Will Genesis hurt Lexus?

krew

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So while Lexus has spent the last 11 years asleep at the wheel, the Germans unleashed an unprecedented product and technology onslaught, Audi became "a thing" and passed Acura and Infiniti handily, the Koreans were working on a war chest that would eventually allow them to compete at the very top of the market, and Volvo and Jaguar have been reborn.

Not trying to be a fatalist here, but Lexus is facing an uphill battle over the next ~5 years because essentially, everything they do or touch needs to be revolutionary to be competitive. A simple evolution - Lexus' signature recipe - won't really work anymore. Every product needs an "LS in '89" level of thinking and execution to be done right. Can they do that?

Ok, let's pump the brakes a bit on this train of thought. There's no question that Lexus has fallen behind the pack in terms of engines, but it's 11 years asleep at the wheel? A bit dramatic.

Let's face it -- Lexus as a brand in 2006 was far too boring to differentiate themselves from the middle-of-the-pack, and it was clear even then that dependability would soon become a secondary consideration in vehicle purchases. Luxury as a concept was changing as well, and most consumers were not going to see the classic Lexus "detail behind the detail" mentality as a selling point.

(An example: When every car is available with leather, trying to use leather quality as a point of distinction will have diminishing returns.)

The one weakness of the German brands is their conservative styling, and Lexus saw an opening in using an aggressive design language to separate themselves. This has taken up the bulk of the decade, as Lexus has refined the spindle grille into what we now see on the LC & LS. On top of this, Toyota has invested untold billions into the development of their TNGA platforms in order to streamline future vehicle development.

We're now seeing the fruits of this effort, with the LC & LS being arguably the best Lexus products since the LFA. We have a new TTV6 that should work in a variety of applications throughout the lineup, and the rumored-so-much-it-must-be-true TTV8 is going to transform Lexus product at the top-end.

As someone that writes about Lexus for a living, I understand the frustration. I can't believe how long some things are taking -- it all seems so slow-paced. But there's no arguing that the LC & LS showcase a future where every Lexus vehicle has a specific viewpoint, a distinct character. Lexus is through trying to be all things to all people, and for better or worse, don't seem all that interested in chasing its competitors. That goes with their design, and it goes with their engines.

And for all the talk about being left behind, I remember waiting and waiting for the NX, believing Lexus had dropped the ball and would never be able to catch up in the compact crossover market. The NX is now the second best selling vehicle for Lexus worldwide.
 

bogglo

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Well, that is maybe your opinion based on your own personal requirements. However Lexus sold 394,000 vehicles in 2004 and 677,615 in 2016, all while bringing their vehicle average $ numbers up, without crazy incentives that competition resorts to.

Surely only requirement for success is not if there is a twin-turbo V8 or not?

Also, why is Lexus in dire straits? Their sales are about the same this year, with all of their models late in model bicycle (between 3 and 6 years).

Lexus is never going to be at start of 1989 again. You will never get pricing like Hyundai with Lexus. If the only requirement is pricing, Lexus should not serve "your" needs. If we look at Lexus ES and Genesis G80, their average transaction price is the same (with G80 having 6k-8k discounts) and Lexus ES sells 3x the numbers.

Again, recipe for success cant be bi-turbo V8. It isnt for sure because Lexus is very successful and it is making Toyota most profitable manufacturer in the world.

As to the Sony, Toshiba, Panasonic and death of japanese electronics industry, if thats going to happen to TMC, it will happen after GM, Ford, Hyundai, Fiat, VW, BMW and MB die first. It is most successful and most profitable manufacturer in the world.

On the other hand, Hyundai sales are down 10% worldwide, this is on catastrophic level and while industry is growing, and you can guaranteed change of leadership and strategy if this does not change in 2018.

I agree with you.
Am pretty sure TMC is aware of the competition the LS is a good example. Very luxurious but yet cheap(go up against the top dog Mercedes BMW while still causing trouble for Hyundai G90 with the way it is price). Also almost all the cars in TMC line up is due for redesign(ES, IS, GS, Avalon, LX, GX...) new additional SUV (UX and RXL) too. So I don't think TMC would be loosing sale anytime soon. we all know the new trend is SUV. while Hyundai is adding a new sedan to its line, Lexus is adding two new SUV. Also the cars the new Hyundai is meant to go up against are all due for a redesign in the next 2 years(new 3 series, new Is). If Hyundai wants to be a threat, they need a RWD SUV. If they come out with a FWD SUV, Lexus would still be dominating the sale.
 
