Few auto analysts and industry insiders would have predicted the success that Toyota's Lexus brand has achieved. Twenty years ago, the idea of a Japanese premium brand that would aim squarely at the established high-end players — namely, Mercedes — only in the North American market was sort of amusing. Introduced in 1989 as 1990 models, the original LS 400 was an S-Class copycat, the ES 250 a pricier clone of the Camry. That LS, like many Lexus models until the brand was formally established in Japan four years ago, was a rebadged home-market Toyota. But to us, it was brand new, and shocking that it could offer so much luxury for just $35,000, nearly $20,000 less than a base Mercedes 350SE. Lexus sold 16,000 LS and ES sedans from 81 dealerships that year.
Today's LS 460 and ES 350 are still the respective S-Class chaser and gussied-up Camry the cars were 20 years ago. But both of these cars have stolen hundreds of thousands of sales away from Mercedes, BMW, Audi, Jaguar, Cadillac, and Lincoln dealers in far less time. The secret, in addition to an obsession with quality, reliability, and undercutting competitors by thousands of dollars at a time? It's the "Lexus Covenant," a motivational poem straight from the company's general manager Mark Templin.
"Lexus will do it right from the start. Lexus will have the finest dealer network in the industry. Lexus will treat each customer as we would a guest in our home. If you think you can't, you won't... If you think you can, you will. We can, We Will."
They did. Now there's 227 dealerships peddling everything from M3-fighting sedans to hybrid crossovers (Lexus kicked off the luxury crossover segment with its best-selling RX in 1999). The phrase "Lexus-quiet," the industry superlative bestowed on cars with superb road isolation, literally wiped out Cadillac's "standard of the world" title. Nissan launched its Infiniti brand two months after Lexus, and while Acura had been around since 1986, it hadn't set its competitive sights so high.
Hyundai, which rose from trash to economy car fame by studying Lexus, is now trying to compete with them with its Genesis sedan, and soon, the ultra-lux Equus. Even though Hyundai famously killed a $10 billion proposal to create its own "Lexus" nameplate, the company is achieving high rankings in quality surveys by following much of the "Covenant." Even Buick is jet-set on fighting the ES 350 with its 2010 LaCrosse, and may actually have a good chance.
Despite its common, ultra-conservative designs (modern exceptions being the IS-F and SC 430), languid driving dynamics, and tendency to rebadge less expensive Toyotas (the LX Land Cruiser and ES Camry, among others), Lexus, while afraid to take risks, has stuck to what works. Everyone else in the industry, at some point or another, has wanted to work like that, too.
Out of the whole lineup, I'd take only the 416 horsepower IS-F, a fully decked out LS or perhaps the new 2010 IS C. The rest of the lineup, while very competent, is far too boring. A greater emphasis on leading the luxury segment through bold design and performance will see Lexus really jump.
That will mean occasionally dealing with critics hell-bent on strapping a company's chief designer to a 10,000 gallon tanker and throwing him or her off a bridge while engulfed in flames. Chris Bangle, former design chief at BMW, knows that all too well. But he also knows what it's like to influence other automakers — and catch them unaware with standouts like the X6 and upcoming 550i GT.
The LF-A supercar, which promises to run against the best from Mercedes AMG, Aston Martin, and Ferrari, is likely to push Lexus in this direction. It can't come fast enough.
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