IS Potentially Being Cancelled After The GS

[Gecko]

And to make things worse, Lexus is not being punished world-wide for an inconsistent execution. And that complacency could cost the brand in the long run.

If you are paying attention to their march in non-USDM markets, you will see there's this really confusing reality when people in these markets really really love those cheap Lexus FWD products and are willing to pay a premium for the badge. The same exact problem with BMW in USA occurs in ChDM. The car market just had the largest crash in recent history (over 20% decline), every BBA dealership had to offer discounts up to 25% to avoid their lots overflowing, yet Lexus posted 20% Y2Y growth despite increasing MSRP on all their products by 10%. It is clear people are just buying that badge when the Avalon Hybrid Limited is in every way shape or form better than a base ES200 for a lower price.

So in this situation it's easy for them to blame their sales decline in USDM entirely to the sedan crash, because global statistics and figures don't show they are making a real mistake. Now just imagine if you were an inspired and motivated Lexus mid-level executive who wants to warn the people high up, how do you sell the story? The numbers are not on your side. All those theories we propose on this forum, while really obvious to us enthusiasts, don't really have sound evidence to back them up.

We all tend to think switching all their products to longitudinal RWD platform will solve their problems, but is it really going to work like that? I also think making a BEV version of all their cars will make Tesla go bankrupt next year. But at some point we have to think about the question: do we really believe the brand is heading to the ruins, or are we just upset it's not making the product we want?

Your post brings up some of the things I think about frequently and have mentioned with @krew and @mikeavelli. I do believe that much like you say, Lexus is looking at markets like China and those where they are expanding, and saying, "We're doing well - we're good. Overall sales are up."

Those sentiments aren't wrong, on paper.

But is Lexus the it-brand there right now because they're new, because they're cheaper or because their product is fundamentally better? If only the former, will that cache last forever? Probably not. Also, how is Lexus comparatively priced vs. BBA in those markets - still a value? I suspect so.

Part of what makes higher power RWD vehicles appealing in the US is a lack of emission rules/displacement taxes and large, open roads through an expansive highway system. You could definitely make the case that such vehicles are being phased out on a global scale, so Lexus need not bother. But Lexus also offers nothing in the way of BEV aside from the UXe, and they could be doing a much better job of implementing hybrid and BEV technology to be a leader. We've heard whispers about in-wheel electric motors and solid state batteries, but BMW, Mercedes and Audi already have full lineups of plugin models. Where is Lexus - at all? Rav4 Prime sits on TNGA-K, so I have a hard time believing that a Lexus ES350e couldn't have debuted first with the same powertrain.

I also think something that many manufacturers are going to face is maintaining their brand experience and expected driving characteristics with BEVs or next generation hybrid technology. This is another place where Lexus should have been a leader, but aside from the LS/LC500h, they just use Toyota powertrains. Think about a 2.0T I4 mated to a hybrid system creating a tax-friendly "LS 400h" for markets like Europe and China. Why is there no innovation at Lexus? LS 500h is not good enough for USA and not cheap enough for other world markets - part of why it is failing.

Perhaps the greatest injustice right now is seeing how good the Toyota product is, and knowing that Lexus isn't really any better. So then you start to wonder why the brand is necessary, and how they will differentiate long term with a lineup of Toyota rebadges and two dedicated products (LS/LC).

... and then we come full circle with the frustration.

I say all of that to point out that until there is a compelling reason to buy a Lexus over BBA, there is trouble ahead - even in growing markets like China, even when expanding into new geographies, even when executives turn a blind eye to these troubles and say, "Numbers are up!" Spindle grilles, launching in new markets and gussied up Toyota hardware will only get you so far against three companies who are building fundamentally better premium products. So Lexus either remains a cut-rate value product line or innovates to chase Tier 1 status again.

What concerns me most is how long this identity crisis is taking to resolve itself. We've been watching this downfall for a decade now, and then we look at brands like Acura, Infiniti, Jaguar and Cadillac who all had their day in the sun and were VERY quickly forgotten. It seems nearly impossible to rekindle your automotive mojo when it's been lost like this.

 

[Gecko]

I want something that drives 85% of a Taycan at half the price and 1/3 the cost of ownership. I'm pragmatic that way lol.