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Gecko

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Well, that is maybe your opinion based on your own personal requirements. However Lexus sold 394,000 vehicles in 2004 and 677,615 in 2016, all while bringing their vehicle average $ numbers up, without crazy incentives that competition resorts to.

Surely only requirement for success is not if there is a twin-turbo V8 or not?

Also, why is Lexus in dire straits? Their sales are about the same this year, with all of their models late in model bicycle (between 3 and 6 years).

Lexus is never going to be at start of 1989 again. You will never get pricing like Hyundai with Lexus. If the only requirement is pricing, Lexus should not serve "your" needs. If we look at Lexus ES and Genesis G80, their average transaction price is the same (with G80 having 6k-8k discounts) and Lexus ES sells 3x the numbers.

Again, recipe for success cant be bi-turbo V8. It isnt for sure because Lexus is very successful and it is making Toyota most profitable manufacturer in the world.

As to the Sony, Toshiba, Panasonic and death of japanese electronics industry, if thats going to happen to TMC, it will happen after GM, Ford, Hyundai, Fiat, VW, BMW and MB die first. It is most successful and most profitable manufacturer in the world.

On the other hand, Hyundai sales are down 10% worldwide, this is on catastrophic level and while industry is growing, and you can guaranteed change of leadership and strategy if this does not change in 2018.

We can agree to disagree. If you qualify "success" in sales numbers, Lexus has done fine for the last few years mostly due to continued global expansion - not because their product is great. If you look at the competitive set and make some logical guesses about where things are going in the next 2-3 years, Lexus is not in as great of a position, IMO.

Regarding the V8: Mercedes, Infiniti and others have ~400hp TT V6s available in their compact cars, and Lexus chose that as the top tier engine for LS? Sad. I am not saying its not a great engine because so far, it seems to be. However, we are talking about the LS here - Lexus' best and boldest thinking. There should have been a ~500hp TT V8 option if for nothing other than North America and Middle East markets where engine displacement and horsepower are consideration factors for a number of shoppers. Lexus always forgets that you have one chance to make a first impression and I think this is one area where they fumbled. 415hp LS 500, 500hp LS550 and 600+HP LS F would have sent a clear signal that Lexus is playing to win against Mercedes, Audi and BMW. Instead, they put in one engine that's equal to a Q50 and said, "We did it!"

With regard to "recipe for the world," we have no plug in hybrids and no EVs either. So Lexus is not even really playing the ICE horsepower game, nor alternatives. Lexus HSD is still a great system in every day execution and I know Germans are struggling with things like 48 volt mild hybrid systems, but where is the plan to counter Tesla, or BMW's i line, or the upcoming all-electric Mercedes? If Lexus' plan is to stick with hydrogen fuel cells, are they aware that 48 states in North America have no infrastructure to support it? What is the plan for all of these European cities that are outlawing ICEs in the next 10 years?
 
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Gecko

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Ok, let's pump the brakes a bit on this train of thought. There's no question that Lexus has fallen behind the pack in terms of engines, but it's 11 years asleep at the wheel? A bit dramatic.

Let's face it -- Lexus as a brand in 2006 was far too boring to differentiate themselves from the middle-of-the-pack, and it was clear even then that dependability would soon become a secondary consideration in vehicle purchases. Luxury as a concept was changing as well, and most consumers were not going to see the classic Lexus "detail behind the detail" mentality as a selling point.

(An example: When every car is available with leather, trying to use leather quality as a point of distinction will have diminishing returns.)

The one weakness of the German brands is their conservative styling, and Lexus saw an opening in using an aggressive design language to separate themselves. This has taken up the bulk of the decade, as Lexus has refined the spindle grille into what we now see on the LC & LS. On top of this, Toyota has invested untold billions into the development of their TNGA platforms in order to streamline future vehicle development.

We're now seeing the fruits of this effort, with the LC & LS being arguably the best Lexus products since the LFA. We have a new TTV6 that should work in a variety of applications throughout the lineup, and the rumored-so-much-it-must-be-true TTV8 is going to transform Lexus product at the top-end.

As someone that writes about Lexus for a living, I understand the frustration. I can't believe how long some things are taking -- it all seems so slow-paced. But there's no arguing that the LC & LS showcase a future where every Lexus vehicle has a specific viewpoint, a distinct character. Lexus is through trying to be all things to all people, and for better or worse, don't seem all that interested in chasing its competitors. That goes with their design, and it goes with their engines.

