Lexus June 2018 Sales Report

[Gecko]

Two points:

1) So much changed with the 5LS that I think it's hard to pinpoint any one issue for lackluster sales.

• One size fits all - and it's bigger than it's ever been, when most LSs before were sold as SWB or only offered SWB
• Compromised rear seat room vs. a historically cavernous rear seat area (even the Honda Accord has more legroom)
• Less headroom
• Losing the V8 - some folks might not like the V6

2) Someone else made this point a while back, but Lexus has really done a terrible job with consistency over the last several years - especially for their sedans - and I think we can't under estimate the importance of this.

• IS - 2IS ran an 8 year cycle and introduced IS F, no 3IS F, 3IS had carryover engines at first, lackluster 2.0T option, strange packaging with IS 300 AWD, changing names from IS 250 to IS 200t to IS 300, etc.
• GS - 3GS went from GS 300 to GS 350 in the second year, which outpowered the GS 430, then we got the GS 460 with a detuned LS V8, barely any support for GSh, then 4GS launches with the carryover V6 only, no marketing support for new GS 450h, GS F shows up 3 years late and 150hp short
• LS - 4LS was a ten year model cycle with two refreshes, SWB and LWB options, V8-only, 5LS debuts sharing very little DNA or identity with the car before, one size only, no V8 option at all, rear seat that is smaller than the 4LS SWB, being a one-size-fits-all model that's very large, there was a significant price hike for some customers on the new model
• ES - The only model that's ever had any consistency because it follows the Camry and Avalon, which are Toyota's bread and butter so they stick to a strict schedule with refreshes and redesigns.

Typical lease terms are 2 or 3 years, which means that someone will flock into a dealership to buy a brand new model and then when that lease is up, they should be able to see a refreshed/updated model that improves upon their last car. Then when that lease is over, a completely new model is available. Even with buying, the cycle in USA is not dissimilar, with most folks looking at new cars every 3-5 years. So for IS and LS, Lexus has had very little to offer and provided almost no incentive for someone to stick with the brand. Face it, most people want something new and Lexus hasn't delivered on that - think about someone who has been buying IS 350s for years. Would you keep buying the same car 3-4x over 13 years with the same exact engine?

Constant improvement and change shows car buyers that your brand is innovative and keeping pace with the industry and expectations. It would be hard to keep buying LSs when you see constant improvement in the S Class, or GSs in comparison to the E Class or 5er, and same for the IS in relation to C/3er. There will always be loyalists and enthusiasts, but for the general car buying public, Lexus' sedan lineup is either very stale or radically different from what they're used to. Then you have the "basic transportation" formula like ES that just hits the sweet spot for luxury, features and service around $40-45k.

We now have rumors of 3IS lasting into 2020 or 2021, so that is another 6-7 year cycle when you consider how long the car has been on the road. Adding Apple CarPlay and something like 275hp 2.0T and 375hp 3.0T V6 would go a long way towards adding some pizazz in the lineup, but we know Lexus isn't packing that type of fire power. Over time, this lack of investment in the product sends car shoppers elsewhere and other brands have done a much better job of keeping their product lines fresh and innovative - making consumers feel like they're getting more for their money, and definitely having a better experience. These defected customers then stay where they're at because they're bought into a system that's working for them.

Truthfully, their SUV lineup is not much better but is being buoyed by sales trends. Not good.

 

[ssun30]

Truthfully, their SUV lineup is not much better but is being buoyed by sales trends. Not good.

That is the true danger here. Competitors are rolling out SUV models like crazy while Lexus is taking its time. The UX looks intentionally crippled for the U.S. market while BMW demonstrated how much can be earned in the subcompact segment (over 4k combined for X1 and X2 is not a number to ignore). The GX and LX...I don't want to beat the dead horses any more. The LF-1 and potentially other 'crossover coupes' are still years out. Meanwhile others are also playing the electric SUV card while all we get is a loose rumor about a UX EV. The NX was a success but is nowhere close to being secure. At this point the only safe product in their SUV lineup is the RX, just like how the only safe sedan is the ES.

