This is a really good conversation and I enjoy the perspectives being shared here - global, Japanese nostalgia, competition changing, etc.
Around the era of L-Finesse in ~2012, it became clear to me that Lexus was settling into a more authentic Japanese identity, which is something I had been hoping for. Now in 2020, as some of us look at the brand and say, "Lexus is just becoming more Japanese, and going the route of Acura and Infiniti," I'm just not sure that's really a good explanation. And is it a good plan?
If we're talking about the idea that "Lexus is shifting to become more like Acura and Infiniti," it needs to be realized that both of those are struggling brands, they are not in nearly as many global markets as Lexus, and neither has historically been as profitable as Lexus. Part of Lexus' success has been the massive investment that Toyota made in products like the LS (flagship), IS (brought young buyers to the brand) and GS (aspirational, mid-level performance sedan) as halo models offset by core/cash cows like the ES, RX, GX and LX which are Toyota badge/platform engineering exercises.
In the context of Japanese luxury brands, Lexus is a brilliant example of "You have to spend money to make money." Nissan and Honda never invested in Infiniti and Acura the way that Toyota invested in and built Lexus. The results and consequences of those decisions are obvious. So saying that Lexus is going the way of "Toyota+" with implied/observed lower levels of investment is concerning to me because I wouldn't say it has worked well for Infiniti or Acura who struggle to turn a profit and are constantly reinventing themselves every 3 years to try to stay relevant.
With that said, I do still think there is a way this plan can work. Toyota is stronger than it has ever been, and much stronger than Nissan or Honda, so if we want to talk about scaling up mainstream products, Toyota should be better at it than the other two. But I think the question becomes how far does that go? And how long do we run this experiment before we decide it did or didn't work - and how much damage does that do to the brand? I understand the demise of the GS and see the opportunity for the ES to fill a much larger gap and make the GS irrelevant. It seems to me that Toyota feels so strongly about the capabilities of TNGA FWD platforms that they can replace RWD products with them. Maybe that's true, but we are still waiting to see the results of this thinking for Lexus. GS was cancelled late term so the ES was compromised as a result, and the clock is ticking for the NX and RX.
The RX and NX are in particularly vulnerable positions IMO because now the RAV4 and Highlander and better than they've ever been, the RDX, MDX and QX60 are already "luxury lite" offerings that compete at the lower end of the price scale, and that is starting to leave Lexus in no-man's-land. I think the formula for the next NX is pretty simple, but the RX formula is nearing the point of needing a revolution instead of an evolution to stay competitive. A $50k FWD Toyota-based crossover with sub-300hp is going to be fighting off competition from all sides: below, alongside and above. RX used to have a unique identity and was a well executed premium product. The next one needs to return to that formula or there will be even more trouble for Lexus. The world has not stood still, especially not in the compact and midsize CUV segments.
If the upcoming ES, NX and RX come with truly next-gen powertrains, hardware and technology strapped into an up-leveled TNGA-K execution, they will be a success. I'm talking about torque vectoring AWD, a new ~300hp turbo 4cyl, 10ATs, new best-in-class hybrids and plugins, an uplevel ~375-400hp option for ES and RX, safety technology, and truly original Japanese execution for their interiors. But past performance is the best predictor of future success, and all of those products have historically been Toyotas with a little more sound deadening, leather and bigger screens. Toyota seems to be getting the best of everything while we wait to see what Lexus has in store, which is letting current products decay past the point of being competitive, and creates higher expectations for next gen products - from dealers, buyers and enthusiasts.
To me, wading downmarket is a pretty big risk for Lexus who has earned their riches being the most premium Japanese luxury brand. And how did they do that? By investing more in differentiated products. Maybe they can stay the course with the help of TNGA, but it's a pretty big risk. We're still waiting for product execution as a way to judge this strategy. Lexus has kept us waiting for a long time already, and foolish pet projects like hoverboards, jets, boats and rewards programs are not excuses for a lineup that's uncompetitive, and it casts greater doubt that the company knows what they are doing. But let's hope they do. I think it can be done right, but we're going to need some proof of that pretty soon...