And for all the talk about being left behind, I remember waiting and waiting for the NX, believing Lexus had dropped the ball and would never be able to catch up in the compact crossover market. The NX is now the second best selling vehicle for Lexus worldwide.

I see your points but I still think "asleep at the wheel" is a pretty fair assessment for Lexus from 2006 - 2017. The only thing the brand really changed in that time was styling - everything underneath is- and was - old and outdated. Right now, LS, ES, LX, GX, RX, NX and CT are all on platforms that are more than a decade old, if the vehicle itself isn't as old. Great that LS and ES are about to be all-new, however. In 2006, Lexus had the best and most potent V6 in the industry, LS tied the W221 LS class or bested it in many areas, class-leading GS 450h, RX 400h, and the list goes on. Where is that same sense of "best in class" now? Aside from LC, it's gone.

2017/2018 is where things start to change with TNGA(-L) and new engines, but what about all the time in between - thats what I'm talking about? Outside of the LFA, Lexus has been on "cruise" for the last decade, when we got carryover 3IS and 4GS with different sheet metal but the same drivetrains, and the same can be said for RX and GX when you look at their engines and underpinnings. NX is one bright spot but built on the very old Corolla platform - however, it works. LS was forgotten for an entire decade. RC was born as the stepchild of the Lexus parts bin. The only all-new engine we got was the 8AR-FTS which has shown to be an "ok" engine compared to the competition. The updates to the UR V8 in the GS F, RC F and LC were great however, and I think it's one of Lexus best-ever engines - but still, a refresh of one that debuted over a decade ago.

I'm not discrediting what Lexus has planned in the future because I think it sounds great with LC and new LS as the starting points. But also, we need higher performance versions of every single SUV they sell. The IS, GS and RC need a 400hp V6 option. We need an active torque-vectoring AWD system to allow for performance versions of FWD-biased vehicles. Plug-in hybrids and EVs.

My point is that Lexus spent too long in a vacuum, and now that they've stepped out of it, the landscape is vastly different and they're going to have to play catch up at a pretty serious level to make it all work. In the meantime, Germans are relentless, some of the competition is reborn and the Koreans want Lexus' piece of the pie. Can they do it? I think so - but think about how much further along they'd be if they had their eyes open for the last decade.
 

spwolf

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We can agree to disagree. If you qualify "success" in sales numbers, Lexus has done fine for the last few years mostly due to continued global expansion - not because their product is great. If you look at the competitive set and make some logical guesses about where things are going in the next 2-3 years, Lexus is not in as great of a position, IMO.

Regarding the V8: Mercedes, Infiniti and others have ~400hp TT V6s available in their compact cars, and Lexus chose that as the top tier engine for LS? Sad. I am not saying its not a great engine because so far, it seems to be. However, we are talking about the LS here - Lexus' best and boldest thinking. There should have been a ~500hp TT V8 option if for nothing other than North America and Middle East markets where engine displacement and horsepower are consideration factors for a number of shoppers. Lexus always forgets that you have one chance to make a first impression and I think this is one area where they fumbled. 415hp LS 500, 500hp LS550 and 600+HP LS F would have sent a clear signal that Lexus is playing to win against Mercedes, Audi and BMW. Instead, they put in one engine that's equal to a Q50 and said, "We did it!"

With regard to "recipe for the world," we have no plug in hybrids and no EVs either. So Lexus is not even really playing the ICE horsepower game, nor alternatives. Lexus HSD is still a great system in every day execution and I know Germans are struggling with things like 48 volt mild hybrid systems, but where is the plan to counter Tesla, or BMW's i line, or the upcoming all-electric Mercedes? If Lexus' plan is to stick with hydrogen fuel cells, are they aware that 48 states in North America have no infrastructure to support it? What is the plan for all of these European cities that are outlawing ICEs in the next 10 years?

Success is certainly measured by the amount of sales and profitability. How else? Again, I understand that you would like twin turbo V8 and soon, but realistically it is something that is going to be enjoyed by hundreds of customers, not tens of thousands. If Lexus wanted to please the customers, they should have brought RX-L and UX last year and not in 2018.

In fact, whole LC is all about pleasing the fanbase - it is low selling vehicle, a fan service for Lexus faithful.

