Will Genesis hurt Lexus?

[Gecko]

Do you ever think you might have just outgrown the brand? Maybe its time to move on...Lexus is clearly attracting new buyers as there worldwide sales are up 8%....they are after new younger buyers.

How old do you think I am? 🤣

 

[Gecko]

Thanks and yes I do agree with a lot of what you say too.

Dramatics? I agree! You saying Lexus may lose 200k IS units of sales and hundreds of millions of dollars as a complete hypothetical, literally one day after it's global launch, is not rooted in reality whatsoever and sounds quite dramatic to me. You definitely give off the eternal pessimist vibe, its not exactly a secret how negative you are on Lexus.

When it comes to competition, the golden rule is to always punch up and never punch down. Why should Lexus even give Genesis the time of day? Which piece of the pie did the Genesis take from Lexus that they absolutely need to claw back? The biggest chunk of sales lies within the top US 3 its not a big margin of difference in sales up there. Thats the major disconnect between enthusiasts and reality. You think if Lexus doesn't do X,Y,Z, to excite the enthusiast community, they will fail hard in the mass market. In that case, yes, your business sense is off and is being blinded by your passion for the brand. Don't misunderstand me though, its great to have passion, as we all do here. I'm often blinded by my own passion as well.

I don't think anybody here wants Lexus to be a complacent company. I am not shy to call out Lexus when necessary but since the culture here leans heavily negative, I'm of the belief that some positivity is in order. Is that allowed here?

Maybe I need to clarify my IS point: I am certainly not expecting them to make 200k sales with a redesign of a 7 year old model - my point is that this is a car that has done relatively well over it's lifecycle, and it's sad to see them give it 50% effort when something more substantial would perform better (especially after 7 years). People know and have loved the IS, and I do not want to see Lexus let it wither away. If they do, losing IS buyers and GS buyers (even though there were a lot less of them) removes appealing entry and mid level products for a certain group of people, and makes it harder to recapture those folks and graduate them up the lineup to other things like LS, LX, LC, etc.

With regard to Genesis, I am not too worried about them right now and I doubt Lexus is either. Genesis hasn't taken anything from Lexus. But... past performance is the best indicator of future success, and the last 10 years at Lexus have been pretty rough. If we go another 10 years with FWD/old platforms, 300 horsepower engines and a lack of advancement, Genesis WILL be a problem. Looking at the product Genesis has now is encouraging, but the luxury market is harder to crack than almost any other, and Genesis has a looooooong road before Lexus needs to be losing sleep. I think we can agree on that.

On your point of enthusiasm vs. business sense: Everybody has their own idea of what success looks like, right? Some people here say, "Lexus doesn't need to chase BMW, Audi and Mercedes - they need to blaze their own path." Then there are others who think they need to be neck and neck with the Germans. I think it's some of both, but as I pointed out in another thread, Lexus has:

• No 4 door coupes
• No CUV coupes
• No sports cars
• No performance CUVs
• No PHEVs
• One BEV
• A broken performance brand

This isn't me crying about Lexus not meeting my needs as an enthusiast - this is looking at the "US 3" that you have identified as Lexus' biggest competition and realizing that they are not at par, either in terms of the depth of their product or the breadth of their lineup. Those are just the facts. With that many holes in the lineup, refreshing a 7 year old car kind of stings a little more because the other Lexus options are already so limited -- and old.

You are welcome to be as positive as you would like. In fact, I think it would be great to hear your POV about what Lexus is doing well because it seems pretty hard to understand and find good will in some of the decisions over the last decade. I'm all ears.

 

[Sulu]

I have never heard the Lexus logo is like a Mercedes argument before. Respecting your POV, I do not agree. Lexus pinned their logo to the grill at the time, Mercedes was on the hood popped up like a Cadillac or Buick back then.

I did not mean to imply that the Lexus logo was derivative, only that its styling once was. Genesis had both a derivative styling language and derivative logo.

 

[zeusus]

On your point of enthusiasm vs. business sense: Everybody has their own idea of what success looks like, right? Some people here say, "Lexus doesn't need to chase BMW, Audi and Mercedes - they need to blaze their own path." Then there are others who think they need to be neck and neck with the Germans. I think it's some of both, but as I pointed out in another thread, Lexus has:

• No 4 door coupes
• No CUV coupes
• No sports cars
• No performance CUVs
• No PHEVs
• One BEV
• A broken performance brand

Literally none of these on your list are drivers of sales for Mercedes or BMW. So where is the business case for Lexus to jump the gun and dive into these segments?