We now have rumors of 3IS lasting into 2020 or 2021, so that is another 6-7 year cycle when you consider how long the car has been on the road. Adding Apple CarPlay and something like 275hp 2.0T and 375hp 3.0T V6 would go a long way towards adding some pizazz in the lineup, but we know Lexus isn't packing that type of fire power. Over time, this lack of investment in the product sends car shoppers elsewhere and other brands have done a much better job of keeping their product lines fresh and innovative - making consumers feel like they're getting more for their money, and definitely having a better experience. These defected customers then stay where they're at because they're bought into a system that's working for them.

Honestly, having the IS catch up in the power and tech department does not mean they can turn the situation around. MB and BMW have become increasingly paranoid about the threat of Tesla Model 3 on the C-class and the 3-series, and these two have much stronger sales than the IS. What I'm saying is not that the Model 3 is the biggest threat to the IS; it's what MB and BMW will make in response to the Model 3. The next C-Class and 3-series will be very different from what they are today. We can keep saying Tesla will crash and burn in the foreseeable future, but with the Model 3 being such a disruptive product in the segment, the 4IS needs to be something seriously different to have a slim chance of competing.

 

[Ian Schmidt]

1) So much changed with the 5LS that I think it's hard to pinpoint any one issue for lackluster sales.

I'd argue that the 5LS lacked a singular killer feature. Personally I thought as a total package it was compelling, but you've gotta get people in test driving it to make that decision. 3LS was ultimate plushness. 4LS (briefly) had the self-parallel-parking, which Lexus played up in the early ads. Then it suddenly went away and nobody still knows what happened. It can't be that the tech itself was bad, because you can still get it in some very low-end cars now. If 5LS had launched in the US with the "level 2.5" autonomy that they're shipping in Japan I think it would sell a lot better. Smart cruise and lane assist don't wow people anymore.

 

[mikeavelli]

Two points:

1) So much changed with the 5LS that I think it's hard to pinpoint any one issue for lackluster sales.

• One size fits all - and it's bigger than it's ever been, when most LSs before were sold as SWB or only offered SWB
• Compromised rear seat room vs. a historically cavernous rear seat area (even the Honda Accord has more legroom)
• Less headroom
• Losing the V8 - some folks might not like the V6

2) Someone else made this point a while back, but Lexus has really done a terrible job with consistency over the last several years - especially for their sedans - and I think we can't under estimate the importance of this.

• IS - 2IS ran an 8 year cycle and introduced IS F, no 3IS F, 3IS had carryover engines at first, lackluster 2.0T option, strange packaging with IS 300 AWD, changing names from IS 250 to IS 200t to IS 300, etc.
• GS - 3GS went from GS 300 to GS 350 in the second year, which outpowered the GS 430, then we got the GS 460 with a detuned LS V8, barely any support for GSh, then 4GS launches with the carryover V6 only, no marketing support for new GS 450h, GS F shows up 3 years late and 150hp short
• LS - 4LS was a ten year model cycle with two refreshes, SWB and LWB options, V8-only, 5LS debuts sharing very little DNA or identity with the car before, one size only, no V8 option at all, rear seat that is smaller than the 4LS SWB, being a one-size-fits-all model that's very large, there was a significant price hike for some customers on the new model
• ES - The only model that's ever had any consistency because it follows the Camry and Avalon, which are Toyota's bread and butter so they stick to a strict schedule with refreshes and redesigns.

Typical lease terms are 2 or 3 years, which means that someone will flock into a dealership to buy a brand new model and then when that lease is up, they should be able to see a refreshed/updated model that improves upon their last car. Then when that lease is over, a completely new model is available. Even with buying, the cycle in USA is not dissimilar, with most folks looking at new cars every 3-5 years. So for IS and LS, Lexus has had very little to offer and provided almost no incentive for someone to stick with the brand. Face it, most people want something new and Lexus hasn't delivered on that - think about someone who has been buying IS 350s for years. Would you keep buying the same car 3-4x over 13 years with the same exact engine?

