Toyota Motor Corp.'s Lexus, which took the U.S. market by storm, has conjured up little more than a cloudy future in Japan.

Sales of three Lexus models have been about 60 percent of the company's initial targets.

The automaker aims to catch up with German rivals with the top-of-the-line LS sedan, which is scheduled for release on Sept. 19.

In the U.S. luxury car market, the Lexus brand has been the top seller for six years in a row.

Analysts say the key to success will be how to strike a balance between expanding sales and maintaining the exclusive brand image.

Lexus dealerships started operations on Aug. 30, 2005. Cumulative sales of Lexus models in Japan were 21,000 units as of the end of June.

During the first six months of this year, Lexus sales in the U.S. market increased by 6 percent year on year to 150,000 units.

Despite the recovering Japanese economy, however, domestic sales were a disappointing 11,000 units during the same period.

The s***nant performance is partly attributed to a delay in introducing the flagship LS sedan, formerly sold as the Celsior in Japan.

The three Lexus models on sale are: the IS sporty sedan, the former Altezza; the GS luxury sedan, the former Aristo; and the SC convertible coupe, the former Soarer.

Toyota completely redesigned the models for Lexus introduction.

Sales have been hampered by a recall of about 10,000 GS and IS models for defective seat belts, announced in April.

In July, Toyota started to accept reservations for the LS sedan.

Some Lexus dealers, however, cannot afford to promote sales to existing or potential customers of luxury imported vehicles, which were the expected rivals for Lexus cars.

A senior official of a Lexus dealer in Nagoya, one of the most competitive markets for luxury vehicles, said that the best they can do is try to win buyers who otherwise would move up to a high-end Toyota brand model.

Part of the reason for the poor sales, industry officials say, is Toyota's policy of prohibiting individual Lexus dealers from placing advertisements independently.

Toyota wants to protect the Lexus' exclusive brand image by using standardized ads.

"(Toyota) has restricted promotions by Lexus dealers by prohibiting them from taking individual marketing strategies," a senior official of a sales company said.

While Lexus dealers compete among themselves to retain their customers, European brands are expanding their customer bases.

A typical example is BMW AG of Germany.

BMW Japan Corp. has s***ed a nationwide campaign twice since August 2005, shortly before the Lexus domestic debut.

BMW marked record sales of 23,000 units in Japan during the first half of this year.

The 3 Series, the automaker's volume model, expanded the customer base by attracting a large number of female owners, which now account for about 30 percent.

The figure compares with a little less than 10 percent among owners of the IS, the primary rival of the BMW 3 Series.

BMW Japan President Jesus Cordoba said the company will continue to invest to lure new customers.

In response to the LS's scheduled debut in September, Toyota has allowed Lexus dealerships to hold individual promotions at first-class hotels in an attempt to better appeal to women.

Toyota has also relaxed restrictions on after-sales services for Lexus vehicles.

Previously, the automaker banned Toyota dealerships, located within a 50-kilometer radius of a Lexus dealer, from providing repairs and inspections of Lexus vehicles. Toyota has decreased the geographical limitation to 30 kilometers.

Yasuhiko Yokoi, Toyota's managing officer in charge of Lexus domestic sales and marketing, said the automaker refrained from high-profile marketing during the past year.

For example, Lexus dealerships are uniformly designed to create a dignified atmosphere and offer sophisticated customer services.

The latest measures introduced by Toyota will change the marketing strategy which had focused on fostering an exclusive brand image.

Toyota plans to add new models to the Lexus line beginning in 2007.

In one example, Toyota plans to add a convertible version of the IS sports sedan as early as 2008 to attract younger customers.

Longer-term projects include a two-seater sports car that would feature a 5-liter engine based on a V-10 formerly used in Formula One race cars <!-- END TEMPLATE: bbcode_quote -->

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