I want more Lexus models like everyone else. I have tempered my expectations. Wild adventures in model diversity is not always a success. MB made a pickup X class, that failed miserably. BMW announced major cuts ($13B) in 2019 as their model did not pan out as originally planned and blew up their own margins.

 

[Gecko]

Literally none of these on your list are drivers of sales for Mercedes or BMW. So where is the business case for Lexus to jump the gun and dive into these segments?

Well, dangit! I tried to not be negative so I left out the fact that the LX is 13 years old, the GX is 11 years old, the NX and RX are aged out products that sell primarily with steep discounts, the RX L was botched, the LS is a flop, the LC doesn't sell, the GS is discontinued, the ES is less diversified/appealing than the Avalon or Camry, and the UX is another half-assed platform engineering exercise, so growing into new segments is really the least of Lexus' problems... AND I tried to give you the opportunity you requested to be positive... but this is your response? Let me know if you want to have a conversation or present something worth reading.

Have a good night.

 

[zeusus]

Well, dangit! I tried to not be negative so I left out the fact that the LX is 13 years old, the GX is 11 years old, the NX and RX are aged out products that sell primarily with steep discounts, the RX L was botched, the LS is a flop, the LC doesn't sell, the GS is discontinued, the ES is less diversified/appealing than the Avalon or Camry, and the UX is another half-assed badge engineering exercise, so growing into new segments is really the least of Lexus' problems... AND I tried to give you the opportunity you requested to be positive... but this is your response? Let me know if you want to have a conversation or present something worth reading.

Have a good night.

You made that list, not me.

I asked for the business case for Lexus to compete in the segments you listed when those are not sales drivers for Lexus' competitors. Was I wrong? Are those segments sales drivers for MB/BMW? Where are the numbers? We all clearly know they aren't, maybe Lexus should just chase after all trends until they're bankrupt?

After I challenged you on that, you then attack Lexus' entire lineup (which has nothing to do with your original point) and say my counter argument wasn't worth the conversation?

Don't you at all feel curious about complaining in one post that Lexus doesn't have a sports car and then complaining about low LC sales in the post immediately after? Sports cars sell in low numbers. To not be able to see your own contradictions that close together is amazing.

 

[LexsCTJill]

Well, dangit! I tried to not be negative so I left out the fact that the LX is 13 years old, the GX is 11 years old, the NX and RX are aged out products that sell primarily with steep discounts, the RX L was botched, the LS is a flop, the LC doesn't sell, the GS is discontinued, the ES is less diversified/appealing than the Avalon or Camry, and the UX is another half-assed platform engineering exercise, so growing into new segments is really the least of Lexus' problems... AND I tried to give you the opportunity you requested to be positive... but this is your response? Let me know if you want to have a conversation or present something worth reading.

Have a good night.

Lexus worldwide sales were up 8 percent last year. something like 850K. How’s Genesis doing?

 

[Gecko]

Don't you at all feel curious about complaining in one post that Lexus doesn't have a sports car and then complaining about low LC sales in the post immediately after? Sports cars sell in low numbers. To not be able to see your own contradictions that close together is amazing.

You think the LC is a sports car...? 🤣

 

[Gecko]

Lexus worldwide sales were up 8 percent last year. something like 850K. How’s Genesis doing?

2019 Genesis sales were up 113% YoY.

 

[LexsCTJill]

2019 Genesis sales were up 113% YoY.

Nice. And how many retail sales is that?

 

[Tragic Bronson]

Nice. And how many retail sales is that?

What difference does it make? Genesis was outsold by Lexus, who were both outsold by BMW and Mercedes. Would you spend time counting pennies than dollar bills?

 

[zeusus]

You think the LC is a sports car...? 🤣

I did consider if I had to clarify in my post that the LC is a GT but I didn't think you'd be petty enough to point that out from all of the relevant points I made in my post.

Too bad I was wrong about you. And none of this hides the massive contradiction you just made.

 

[Levi]

Lexus LX and GX do not sell in huge numbers either compared to UX/NX/RX. Maybe cancel those too and make Lexus like Infiniti, a brand with 3 FWD CUVs, no BEVs, in their portfolio? Yes of course the LC F, that no one knows where it comes from and how it relates to those 3 CUVs.

 

[Trexus]

I saw a grey GV80 today going north bound on the 57 freeway today. Looked awesome. Genesis is slowly expanding (I'm sure another SUV/CUV will come and maybe a coupe as well). Times are tough right now but in the future Genesis will do just fine.

