[vasudeva]

This posting should have been on September 1, 2009 but anyway here it goes:

Ward’s Auto World has recently posted an article on 20 years of Lexus. In the Sep 2009 issue it has noted that when Toyota launched Lexus in the US on Sept. 1, 1989, most industry watchers were skeptical whether Lexus could compete with the Germans or the Americans. In fact, Eberhard von Kuenheim (managing director) from BMW (AG) back then had regarded (Lexus) a mere poseur in the marketplace. He basically sniffed and said, "They have no heritage." A lot of people sort of considered them overreaching." Ross Roberts, then vice president and general manager of Ford Motor Co.'s Lincoln-Mercury Div., told Ward's in 1989, "We don't expect to lose many buyers to (Lexus)." Even some Toyota dealers weren't convinced a luxury brand was the smartest investment for the company at the time. "Not everybody thought this was a good idea to split out the resources of the company; (they thought) that we should concentrate on growing Toyota," Dave Illingworth, Lexus' first general manager, says of dealers' reservations.

But Lexus quickly proved naysayers wrong. By the close of 1991, Lexus had overtaken BMW and Mercedes in US sales, and by 2000 Lexus became the No.1 selling luxury brand in the US. However, it should be noted that amongst the super-luxury segment ($50K+), Merc still rules.

About 75% of the first crop of Lexus dealers also were Toyota dealers, chosen based on their customer-service scores. Whether he was a competitive dealer or Toyota dealer, he had to have exceptional customer satisfaction. Property and necessary funds to build a Lexus store, at the time $3-5 million, were important but secondary. In comparison, a new 2009 Lexus store in Miami is setting back one dealer $75 million.

However, 2008-09 have not been kind to Lexus. Ward’s data for Jan-Jul 2009 shows Lexus sales down 34.1% to 90,060 units, placing it behind BMW (93,563 units) for the first time in 12 years. To expand sales, Lexus studied BMW's playbook and introduced in recent years variants of existing models, trying to carve out a niche in luxury hybrid-electric vehicles, for example. Lexus now is launching the HS 250h dedicated HEV, an entry-level luxury sedan geared toward fuel economy rather than performance. Toyota CEO Akio Toyoda has also recently confirmed a supercar based on the LF-A concept. It reportedly will start at more than $200,000. This is more to create a halo than generate sales.