When it comes to Europe, first Lexus sales are small... but overall TMC has awesome position in Europe due to the hybrids letting them overplay germans when general public is starting to shun diesels. Some goverments have talked about 2030 and 2040, but this is just talk right now. Like China, who changed the plans to include hybrids, so will they... Germany, Italy, France will never do a single thing that can jeopardise a tiny part of their auto industry and same EU who is now talking about banning cars has been giving manufacturers a lot of leeway with emissions just few months back.. it is just (bad) politics.

Hybrids are only small step away from being plugins and evs. I am sure you followed threads where it was posted that Prius Prime is currently best selling plugin/ev in the world right now? It outsells Model S, Leaf, Bolt, and all the chinese cars.... not even sold in Europe yet.

And all they did is put relatively small battery in Prius. And won.

But sales are still tiny... should they shun engine development like many are saying they will? So should they actually not develop twin turbo V8 and put out EV?

I have my doubts on BEV sales worldwide without some crazy government incentives like in Norway where it is cheaper to buy Tesla S than well optioned 530i. They simply pay crazy amount of tax for non-plugin vehicle. Nobody is making money with EVs, so I can understand why manufacturers talk with PRs are promises but no cars out yet.
 

spwolf

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I agree with you.
Am pretty sure TMC is aware of the competition the LS is a good example. Very luxurious but yet cheap(go up against the top dog Mercedes BMW while still causing trouble for Hyundai G90 with the way it is price). Also almost all the cars in TMC line up is due for redesign(ES, IS, GS, Avalon, LX, GX...) new additional SUV (UX and RXL) too. So I don't think TMC would be loosing sale anytime soon. we all know the new trend is SUV. while Hyundai is adding a new sedan to its line, Lexus is adding two new SUV. Also the cars the new Hyundai is meant to go up against are all due for a redesign in the next 2 years(new 3 series, new Is). If Hyundai wants to be a threat, they need a RWD SUV. If they come out with a FWD SUV, Lexus would still be dominating the sale.

well I would like them to compete more with MB, and offer more models like MB does... Hyundai is simply not there yet.
Give us 3 more SUVs Lexus.
 

bogglo

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well I would like them to compete more with MB, and offer more models like MB does... Hyundai is simply not there yet.
Give us 3 more SUVs Lexus.
I agree. am really hoping Lexus try something New with the UX. Something in the line of 4WD or RWD.
 

spwolf

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I agree. am really hoping Lexus try something New with the UX. Something in the line of 4WD or RWD.

I hope they bring us C-HR with even better styling, interior and 180+ hp hybrid.

Market for these is specific, they want affordable price so it means FWD, small engined like GLA and X1.
 

supra93

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The G80 is outselling the GS about 2 to 1, so there's that.

Remember back in the 90s when German fanboys said Mercedes and BMW didn't have to worried about a fancy rebadge Toyota? Just saying...
 

Trexus

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The G80 is outselling the GS about 2 to 1, so there's that.

Remember back in the 90s when German fanboys said Mercedes and BMW didn't have to worried about a fancy rebadge Toyota? Just saying...

Exactly! Give Genesis time and eventually they will give the luxury market a run for it's money.

G90 = LS
G80 = GS
G70 = IS

GV80 = GX
GV70 = RX

Very soon Genesis will have luxury SUV's and they'll have a complete lineup. Genesis will need coupe's, convertible's and 4 door coupes.
 
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ssun30

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As to the Sony, Toshiba, Panasonic and death of japanese electronics industry, if thats going to happen to TMC, it will happen after GM, Ford, Hyundai, Fiat, VW, BMW and MB die first. It is most successful and most profitable manufacturer in the world

You always seem to base success of a company solely on sales, revenue, the hard numbers. But reality tends to be more complicated. In fact, Sony Ericsson (today the insignificant Sony Mobile) was a beast during the early stages of the smartphone revolution but it was already on the way to its grave since Day 1 when Apple launched the original iPhone. Changes take time, the fallen giants are usually the strongest when they start their demise.

Also, it is really, really strange that TMC has an extremely streamlined workforce among all automobile manufacturers, which is very, very unusual for a giant japanese corporation. I am inclined to believe their seemingly high efficiency and profitability are accounting tricks.

I never intended to compared the rise of korean electronics industry with Hyundai. In fact, Hyundai is in a disastrous situation where they have no answer to the SUV craze (they do now, but too late). TMC, on the other hand, is the one who started it in the first place, so no wonder it is the biggest beneficiary.

The automobile market is different from electronics in that, people do care about reliability and durability much, much more. This is why I believe TMC will never fall as miserably as Sony or Toshiba. But Lexus will suffer as its subsidiary because the premium/luxury market has more demand for "shiny gimmicky stuff" than pure reliability.
 