 

[ssun30]

TLDR: I applaud Genesis engineers for making GOOD products, but these are the WRONG products.

The G70 or the 'G90 with wonderful V8 engine' do very little for the brand, not to mention that V8 will get replaced by a V6TT in two years anyway. Hyundai is playing the catch-up game at the wrong time. They were doing exactly the wrong thing I wish Lexus wasn't doing: trying to win a game that isn't relevant any more.

This is a very real question for those praising Genesis: they have some compelling products that you wish Lexus was making, but would you pick those products over similar offerings from BBA? My answer is no. Compact sedan? 3 series. Medium sedan? Maybe G80 but I would pay more for E-Class. Full-size? Definitely the LS hybrid.

What will really elevate the brand is the GV80 and its EV variant. Hyundai's big problem is lack of a scalable hybrid architecture for high-end applications. Their electrification technology is up there with at least Honda in the short term, so I don't doubt they will have compelling PHEV/BEV SUV solutions. In the long term South Korea is a lot behind Japan, USA and China in EV and autonomous driving technology, so they will require a lot of support from the government to fund research.

As to the question will Genesis hurt Lexus? The answer is a definitive no. They will have nothing that can challenge the next-gen NX, which we know will be a very dominant product in its segment. They will also have nothing to challenge the next-gen RX, because even BBA could not not compete against the current generation RX which is in its sixth model year. Genesis is in no position to challenge Lexus in the cut-throat SUV market.

So in a best case scenario (Hyundai realizes how to do marketing and distribution correctly, but that's a lot to ask for them) Genesis can establish itself as a solid Tier 3 brand in North America, capitalizing on Infiniti's downfall. In the rest of the world? No chance.

 

[Levi]

BBA, I'll never be seen dead in one of them (except in the trunk by some Russian/Turkish mafia). So alternatives are needed, and Genesis is one of them. I don't like CUVs, but if it has to be one, I'll never accept any that is FWD, must be RWD.

The question of this thread is probably indeed not correct. No Genesis will not hurt Lexus. Lexus did hurt the Germans, but the Germans did not hurt Lexus. Lexus did not hurt Infiniti, nor did the Germans, Infiniti hurt themselves. The only brand that hurt others was Tesla, but even then, not really hurt, just impacted, then not even directly, but rather the competitive environment.

So the question would rather be, "Will Genesis make it? And parallelly will Lexus hurt themselves?", which if to both questions the answer is yes, Genesis will be in the game, and Lexus not, so Genesis wins, Lexus loses. If Lexus does not hurt themselves, but Genesis makes it, it will be natural competitive environment targeting different consumers in the grand premium market with a usual fight for converts.

I think as in many other subjects in life, the traditionalists (RWD low cars) will simply see their product diminish (also the Germans), and will always have less choice with increased mediocrity.

 

[LCLFV]

Sheesh, I wanted to take back seat, but for once I feel like I need to step in because I feel like there's some common sense missing in this discussion. Lexus outsells Genesis because Lexus has a wider range of products that are more entry-level. This is no rocket science. Even the Germans are using the same tactic with cars like the A-Class and 2 Series Gran Coupe.

As others mentioned, most of Lexus's lineup (and sales) come from cheaper Toyota-derived FWD vehicles. This is not the case with Genesis, which features no cheaper Hyundai-derived vehicle in their lineup. The few vehicles that Lexus has that do directly compete with Genesis are either selling poorly and stagnating (LS and IS), or outright dead (GS). Sales numbers aren't that far off either when you compare those sedans to their Genesis counterparts, in fact the Hyundai Genesis G80 has outsold the GS every year since it was launched in 2015. So let's not pretend that Lexus, which has an established brand name and dealer network, is much more successful than Genesis with their respective competing products.

There seems to be a fundamental misunderstanding of what Genesis is and how it was launched. Their strategy was nothing like Lexus. Think about this way: instead of launching Lexus, what if Toyota exported the Crown into their US dealerships? And then some time not long after, they decided to export the Century. On a whim, they decide to make a luxury brand named "Crown", keeping the Maserati-like logo that was originally on the Crown as a symbol of the whole brand, and then rebadging/renaming the Crown and Century under different names under the "Crown" brand so to win over badge conscious US buyers who didn't want a mere luxury Toyota.

