"When you've been making money lying down for too long, you forget how to make money standing up".
The demise of the F line actually coincided with a "Second Renaissance" of Lexus, despite what enthusiasts would call a "Lost Decade". The 2010s was a period where Lexus transitioned from going toe to toe with European brands, to avoiding direct competition and increasing volume and profit in the easiest way possible. The 2016-2020 "Alphard Bubble" in the Chinese market was what made Lexus realize this strategy. Toyota found a completely empty market segment and established a near monopoly and was able to charge exorbitant prices, and later doubled down with the LM that could be argued to be the single most profitable automotive product in history (with a per-unit margin of well over 200%). The ES grew from mid-size to full-size because that's easy to do on a transverse FWD platform, with even more space than the flagship LS - this allowed them to easily undercut the 5-series/E-class and establish the ES as one of the best selling luxury sedan globally. If you just look at the figures, Lexus has never been this strong.
But as the saying goes "what goes up must come down". This lazy competition strategy ended up costing Lexus in the early 2020s when they found out they have no competitive product in China anymore, and have to engage in a very costly price war just to maintain their presence in one market. And the market size is large enough for them to not just abandon it (like Acura and Infiniti did), so they have to commit even more. Now they are basically betting everything will be alright once their Shanghai factory was built, and go back to their pre-COVID sales figures by selling 5-year-obsolete BEVs, good luck with that.
Lexus was lucky that their competitors also made mistakes, much bigger mistakes. Most European brands went all-in on full BEV plans and we all know how well that worked out. They invested almost no R&D to full hybrids and wasted all their effort on ineffective mild hybrids. Mercedes reacted very slowly to the LM despite decades of V-class VIP conversion market in many parts of the world. But among them, BMW stood out because they stuck to their core brand identity despite their questionable design language. The death of the F brand exposed the biggest real weakness of Lexus as a brand: they don't really know what kind of brand they want to be, instead just going for whatever market segment that makes the most money.
What I think could salvage the F brand name is going for the BOF market similar to how TRD transformed. The G63 AMG is probably the best-selling "full AMG" (not counting "AMG-lite" models like C43) model because it caters to some very rich clients with a specific taste for BOF products. Till this day Lexus still refuses to compete against the G-wagen and RR which I think is a big missed opportunity. The GX and LX are more popular than ever, so instead of an easily forgettable generic name like "Overtrail", why not expand the two to a F lineup like the TRD lineup? I'm almost certain a LX with the 4.0TT V8 will easily sell 10 times the volume of the GR GT without requiring expensive R&D.
Great post. I think the conversation around what enthusiasts want (passion products) vs. the business case (rebadged Toyota SUVs) is always a tough one, but I also look at it as a chicken or egg scenario too. Lexus has stopped innovating and trying to build great cars, but they have the privilege of being a top luxury brand who can do that because they earned it for 20+ years with products like IS, GS, LS, SC, RC, and LC. Those have always been the products that drive passion for the brand, and then those same people who lust after them choose an NX for their daughter, or an RX for their wife, an ES for their mother, or an LX when they're able. NX/RX/ES have been the core of Lexus, but IS/GS/LS/coupes have always been the passion and the heart. What is a premium brand without passion?
Losing GS - sure, I won't fight that battle considering their decisions with the ES and the market's turn away from passenger cars, and I thought the 7th gen ES was a pretty solid car. If Lexus cancelled the 4GS earlier and in turn engineered a legitimate ES 350 or ES 350h AWD, it would have made for a compelling midsize sedan that made the GS irrelevant. I think many of us were hoping Lexus would have taken a more "Audi A6" approach with the 8ES now that the GS is fully gone, but like the 5LS, what they've done is yet another car made for nobody: unattractive exterior, plain and barren interior, weak EV specs, awkward packaging, and increased price. I hear Lexus USA is already collecting product feedback and hoping for an early refresh to fix some of these problems.
... but losing F, LS, IS, RC, and next LC? Time for us to stop bashing Acura and Infiniti because Lexus will very soon be just the same. It is a brand with no soul and that is great at nothing. I think there will be negative sales impacts 4-5 years from now when products like F, IS, LS, RC, and LC are distant memories and the only thing Lexus sells is basic transportation with leather surfaces. Toyota+. Toyota, Hyundai, Kia, and other mainstream brands are already building crossovers with better specs and features than Lexus, Cadillac is becoming dominant with EVs, and the Germans will always appeal to shoppers wanting and willing to pay for "more." Lexus has even historically been able to sell uncompetitive cars on paper because they are good looking - IS, ES, RX, GX - but this new generation of products like ES, RZ, RX, and TX are awkward or downright ugly. What will happen when Lexus is good at absolutely nothing and the lineup is so bland or ugly with no passion products to make people excited?
Your point about Lexus' brand identity is one I have thought about a lot, especially because it is now the third and final Japanese luxury brand to fall from grace. Was the original LS just Toyota wanting to prove they could build a better Mercedes for half the price? Maybe. I think cars like Altezza/IS, Soarer/SC, and Aristo/GS were some of Japan's best work for premium automotive products but outside of that, what really is Japanese about Lexus' heritage or approach? I think Japan's conservative culture has been to blame for much of Acura's, Infiniti's, and Lexus' problems but I also don't think it's an excuse. LS was always Japan's S-Class. RX became a runaway success because they Lexus-ified a Camry platform and uncovered a niche in the market nobody else covered. While their paths haven't been linear, BBA have been clear in their conviction and brand direction. Lexus, Acura, and Infiniti made a series of market plays but seemingly without a connected strategy or brand identity. LS, SC, LFA, RX, F brand, LC, NSX, TL Type S, Q45, G35, and G35 Coupe. A collection of greatest hits but no standout albums and no signature sound.
My day job is in brand/demand marketing so I see things like this happen a lot: a brand or a company gets a hit or two under their belt and they run towards short term success, back and forth, almost in a zig-zag pattern bouncing between ideas but never chasing clarity or staying true to an identity or brand ethos. Change is good and nothing will be perfect, but I think the Japanese brands are victims of this thinking especially as premium "projects" of their mainstream parent companies.
I then think... what is real, Japanese luxury? I do think Lexus has encompassed that at times but there's no denying Lexus' driving force was the American market for 30 years, but now China. I also think the 5LS might be the best example of Japanese luxury with touches like Kiriko glass trim, pleated leather door inserts, and some of the other trims and details they used over the years.
I realize I'm rambling at this point but I've wondered if a big part of Lexus' problem is an identity crisis. Born for America, Japanese heritage, now adapting to China, always taking a back seat to Toyota... what really is Lexus, and how would you define them as a luxury brand? For everything from UX to LFA, RX to LS, IS to LM, I just don't think Lexus really knows who they are so they've become anything... and nothing.
Been thinking about resurrecting the podcast for this discussion because 2025 has been a pivotal year for the brand. Would need folks to discuss this with, so let me know if anyone here is interested.
