is woeful . "Experience amazing" The cars are not "amazing" they are a very good  product whose  qualities will grow on their owners with time, not necessarily on a half hour test drive.

They don't offer the range of models  necessary to appeal  to a wide audience.

Lexus appeal to the few who care about quality, reliability and good service and are prepared to pay for it. If Lexus try to go mainstream those qualities will have to be diluted or sacrificed.  Look at the example of John Lewis , they were perceived as being a little dearer, but you got good service , no arguments with warranties etc and their stuff was generally good. But they went chasing the mainstream and look where it got them.

I have never bought new, I have always bought 1 -4 year olds  at a saving on new, secure in the knowledge that I could get a cast iron warranty for one year and then extend that on a 2 yearly rotation for about  £1000 until I was ready to change at about 7-8 years. This has worked since 2009 but has now been scuppered by the Relax warranty and despite assurances from Lexus I am not sure about how easy it will be to claim on it.

Unfortunately I think Lexus are being driven down the mainstream route by their management, the Relax warranty is a case in point, trying to get lots more people into the workshops where they can be reminded how expensive that is and then find that their "warranty" doesn't actually cover what they think it does. Cue exodus.

I think Lexus would be better staying as "reassuringly expensive"

Just my opinion.

 

 

[Gary H]

A very good post, Graham. I can only echo much of what you said, there. Qualities which grow on you over time particularly resonates with me. I also very much agree on a limited model range. They do miss a small saloon/estate. 

I'll admit I was a little surprised at the service cost the very first time I took my UX in for a service. I generally I overprice my own estimates I have in my head but this was the very first occasion that I can remember (certainly in a good number of years) where I underestimated it. Fortunately I'm in a position where I can stomach the cost but it wouldn't surprise me if others have been caught out and then subsequently moved away from the brand once they changed cars.  

In much more recent times there is of course the issue of building and supplying new cars. Of course it's a widespread problem affecting near enough every manufacturer, but it does seem to have hit Toyota/Lexus particularly hard - more so than any other manufacturer, in my opinion. I do often wonder how many sales they have lost over the last twelve months because of the ongoing issue with very long lead times. It's something I've discussed with my father quite a few times recently (someone who spent most of his working career in sales up until he retired) and he wonders how Lexus is actually surviving at the moment. Yet alone not making it mainstream.

[Spacewagon52]

6 hours ago, ganzoom said:

 

The only thing Lexus can offer different is better reliability, which counts for little when new cars all come with 3/4 year warranties now.

Lexus need something else apart from reliability to stand out,

I understand your viewpoint Gang but I must disagree to some extent. Reliability is a major factor if the car cannot be repaired. This is the case with some EV's such as the ID3. I am on the MGEV forum and the complaints regarding the dealerships unable to solve software issues is quite concerning. I seriously considered an MG5 but as I intend ti keep the car long-term I was put off by some of the experiences of current owners. 

You kindly provided a comprehensive list of issues with your Tesla. If you are a company car user, then I agree, it does not matter if you buy a pup. If you are a private buyer, who can afford to change the vehicle every three years then that is not a big issue. Unless you find your car constantly in the garage. One MG4 owner's car was in the garage for 5 months!

Most Lexus owners stick to the brand, not only for reliability, but for quality. Toyota has not gone down the EV route, which is somewhat surprising, as they have lots of experience with batteries.

[Las Palmas]

32 minutes ago, Spacewagon52 said:

Toyota has not gone down the EV route, which is somewhat surprising, as they have lots of experience with batteries.

Maybe Toyota is a bit smarter than many other companies. When speaking gigantic batteries glued together in order to be reliable, they are risking customers that are not happy when having small accidents that damage Battery just a little and the insurance company find car not worth repairing. The smaller hybrid batteries are not so expensive that car will not be repaired just because the Battery is damaged.

Happy customers are returning customers. A reputation takes long time to get, but short to lose. LS, IS and some other of the older models made it, it many problems with newer models, that reputation may get hurt.

[ganzoom]

@Spacewagon52 The question of the post was why Lexus just cannot increase volume in the UK. Tesla now sells more cars than Lexus even in the US.

Reliability doesn't sell to the mass market any more. Lexus needs something else to differentiate the brand.

 

[ganzoom]

On 4/16/2023 at 11:45 AM, 08ISF said:

I don't think Lexus will ever break into the UK mainstream and I also think it would be a mistake to try. Lexus cars are expensive  and would not be attractive to company car buyers because of:

High lease costs.

High BIK figures.

The motoring press are a bit sniffy about Lexus and generally down rate them.