Ian Schmidt

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Sony (and Panasonic and Pioneer) failed in TVs because people switching to HD stopped caring about picture quality (any HD picture > any SD, or so uninformed consumers think). The Wife Acceptance Factor(tm) took over the purchase decision and demanded that TVs look more fashionable, take up less space, and be wall-mounted, and here the Japanese were trying to make them perform better instead.

There was a WAF takeover in cars too, it's called the SUV/CUV craze. It's just that Toyota/Lexus were in much better shape for that than Sony/Panasonic were to make flat, fashionable TVs.
 

krew

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I never intended to compared the rise of korean electronics industry with Hyundai. In fact, Hyundai is in a disastrous situation where they have no answer to the SUV craze (they do now, but too late). TMC, on the other hand, is the one who started it in the first place, so no wonder it is the biggest beneficiary.

The automobile market is different from electronics in that, people do care about reliability and durability much, much more. This is why I believe TMC will never fall as miserably as Sony or Toshiba. But Lexus will suffer as its subsidiary because the premium/luxury market has more demand for "shiny gimmicky stuff" than pure reliability.

I took your meaning to be Lexus' position in the industry as a whole, not as a comparison with Hyundai. We really transcended the OP question.

Remember back in the 90s when German fanboys said Mercedes and BMW didn't have to worried about a fancy rebadge Toyota? Just saying...

Your point is valid, but Lexus really did transform the industry in the early 1990s. Hyundai is in no position to replicate that seismic shift in luxury vehicles.
 

Ian Schmidt

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Your point is valid, but Lexus really did transform the industry in the early 1990s. Hyundai is in no position to replicate that seismic shift in luxury vehicles.

Yeah, the next two major inflection points for luxury vehicles (EVs and advanced driver assists) are already well-known, announced, and starting to ship, so nobody's going to jump in and pull an LS400-in-1989 again.

Personally I think Genesis sold as well as it did until now simply because it looked exactly like an S-Class from some angles, so you could get a little MB badge snobbery on the cheap. We'll see how things go with the cars now restyled to have something of their own identity.
 

mikeavelli

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The G80 is outselling the GS about 2 to 1, so there's that.

Remember back in the 90s when German fanboys said Mercedes and BMW didn't have to worried about a fancy rebadge Toyota? Just saying...

Its cheaper. Its newer. The GS is at the end of its life cycle. The GS sales goal was only 24k back when it debuted.

This is nowhere near a replication of what Lexus did in the 1990s. Hyundai has elevated themselves with Genesis. Toyota elevated the entire automotive industry and quite frankly the entire luxury market with Lexus. Big difference.

I think Genesis will continue to get their small piece of the pie but let's be honest. Some people won't even consider a Lexus today from the Germans even with over 27 years of success. Image to most in this market is everything.
 

supra93

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Its cheaper. Its newer. The GS is at the end of its life cycle. The GS sales goal was only 24k back when it debuted.

This is nowhere near a replication of what Lexus did in the 1990s. Hyundai has elevated themselves with Genesis. Toyota elevated the entire automotive industry and quite frankly the entire luxury market with Lexus. Big difference.

I think Genesis will continue to get their small piece of the pie but let's be honest. Some people won't even consider a Lexus today from the Germans even with over 27 years of success. Image to most in this market is everything.

We been over this. Its not newer. It is a rebadge of the 2014 Genesis sedan. I guess since the Scion FR-S is now the Toyota 86 it makes it newer than the Ford Mustang? And 24k unit isn't something to brag about. The E and 5er sell way more than that.

Yes it is cheaper? Better value won't you say? Hyundai giving people want they want and for a good price and their sales go up. But that's an odd concept for Toyota to understand. A prime example is how long have people been asking for a 3rd row CUV now, or even something as simple as Apple carplay?

Lexus was great in the 90s, not so much right now IMO. I think if Toyota/Lexus doesn't listen to customers needs and wants, than they will lose market shares.
 
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CIF

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Wow this is quite the discussion here lol. So much strange information being thrown around. :confused:

I think I'll stay out of this one.

zGHQb4O.gif
 

Ian Schmidt

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From the sounds of people on this thread, I'm going to be lucky to be able to test drive a 5LS before Toyota goes out of business. Oh noes!

PS: anyone notice Mercedes cut the S-Class base price in the US by $5000?