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The Lexus NX, an all-new, upscale compact SUV, should be in showrooms in a few months. (Toyota)
The Lexus NX, an all-new, upscale compact SUV, should be in showrooms in a few months. (Toyota)

Brand Strategy

No. 1 in sales? The Germans can have it, says Lexus Add to ...

Lexus, says the director of Toyota’s premium brand in Canada, does not aspire to be the world’s No. 1 premium brand by sales. Leave the sales race to other luxury brands, most notably the Germans, says Cyril Dimitris.

“We realize that with the product breadth of the Germans, being No. 1 is unlikely. We’re not pursuing that,” he says. “What we want is sustainable growth by broadening our product offerings.”

Do not look for Lexus to chase big-volume sales with $30,000-ish rides similar to the Mercedes-Benz B250 ($30,500). “That price point is important, but we don’t see it [for us],” he says.

Lexus may be backed by Toyota’s financial clout, but the brand is unwilling to aggressively subsidize residual values on new models to lower monthly lease payments. That strategy juices sales at the risk of creating a glut of models returning to Lexus in two, three, four years, when leases expire.

Truthfully, it’s reasonable for Lexus to decline a race for No. 1 by sales. Lexus sales in Canada run about two-thirds those of Audi, half of BMW and considerably less than half of Mercedes. Last year BMW AG sold 1.66 million vehicles, compared with just north of 500,000 for Lexus. Lexus sales on the year are up 16.6 per cent, but cannot reasonably grow fast enough to run down the Germans.

What, then, defines success for Lexus? Measurable customer satisfaction. Indeed, the latest J.D. Power and Associates Canadian Customer Commitment Study ranked Lexus dealerships among the very best. Lexus resale values have always been strong and Lexus has led J.D. Power’s three-year Vehicle Dependability Study for the last three years.

Still, the goal is to sell more cars every year. For this, the 52-year-old Dimitris seems a good fit at Lexus. Stylishly dressed in a well-cut grey suit and sporting a diamond in his left ear, Dimitris recently cut a CD on which he sings and plays the guitar, and he’s actively involved in Toronto’s arts community.

Lexus needs to jazz up its image and its products. That requires creative leaders who are willing to be different. He may not be Toyota’s version of Tesla’s Elon Musk, but he is a refreshing change from button-down Lexus types.

He’s also in the fortunate position of leading Lexus when the brand is on a product roll. The next all-new model heading to showrooms is the NX, an upscale compact SUV with styling marked by edges, angles and a massive spindle grille.

Details about pricing, fuel economy, tow ratings and such won’t come until closer to the fourth quarter launch date, but Lexus will say that the NX gets two power train variants – 2.0-litre, four-cylinder gasoline turbo and a gasoline-electric hybrid – and all-wheel drive. A racier F-Sport version will also be in the lineup.

The NX, says chief engineer Takeaki Kato, is based on a combination of mechanicals adapted from the current Toyota RAV4 and Lexus CT. The 2014 Lexus CT 200h is getting styling updates inside and out, too, and Dimitris is quick to note that the F-Sport package has been enhanced to improve handling and comfort.

The car Lexus is most excited about, however, is the upcoming RC/RC F coupe. When it hits showrooms this fall, Lexus will boast of having a true competitor to the BMW M4. The RC F coupe we saw at the Detroit auto show earlier this year had a 5.0-litre V-8 rated at more than 450 horsepower, and with a 0-100 km/hour time less than 5.0 seconds. Next year, Lexus will replace the current RX sport-utility.

These new models are coming on the heels of an updated IS 250/350 in showrooms now and the NX coming later this year. And this product offensive is being accompanied by sexier marketing.

“We’re working on how we execute to create emotion around the product,” says Dimitris, noting a push for “edgier” advertising with a focus on craftsmanship and design. Lexus has commissioned several short films from the respected Weinstein Co., using them as a way to reflect the brand’s turn to more right-brain sensibilities

If you want to know Lexus, watch the movies. You most definitely won’t find any sales race references there.

The writer was a guest of the auto maker

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