There is a perception among the population in general that the German makes are the epitome of quality (we know different!).

Company car buyers don't care about reliability. If it breaks they just get a loan car.

Their marketing is woeful . "Experience amazing" The cars are not "amazing" they are a very good  product whose  qualities will grow on their owners with time, not necessarily on a half hour test drive.

They don't offer the range of models  necessary to appeal  to a wide audience.

Lexus appeal to the few who care about quality, reliability and good service and are prepared to pay for it. If Lexus try to go mainstream those qualities will have to be diluted or sacrificed.  Look at the example of John Lewis , they were perceived as being a little dearer, but you got good service , no arguments with warranties etc and their stuff was generally good. But they went chasing the mainstream and look where it got them.

I have never bought new, I have always bought 1 -4 year olds  at a saving on new, secure in the knowledge that I could get a cast iron warranty for one year and then extend that on a 2 yearly rotation for about  £1000 until I was ready to change at about 7-8 years. This has worked since 2009 but has now been scuppered by the Relax warranty and despite assurances from Lexus I am not sure about how easy it will be to claim on it.

Unfortunately I think Lexus are being driven down the mainstream route by their management, the Relax warranty is a case in point, trying to get lots more people into the workshops where they can be reminded how expensive that is and then find that their "warranty" doesn't actually cover what they think it does. Cue exodus.

I think Lexus would be better staying as "reassuringly expensive"

Just my opinion.

 

 

Without volume though it almost impossible to develop new cars. Even Porsche who are easily far more exclusive than Lexus based on price is been forced to chase volume.

The only manfactures that can survive on low volumes along require bankrolling from a bigger group or government. 

Lexus ofcourse is already bankrolled by Toyota, without Toyota Lexus wouldn't exist anyways. The important question for Lexus is what senior management in Toyota thinks about the situation.

I suspect Toyota are fine keeping Lexus going regardless of cost, as compared to Infiniti or Acura, Lexus is the only Japanese 'premium brand that has broken through the US market. Infiniti gave up in Europe, and Acura never got started.

Lexus are completing with BMW, Tesla, and Merc in the US so very much a mainstream brand versus a niche brand. 

[ColinBarber]

On 4/16/2023 at 2:22 PM, Gary H said:

In much more recent times there is of course the issue of building and supplying new cars. Of course it's a widespread problem affecting near enough every manufacturer, but it does seem to have hit Toyota/Lexus particularly hard - more so than any other manufacturer, in my opinion.

Toyota moved from just in time to holding stock for many components in Japan. Their vehicle availability was good at first and they increased market share in the UK when others couldn’t supply. Their stock ran out and so have a delayed availability issue. 

[ColinBarber]

6 minutes ago, ganzoom said:

Lexus are completing with BMW, Tesla, and Merc in the US so very much a mainstream brand versus a niche brand. 

Tesla X and S are also niche. The 3 and Y are more competing against Toyota as they aren’t luxury vehicles. 

[ganzoom]

12 minutes ago, ColinBarber said:

Tesla X and S are also niche. The 3 and Y are more competing against Toyota as they aren’t luxury vehicles. 

A 3/Y cost the same as a ES, UX, NX, which makes up a large part of Lexus sales world wide.

[dutchie01]

i dont think Tesla is competing with Toyota at all. Different demographic and T has no EV  Tesla created their own market.

[Spacewagon52]

1 hour ago, ganzoom said:

@Spacewagon52 

Reliability doesn't sell to the mass market any more. Lexus needs something else to differentiate the brand.

 

I am not sure unreliability is going to sell after people have been bitten. If you personally experience a car that needs many visits to a garage for repair or spends weeks waiting for a software upgrade, I think you might have a different opinion on reliability. 

Possibly it may be an age thing on my part, as I remember the motoring experiences of the early 70's.

[08ISF]

For me reliability is key. A car that will go round the Nurburgring in under 8 mins is no good if it is going to spend most of its life in the workshop ( no names!). I am afraid that I  and most of the people on here are in a minority as the motoring press are obsessed with performance and style and that is what most people seeking a new car refer to. The other elephant in the room is the Alan Partridge issue, from p*** taking references made by a certain comedian  many years  agoabout Lexus cars which fixed them in the national psyche as a bit naff and boring.

I am personally happy for Lexus to remain in its little niche. All we need to do now is convince the criminal fraternity that our cars are not worth nicking.

Edited April 18, 2023 by 08ISF
grammar error

[Mr Vlad]

Lost touch with this thread but the answer to the question why Lexus hasn't hit the mainstream.