I too would like to win the lottery without buying a ticket.

 

[internalaudit]

I too would like to win the lottery without buying a ticket.

I am more realistic and even having been part of a lottery pool at the office for three years now, the group hasn't won anything significant.

I have toqualify my earlier comment. 85% driving dynamics in day to day driving. I have no intention to track my car now or even in the future. Slap torque vectoring on a 4IS AWD BEV and call it a day.

A Taycan 4s starts at $120k CAD. I think Toyota can price a 4IS BEV at $60k when the base 3IS starts at $42k. Even at $65k I would still go for it.

Any way, it remains to be seen how serious Toyota is and I am definitely open to other makes too if it just takes too long. The Macan BEV would be perfect for $65k. Current gen base starts around $54k.

I am patient through to 2025 or as long as three of my cars are still running but not stupid enough to wait for nothing out of a sheer sense of loyalty.

 

[Ian Schmidt]

I do believe that much like you say, Lexus is looking at markets like China and those where they are expanding, and saying, "We're doing well - we're good. Overall sales are up."

I think that in much the same way that Edward Demming launched the Japanese business revolution that eventually dominated in the 1980s and 90s, modern short-sighted American business practices started migrating to Japan during the bubble era. Interestingly, this has manifested as good to great execution on the parent brands of the big 3 Japanese automakers and mixed to poor results on their luxury brands. Toyota, Honda, and Nissan all are doing well to varying extents on their own-branded products (Toyota, then Honda, then Nissan in my opinion), while Lexus, Acura, and Infiniti all have varying degrees of problems. Even Acura's formerly unbeatable CUVs seem to be trailing off, while the RX, NX, and UX are all over the damn road.

Hyundai/KIA is at least reading the right playbook, but Genesis seems to be DOA in the US barring a miracle. There's no marketing and everyone knows it's a Hyundai because they kept the name from a Hyundai and sell it at Hyundai dealers.

 

[spwolf]

do we really believe the brand is heading to the ruins, or are we just upset it's not making the product we want?

indeed.

 

[internalaudit]

^ I think the various markets' reception to Tesla Model 3 and the Y, plus the three electric motor S Plaid is enough for Toyota to realize that at least for the medium-term, the future is electric.

With electric, there is need to lag behind the German turbo charged, underrated engines in terms of acceleration and fuel efficiency. So if Lexus/Toyota decides to be conservative and ekes out but 85% of a Model 3's driving range and one full second slower 0-60, I'm sure there are still going to be buyers like me waiting in line. Once sporty AWD BEVs hit 325 miles of range with a 50% drop in the coldest winter days, I don't think I will ask for more range. I'm not the type who would clamor for more range when I will only be needing it once in a blue moon.

 

[Ian Schmidt]

For "ruins" vs. "not making the product we want" I'd say it's a little of column A, and a little of column B. I think that what they aren't making is largely more of a problem than what they are. I'm skeptical of the value of current EV technologies, but I'd still like to see them PHEV all of the things. The RAV4 Prime is getting great buzz from everyone; TMC needs to listen to that and spread that love around.

I also think that BMW and Mercedes moving downmarket has gone in the somewhat unexpected direction of making people even more brand snobbish (tip of the hat to @Carmaker1) now that they can get "the right badge" for the same money as a Camry. And that's hurt Lexus' value proposition (and more or less destroyed Acura and Infiniti, who had less of one to begin with).

 

[spwolf]

For "ruins" vs. "not making the product we want" I'd say it's a little of column A, and a little of column B. I think that what they aren't making is largely more of a problem than what they are. I'm skeptical of the value of current EV technologies, but I'd still like to see them PHEV all of the things. The RAV4 Prime is getting great buzz from everyone; TMC needs to listen to that and spread that love around.

I also think that BMW and Mercedes moving downmarket has gone in the somewhat unexpected direction of making people even more brand snobbish (tip of the hat to @Carmaker1) now that they can get "the right badge" for the same money as a Camry. And that's hurt Lexus' value proposition (and more or less destroyed Acura and Infiniti, who had less of one to begin with).

problem with the buzz is that only Tesla's sell, and they also sell a lot of... new models, not old.