Remember all that? Okay, now substitute "Toyota" with "Hyundai", "Lexus" with "Genesis", "Crown" with "Genesis", "Century" with "Equus", and "Maserati" with "Bentley". And that's how Genesis came to be. It was never some decade-long piece of intensive research like the LS that was designed specifically to target the US market. They're KDM products supported by their own domestic market that Hyundai brought over to sell because it was just free money laying around. This is a luxury that Lexus does not have with most of their vehicles, which compete with their own domestic JDM products with very similar underpinnings. The Crown and GS are prime examples of this, where the GS was sacrificed because everyone in its own home market would have rather bought a Crown. Lexus didn't even have their own dealerships in Japan until 2005.

The key takeaway from all this is that Genesis has the support it needs to continue developing these products that Lexus cannot, because their exists a core base for it in their home market, which is also why they developed sedans before crossovers. So long as their home market supports them, Genesis will continue living on. Being able to compete with the Germans or gaining some level of notoriety in America or Europe would just be the icing on the cake.

Now I return to my slumber.

 

[Joaquin Ruhi]

@LCLFV : Wow! That was perhaps the most awesome first post I've ever seen around here. Spot-on. Welcome board!

 

[LexsCTJill]

Sheesh, I wanted to take back seat, but for once I feel like I need to step in because I feel like there's some common sense missing in this discussion. Lexus outsells Genesis because Lexus has a wider range of products that are more entry-level. This is no rocket science. Even the Germans are using the same tactic with cars like the A-Class and 2 Series Gran Coupe.

As others mentioned, most of Lexus's lineup (and sales) come from cheaper Toyota-derived FWD vehicles. This is not the case with Genesis, which features no cheaper Hyundai-derived vehicle in their lineup. The few vehicles that Lexus has that do directly compete with Genesis are either selling poorly and stagnating (LS and IS), or outright dead (GS). Sales numbers aren't that far off either when you compare those sedans to their Genesis counterparts, in fact the Hyundai Genesis G80 has outsold the GS every year since it was launched in 2015. So let's not pretend that Lexus, which has an established brand name and dealer network, is much more successful than Genesis with their respective competing products.

There seems to be a fundamental misunderstanding of what Genesis is and how it was launched. Their strategy was nothing like Lexus. Think about this way: instead of launching Lexus, what if Toyota exported the Crown into their US dealerships? And then some time not long after, they decided to export the Century. On a whim, they decide to make a luxury brand named "Crown", keeping the Maserati-like logo that was originally on the Crown as a symbol of the whole brand, and then rebadging/renaming the Crown and Century under different names under the "Crown" brand so to win over badge conscious US buyers who didn't want a mere luxury Toyota.

Remember all that? Okay, now substitute "Toyota" with "Hyundai", "Lexus" with "Genesis", "Crown" with "Genesis", "Century" with "Equus", and "Maserati" with "Bentley". And that's how Genesis came to be. It was never some decade-long piece of intensive research like the LS that was designed specifically to target the US market. They're KDM products supported by their own domestic market that Hyundai brought over to sell because it was just free money laying around. This is a luxury that Lexus does not have with most of their vehicles, which compete with their own domestic JDM products with very similar underpinnings. The Crown and GS are prime examples of this, where the GS was sacrificed because everyone in its own home market would have rather bought a Crown. Lexus didn't even have their own dealerships in Japan until 2005.

The key takeaway from all this is that Genesis has the support it needs to continue developing these products that Lexus cannot, because their exists a core base for it in their home market, which is also why they developed sedans before crossovers. So long as their home market supports them, Genesis will continue living on. Being able to compete with the Germans or gaining some level of notoriety in America or Europe would just be the icing on the cake.

Now I return to my slumber.

For the record: When Lexus exported the Lexus LS400 to the states and UK, the rest of Japan and Asia received the car as a Toyota Celsior. Not much different than what Hyundai is Doing today. Further, the G70 shares it platform with the KIA S.

Finally, at the time of Lexus inception in the US, they had already sold some premium models that were RWD...Supra, Land Cruiser as well as the Toyota Cressida with the I6 were available at the time. For a while there the Cressida and the LS400 were sold side by side from the Toyota/Lexus brand. The success of Lexus was the result of the excellent brand perception of Toyota at the time, very different for Hyundai/Genesis in the modern era.

 

[Gecko]

Lexus LX and GX do not sell in huge numbers either compared to UX/NX/RX. Maybe cancel those too and make Lexus like Infiniti, a brand with 3 FWD CUVs, no BEVs, in their portfolio? Yes of course the LC F, that no one knows where it comes from and how it relates to those 3 CUVs.

Agreed. If everything is just going to be a numbers game, I guess we would need to cut LX, GX, LS, LC, RC and IS. So then I assume a Lexus lineup of UX, NX, RX and ES would be the only one worth having.