When the Lexus brand was first thought of its idea was to be the ultimate luxury car. Marques like Rolls Royce and Bentley ate Not mainstream cars. They never will be. Lexus is in the same marque as the two mentioned above. 

Lexus will never be mainstream because they are a Luxury brand. Luxury is Not mainstream. 

[wharfhouse]

30 minutes ago, 08ISF said:

For me reliability is key. A car that will go round the Nurburgring in under 8 mins is no good if it is going to spend most of its life in the workshop ( no names!). I am afraid that I  and most of the people on here are in a minority as the motoring press are obsessed with performance and style and that is what most people seeking a new car refer to. The other elephant in the room is the Alan Partridge issue, from p*** taking references made by a certain comedian  many years  agoabout Lexus cars which fixed them in the national psyche as a bit naff and boring.

I am personally happy for Lexus to remain in its little niche. All we need to do now is convince the criminal fraternity that our cars are not worth nicking.

Yes, I think the number of Lexus being nicked may be having an impact on insurance renewal premiums. My Lexus IS 300h insurance has gone up 37% over last year despite no changes whatsoever on my side. I have run quotes on the comparison sites and none of them is coming in less than my current provider (Tesco Insurance) has quoted (i.e. 37% higher than last year) and so it's not the usual insurance games of putting up the renewal premiums. On the other hand my wife's Toyota Yaris renewal premium (also with Tesco Insurance) has come in the same as last year (again with no changes year-on-year). So IMHO something going on with Lexus cars and premiums. So yes, even though I don't have such a worry about my car being nicked I really hope that Lexus sort this for new cars to make sure we are not all paying a higher insurance premium that we need to.

[dutchie01]

29 minutes ago, Mr Vlad said:

 

When the Lexus brand was first thought of its idea was to be the ultimate luxury car. Marques like Rolls Royce and Bentley ate Not mainstream cars. They never will be. Lexus is in the same marque as the two mentioned above. 

Lexus will never be mainstream because they are a Luxury brand. Luxury is Not mainstream. 

Oh how things have changed. 40 years ago Bentley/RR were facing mainstream models like the ford cortina, citroen 2cv, you get the picture.( had them both!) mainstream now is BMW/Audi etc. Luxury has come downward as that is what people want. For themselves and the neighbors. It also depends on the market, in some markets like the States or Asia Lexus is mainstream and sells like hotcakes. Over here it is very much niche but is this because of lack of sales or strategic strategies one might wonder..

( You serious by placing Bentley/RR and Lexus on thesame level?)

[ColinBarber]

14 hours ago, ganzoom said:

A 3/Y cost the same as a ES, UX, NX, which makes up a large part of Lexus sales world wide.

Comparing on price, ICE vs EV doesn't work because EVs cost more to produce. An ICE 3/Y would be £10k-15k cheaper making much more comparable with a Toyota rather than Lexus, especially as they are volume vehicles.

[Mr Vlad]

Absolutely Bernard I place Lexus in the same league as Bentley and Rolls Royce. 

I think you're mistaking luxury and 'toys/tech' in cars. It's the tech etc that customers want. Luxury cars are out of reach financially speaking to the average person. Me? I'm average and no way can afford a new Lexus.

My car history is that 95% of my cars have been top of the range. The luxury versions. I've never bought new but cars over 5 years old with the exception of just one car. A 6 month old MG Maestro an F plate.

As for Lexus selling like hot cakes elsewhere. That's easy coz over there the choice is greater because the customer base is HUGE compared to this out small island. 

[Mr_Groundhog]

I wish they had kept the IS instead of the ES which is too large for UK streets and driveways
I like the thing, but I would not upgrade to an ES from my IS because driving it in our 16th century urban layouts feels I'm driving the Titanic through the hallway of my house

[Linas.P]

43 minutes ago, Mr_Groundhog said:

I wish they had kept the IS instead of the ES which is too large for UK streets and driveways
I like the thing, but I would not upgrade to an ES from my IS because driving it in our 16th century urban layouts feels I'm driving the Titanic through the hallway of my house

You just need to be careful with icebergs and it will be alright. 

[Bluemarlin]

On 4/18/2023 at 12:10 PM, dutchie01 said:

 mainstream now is BMW/Audi etc. Luxury has come downward as that is what people want. For themselves and the neighbors. It also depends on the market, in some markets like the States or Asia Lexus is mainstream and sells like hotcakes. Over here it is very much niche but is this because of lack of sales or strategic strategies one might wonder..

 

I think in the UK it's luxury labels that people want, rather than the luxury itself, which is why BMW/Mercedes/Audi have moved downwards with lower end/more affordable models. People want to say they drive a Mercedes, and so will buy a basic one over a top spec Ford.