It is really, really tricky.

 

[internalaudit]

New models from Tesla (3 and Y) are actually the industry's bread and butter and where the volume and profit is.

Many people don't require and want larger and more luxurious vehicles if they will cost twice as much (e.g. Lexus IS vs Lexus LS) but of course there will pockets of the population who want uniqueness and the best of the best out there and have deep pockets for the $50-60k not to matter.

But car manufacturers don't want to let technology trickle down. Over on Acurazine, people suggest the current RLX will be the last generation. Maybe the Sports Hybrid SH-AWD can trickle down to the TLX then and make it a big seller?

It's not like I want a massage seat or a Porsche Wet Mode on an IS. Just torque vectoring, great MPG (if hybrid) or decent driving range (for a BEV), excellent handling and a reasonable price point will do. Not everyone is demanding. I've got a Panasonic massage chair at home to enjoy lol.

 

[zeusus]

Lexus (and Japanese cars in general) has always been about the value buy. People still associate Japan with reliability/quality at a reasonable price proposition. They don't want to "splurge" on it when there are cooler, more socially acceptable brands to splurge and show off with.

The reason Lexus did so well in the 90s and 00s is because MB was offering poor design combined with poor quality which Lexus was ahead by at least half a generation. In the last 10 years, MB has caught up in design and quality, combine those factors with their brand and people are more than happy to go with MB.

Now that Lexus has high pressure competition from the top (BMW/MB) and the bottom (Hyundai), they're being squeezed between value and brand. Its quite obvious.

Who knows how true the IS cancellation rumors are but as I have mentioned in another thread, if you can't make the business case for a product any longer, you must adapt. Lexus is gaining sales in other CUV/SUV segments while losing share in the sedan space. People just want something different and if they want an entry level sedan, maybe MB and BMW has the brand power to get them to do that even though, in my opinion the last 2 MB c class were just horrible designs, they still sold very well. In order of looks, I think IS/3 series are top and then the A4 and C Class dead dead last. But why did people flock to the C Class? Maybe to have a MB that sort of not really looks like the S Class? perhaps...

A car company can only build so many money losing, "dream cars" for the fans while attempting to recuperate those losses with cash flow generators. Theoretically Toyota makes so much money they can lose a ton every year and bring us epic Lexus products, but at the end of the day Lexus is still a business, the initial offerings from Lexus were great because they were investing into a brand for a return down the line. Eventually the balance sheet needs to look good for the shareholders.

In the USA, buying a Lexus is still a "I've made it" move, just when those consumers want to make that statement, they'd rather pay a little more to say it louder.

In theory, the LC was such a great overall value proposition by design, performance, and quality, it should've been a no brainer and easily hit their sales goals. Imagine if MB designed and released the LC instead? People would be scrambling to put down a deposit but buyers in that segment just rather buy the brand. Does ANYBODY here know how much better the LC should've been engineered to attain better sales than the competition? No, and thats exactly why I'm so annoyed when I hear complaints from people who think they know exactly what the problem is, as if giving the LS an extra inch more leg space in the rear or 2 more cylinders would've been the home run formula.

 

[Mohammed Taha]

Hey guys, remember me? The guy who used to own a Lexus and was so fed up with their antics I spent half my time here shitting on them?

It's been a while but I agree with everyone here. There used to be a time when I would check out Lexus's website looking for deals, or some of my time on Autotrader (Used cars website) looking at what's out there. I now rarely think of them and haven't, as you can tell from my history, thought of Lexus in a long time.

Design is so polarizing it's not Cyber Truck ugly but it's just so in your face and not built on a "Lexus" design language. Don't even get me started on the spindle grill. You know what else is polarizing? Toyota. Which does not help a brand that tries its hardest to prove that their cars are not Toyotas.

Tried to prove that their Fuel Cell technology was the next best thing, even laughed at the competition, when every manufacturer was looking to bring EV-only.

Has one of the worst Infotainment systems when the German competition is light years ahead

The list unfortunately just goes on.

Lexus needs new leadership. Lexus needs a new design language built on their heritage that they can continue to build on not completely re-invent the wheel every 6 - 7 years.

