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Lexus Struggles with “Cadence, Product, and Powertrain”

Lexus LC Convertible

Automotive News has published its full interview with new Toyota North America CEO Ted Ogawa after posting an except last month, and it’s a fascinating read from start to finish. Of course, we will focus on the Lexus-specific information:

Ogawa: I have no worries about the Toyota lineup, but in the case of Lexus, the cadence is an issue. So for this year, the LC convertible is new. Profitwise, it may be OK, but in this sense, the Lexus dealer body wants to see more product sooner.

AN: How will you change that within Lexus?

Ogawa: We need to change the cadence and the product and the powertrain. Cadence is a planning concept, so that’s a No. 1 priority. And then product, next to the powertrain, right now is a second order.

On a day when Toyota announces two all-new vehicles (the Sienna and Harrier/Venza), this is an especially poignant statement. With only the LC Convertible for Lexus this year, how can the brand maintain any positive momentum?

There’s more from the Ogawa interview:

AN: What do you think ails Lexus? Where is the weak point? Is it something that can be fixed with product?

Ogawa: Yes, product and the cadence, and No. 2 is the cost competitiveness. Aggressive incentives from German brands in particular are impacting the market. So we need to change the luxury market, which has been tough for us.

Customers rely on the quality of our products, but dealers have issues with cadence. I can improve product and cadence because those are in my hands. But I cannot control the market, so that’s very difficult, and I don’t have the right answer yet for that.

It’s refreshing to see an executive speaking so candidly about the issues surrounding the Lexus brand, and it’s an accurate portrayal of the current situation. Unfortunately, it doesn’t appear there are any easy fixes, nor is there any solution on the immediate horizon.

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