Constant improvement and change shows car buyers that your brand is innovative and keeping pace with the industry and expectations. It would be hard to keep buying LSs when you see constant improvement in the S Class, or GSs in comparison to the E Class or 5er, and same for the IS in relation to C/3er. There will always be loyalists and enthusiasts, but for the general car buying public, Lexus' sedan lineup is either very stale or radically different from what they're used to. Then you have the "basic transportation" formula like ES that just hits the sweet spot for luxury, features and service around $40-45k.

We now have rumors of 3IS lasting into 2020 or 2021, so that is another 6-7 year cycle when you consider how long the car has been on the road. Adding Apple CarPlay and something like 275hp 2.0T and 375hp 3.0T V6 would go a long way towards adding some pizazz in the lineup, but we know Lexus isn't packing that type of fire power. Over time, this lack of investment in the product sends car shoppers elsewhere and other brands have done a much better job of keeping their product lines fresh and innovative - making consumers feel like they're getting more for their money, and definitely having a better experience. These defected customers then stay where they're at because they're bought into a system that's working for them.

Truthfully, their SUV lineup is not much better but is being buoyed by sales trends. Not good.

Good points...

Another thing too, but Toyota/Lexus is going to cut the marketing budget too. I honestly can't say I've seen too much LS content especially compared to the LC. Maybe I'm just missing it.

The thing is and for those that have driven all these cars, the LS and Panamera are by far the most interesting and involving to drive. The 7 series gets there but at autobahn speeds and driving which we don't do here. The S-class even in AMG trim is fast as hell but still with very light steering.

Irony is all these years mags and the internet ragged on the LS for being bland and a boring drive and Lexus fixes it and sales haven't been scorching thus far. Meanwhile bland/boring sold.

Let us not forget too a hydrogen LS is supposed to be coming. That would be a game changer.

 

[ssun30]

If 5LS had launched in the US with the "level 2.5" autonomy that they're shipping in Japan I think it would sell a lot better. Smart cruise and lane assist don't wow people anymore.

I don't think LSS+A is even L2 since it does not allow hands-off driving. Isn't LSS+A also available in US?

 

[Ian Schmidt]

I don't think LSS+A is even L2 since it does not allow hands-off driving. Isn't LSS+A also available in US?

The "exit to exit" version, whatever that's called, is only available in Japan due to road data availability. And the definitions I've read say level 2 is still hands-on-required.

 

[corradoMR2]

We now have rumors of 3IS lasting into 2020 or 2021, so that is another 6-7 year cycle when you consider how long the car has been on the road. Adding Apple CarPlay and something like 275hp 2.0T and 375hp 3.0T V6 would go a long way towards adding some pizazz in the lineup, but we know Lexus isn't packing that type of fire power. Over time, this lack of investment in the product sends car shoppers elsewhere and other brands have done a much better job of keeping their product lines fresh and innovative - making consumers feel like they're getting more for their money, and definitely having a better experience. These defected customers then stay where they're at because they're bought into a system that's working for them.

I 100% agree and this is exactly my case. Took the plunge on the Stinger and it is an incredible piece of machinery. We still have the RX but I'm already eyeing the XC60, RDX, F Pace, among others. Sad for such a 30-year loyalist like me but if and when Lexus steps up to the plate, I will be back.

 

[Rhambler]

I like the Stinger a lot as well; I would consider it over any Lexus sedan or coupe.

I may not be as tactful as Gecko in regards to their negligence (and it is negligence) all around, especially in power trains and technology, but I agree with him. They spent too much effort on design, thinking that one element would rewind the demographic clock and cure all their ills. Wrong.

They are slow and blind. Their corporate culture isn’t nimble at all based on what we’ve seen so far.

 

[Ian Schmidt]

Keep in mind that if 2016 had gone the other way we'd be staring down a required 54.5 MPG CAFE by 2025, and in that light TMC would arguably be in the best shape of any full-line ICE automaker. Honda clearly made the same call, which is why the V6 Accord is extinct.