BMW barely started coming together in the 1970s-80s and still struggle in the $200k+ atmosphere, which MB does not.

That's because BMW has Rolls Royce. They do not need to spread themselves thin when they already have a car that fills that segment.

The same goes for the VW Group, although I know for a fact that there were and may still be internal issues with the VWs launching with features prior to their older brothers; Audi and Porsche.

The thing is, you look at a S Class and you know what you're looking at.
You see a Panamera and you know what it is. Even girls know that that car is something special without you having to point out why that car is what it is.
Show them a Lexus and you will get a completely different response.

Lexus does well in the Gulf (Middle East) because they do amazingly well in that weather and are extremely reliable. However, in other countries where you're spoiled for choice, Lexus will struggle.

The EU favors EU cars.
North Americans favor American and German to almost anything else unless it's a bargain.

You're now left with China and a few other small markets where the choice is usually Toyota rather than Lexus.

While Lexus ponders where it's failed Tesla has now established itself in the UAE and is killing it there.

In this day and age, Infotainment is almost everything. That was Tesla's success. A car that can be upgrade on the fly with new updates. A car that can drive itself. It built a cult, a following and it's only how many years old?

Where Tesla succeeded, Lexus failed.

 

[mikeavelli]

First time hearing this. If we remember the 3IS had a strong debut and got solid reviews for its handling. Fast forward 6 years later and it’s just old. If a new version comes with
New engines
Top tech
Better interior
Hybrid/plug In
F model
It can win. I have a hard time believing Hyundai/Kia/Genesis offers a 2019 COTY with an optional manual and Lexus hasn’t moved the IS needle in 6 years.

 

[mediumhot]

I'm not so sure it can win anything unless it's a first generation product of whole new up and coming family and philosophy approach and implementation. New BMW 3 series has pushed the game far too ahead, it's the best 3 series in two decades. I was first one to call 3 series smoke and mirrors all these years, especially multiple '00s M3 generations which somehow got into comparisons with Vettes and Porches and were considered ultimate sports cars disguised into three box sedans. Until Evo came into the game and whip the floor with it in all of the sports car categories, exposing M3 real bad.

But today it's different, 3 series is the real deal. IS really needs to be baby new LS in every aspect to stand a chance.

 

[spwolf]

I'm not so sure it can win anything unless it's a first generation product of whole new up and coming family and philosophy approach and implementation. New BMW 3 series has pushed the game far too ahead, it's the best 3 series in two decades. I was first one to call 3 series smoke and mirrors all these years, especially multiple '00s M3 generations which somehow got into comparisons with Vettes and Porches and were considered ultimate sports cars disguised into three box sedans. Until Evo came into the game and whip the floor with it in all of the sports car categories, exposing M3 real bad.

But today it's different, 3 series is the real deal. IS really needs to be baby new LS in every aspect to stand a chance.

every time new 3 series come up, it is the best car ever... then few years later it becomes nothing special and then there is new gen that is a lot better than "bad" old gen.

Anyway, new IS has to be cheap and has good deals as well as be a Camry inside. Being a good car and better handling/riding/behaving than F10 didnt help it a single bit.

Lexus will not make that car... their IS is sporty sedan, not a Camry. For better or worse.

And there is no reason for Lexus IS not to come, they already built new Crown.

 

[mikeavelli]

The new 3 series reviews aren't really fans of it. I don't think its pushed anything. Sales are down as their customers move to SUV'S. There was a time when every new 3 came out it was without a doubt the best in class. Today its a strong contender but no longer the game changer it used to be each generation. Ironically its gotten softer and bigger and fatter to please SUV types. Thus why the Tesla Model 3 or even Genesis G70 is getting great reviews for their handling in comparison.

Bringing it back to the IS, the first and current 3rd gens were near the 3 or even better in some aspects with handling but lose in many other areas like interior. While the 3 series like everything else is a jack of all trades, the IS/ES (hell remember HS) split meant the IS could lean more to the sport side.

Interestingly enough the GS actually went the route of the Germans.
GS 200t /300
350
450h
GS F

Arguably Lexus best product but I think the mudane styling outside of the front end and smaller size didn't resonate after the first couple of years. Sad as even to this day that car pushes my buttons.