In the US, Lexus had the advantage of Toyota being popular, possibly because they're a huge manufacturer there, and so offering a premium/aspirational variant, under an exclusive luxury brand, was a natural fit.

I think it's unrealistic to compare Lexus with the likes of BMW/Merc/Audi in terms of mainstream, as the former now have a wider range to capture a larger market, whereas Lexus and Toyota are split, but cover an even wider range in total.  So you can buy an entry level BMW, which is an entirely different car, but more a luxury label than a luxury car. Whereas entry level for Lexus is Toyota, where you can often buy similar cars, but in a less luxurious form. For example, you can buy either a Toyota SUV or a Lexus one, but with the other brands an SUV is at the premium end only.

In other words, there's no brand dilution with Lexus, so as a stand alone brand it will never be mainstream. However, if you treat Lexus/Toyota as a whole, then it's an entirely different business model, which I think is a good one.

[Linas.P]

12 minutes ago, Bluemarlin said:

I think in the UK it's luxury labels that people want, rather than the luxury itself, which is why BMW/Mercedes/Audi have moved downwards with lower end/more affordable models. People want to say they drive a Mercedes, and so will buy a basic one over a top spec Ford.

In the US, Lexus had the advantage of Toyota being popular, possibly because they're a huge manufacturer there, and so offering a premium/aspirational variant, under an exclusive luxury brand, was a natural fit.

I think it's unrealistic to compare Lexus with the likes of BMW/Merc/Audi in terms of mainstream, as the former now have a wider range to capture a larger market, whereas Lexus and Toyota are split, but cover an even wider range in total.  So you can buy an entry level BMW, which is an entirely different car, but more a luxury label than a luxury car. Whereas entry level for Lexus is Toyota, where you can often buy similar cars, but in a less luxurious form. For example, you can buy either a Toyota SUV or a Lexus one, but with the other brands an SUV is at the premium end only.

In other words, there's no brand dilution with Lexus, so as a stand alone brand it will never be mainstream. However, if you treat Lexus/Toyota as a whole, then it's an entirely different business model, which I think is a good one.

I partially agree with you... especially the first point - people do indeed buy entry-level cars from Luxury brands and it is sometimes amazing how basic the BMW, MB or especially Audi gets. Every single MB E-Class and C-Class coupe or convertible in my area are 220d variant (not to be confused with IS220d, but still as shaite). 

What I disagree with however is that Lexus is any different - the entry-level Lexus are as well amazingly basic, even higher spec trims (like F-Sport) were paired with unbelievably nasty poverty-line 6-Speaker audio (worse than contemporary Ford Fiesta) in Lexus RC and IS. Lexus CT was very basic in lower specs. to the point where both Golf and Corolla actually had better equipment for the same or lover price. Even looking at what is being bought today - most people are still getting UX which I always found hard to justify having Lexus badge over just being little bit less ugly looking Toyota CH-R. If ES, CT, UX being picked directly from Toyota with minimal attempts to uplift them is not brand dilution then I don't know what is... 

So the issue with Lexus not being in mainstream is NOT the lack of basic options with premium badge on them, quite opposite - the Lexus has no models to aspire to. When somebody get's MB C220d Coupe AMG pack, it is because one cannot tell them apart from C300 or even C43 AMG... i.e. people aspire to have nice looking car for cheap which looks faster and better than it is. Same for BMW - when people get BMW 420d M-Sport, it is because it looks very similar to 430i or 440i or whatever higher-end model it is. The problem for Lexus is that when one buys say IS300h - there is nothing to aspire to... there is no IS250, IS300, IS350 in UK... so when you get IS300h, everyone know you driving hybrid which takes a minute to get to 60mph (yes I am being hyperbolic). Yes Lexus has F-Marque, but I have argued many times that the gap between say RC-F and RC300h is way too big for people to aspire to anything. It is not like people get aspired to LC500, comes into dealership and picks UX200h as if somehow that is "close enough". So the Germans got their line-up complete and line-up progress clear, the is clear pecking order, clear ladders where one can get on low enough step when getting 10 years old 320d and then year by year upgrade in small increments until they get all the way to M3, M4 or M5, that is why they are mainstream as people who choose to be with the brand can always find a model that suits their needs and capabilities to upgrade. In Lexus there is basically only ON and OFF switch - either you go for practical and slow hybrid, or you are propelled directly into space with 5L V8... and nothing in between. I myself find "slow" hybrids unattractive, but at the same time I am not sure I really want to commit driving 5L V8 to the shops.