 

[mikeavelli]

I 100% agree and this is exactly my case. Took the plunge on the Stinger and it is an incredible piece of machinery. We still have the RX but I'm already eyeing the XC60, RDX, F Pace, among others. Sad for such a 30-year loyalist like me but if and when Lexus steps up to the plate, I will be back.

The GLC 63 has my eye as well as doing a full Novitec package Levante. I really wish the RX offered a higher power option. 400hp in it would be superb but I would settle for 350 lol...it surely has the looks going for it, it really is an aggressive looking SUV. We love ours as you love yours.

I like the Stinger a lot as well; I would consider it over any Lexus sedan or coupe.

I may not be as tactful as Gecko in regards to their negligence (and it is negligence) all around, especially in power trains and technology, but I agree with him. They spent too much effort on design, thinking that one element would rewind the demographic clock and cure all their ills. Wrong.

They are slow and blind. Their corporate culture isn’t nimble at all based on what we’ve seen so far.

The word negligence is not really accurate as that would mean people are out there dying with their new Lexus lol.

Lexus is on track to break a worldwide sales record in 2018.

Let me also remind everyone, this is a company in the USA still in transition having recently moved from California to Texas. Many people retired or are retiring, many people left and stayed in California and many people have gotten promoted.

 

[peterharvey]

Lexus is on track to break a worldwide sales record in 2018.

Global sales are up, mainly due to the Chinese marketshare of 25% & >10 million vehicles.
https://www.carsguide.com.au/car-news/global-new-vehicle-sales-set-to-crack-100-million-67022

Daimler AG record global sales:
https://www.daimler.com/investors/reports-news/financial-news/mercedes-benz-sales-march-2018.html

BMW AG record global sales:
https://auto.economictimes.indiatim...-into-2018-with-sales-profits-record/64030324

 

[mikeavelli]

Global sales are up, mainly due to the Chinese marketshare of 25% & >10 million vehicles.
https://www.carsguide.com.au/car-news/global-new-vehicle-sales-set-to-crack-100-million-67022

Thanks for that. As I stated Lexus sales worldwide are on pace for a record. The people complaining don't seem to own a new Lexus while those of us with one are happy even with shortcomings, which every car has

 

[CIF]

I'd argue that the 5LS lacked a singular killer feature. Personally I thought as a total package it was compelling, but you've gotta get people in test driving it to make that decision. 3LS was ultimate plushness. 4LS (briefly) had the self-parallel-parking, which Lexus played up in the early ads. Then it suddenly went away and nobody still knows what happened. It can't be that the tech itself was bad, because you can still get it in some very low-end cars now. If 5LS had launched in the US with the "level 2.5" autonomy that they're shipping in Japan I think it would sell a lot better. Smart cruise and lane assist don't wow people anymore.

A most excellent point. I think this plays a big role with the 5LS actually. As much as I like the inclusion of the new optional ML audio system and the fancy interior trim options, I don't think either of these qualify as killer features. The 3LS also had improved craftsmanship and fit and finish over the 2LS that Toyota at the time marketed up in their press releases. Mysteriously, Toyota made some very ambitious claims in the 5LS press releases, yet never explicitly explained nor backed up their statements.

I think even a feature like the Mercedes Magic Body Control being included in the 5LS would lead to better sales, even though it wouldn't be an original feature. It would however be somewhat of a killer feature because so far only Mercedes and Rolls Royce have such systems in production vehicles.

Irony is all these years mags and the internet ragged on the LS for being bland and a boring drive and Lexus fixes it and sales haven't been scorching thus far. Meanwhile bland/boring sold.

Let us not forget too a hydrogen LS is supposed to be coming. That would be a game changer.

Listening too much to auto mags and the internet is very dangerous for Toyota. Most auto journalists are not Toyota buyers, and a lot of internet criticism consists of people who don't buy vehicles or who are trolls. The feedback that is important and what matters is what Toyota hears from actual owners and also from prospective customers in person at dealer showrooms.