SALZBURG - It might have been too obvious if Toyota Motor Corp.'s luxury division held its press preview for the fourth-generation Lexus LS 460 sedan in the industrial city of Stuttgart. That's the hometown of arch-rival DaimlerChrysler AG's luxury car division, Mercedes-Benz.
Instead, the Lexus event is staged in this venerable Tyrolean city, which is just 189 miles (302 km) from Mercedes' headquarters; close enough to get the point across. The '07 LS 460 flagship is intended to make waves in the marketplace and take aim at the competition, especially Mercedes.
Moreover, Lexus executives say holding the preview in Austria shows the Japanese luxury car maker's determination to increase its global presence - including, ironically on its home turf, Japan, a market Lexus entered only last year, where it faces a fair amount of competition from, yes, Mercedes, as well as BMW AG. Before then, Lexus was sold under the Toyota brand name in Japan.
The new top-of-the-line LS 460 sedan is intended to move the Lexus brand further upmarket to the high-end prestige segment, where vehicle prices start at about $70,000Mercedes still enjoys the cache of being the luxury car," Chris Hostetter, Toyota's vice president-advanced product strategy, tells Ward's. "When you see celebrities arriving at a red-carpet event, they're usually driving a Mercedes, not a Lexus. We'd like to change that." (Sorry, there are no celebrity points gained from Mel Gibson being in a Lexus LS at the time of his infamous drunk driving arrest in Malibu, CA.)
Lexus debuted in the U.S. 17 years ago, positioned as a brand appealing to "new-value" buyers generally less interested in status and more concerned with quality, dependability and comfort, says Hostetter. "That appealed to a lot of women buyers at a time when luxury cars were defined by their large size."
Lexus leads the mainstream luxury segment, part of an overall premium market that accounts for 1.9 million unit sales in the U.S.
"The high-end prestige luxury market, piloted by Mercedes, is much smaller at 100,000 vehicles, but sales are highly profitable and have doubled in five years," says Lexus Group Vice President Bob Carter.
Yet it is more than just going after higher profits, Carter says. Lexus learned that by interviewing executives from European prestige brands, such as Louis Vuitton, Gucci and Prada.
"We discovered that these luxury icons make exceptionally high-end products to build their image and then rely on mainstream luxury items for the bulk of their business," says Carter.
"The secret of success is setting the bar extremely high for prestige customers, and that's what we plan to do with Lexus and the all new LS models, including the LS 600h hybrid," which debuts after the LS 460 goes on sale in October.
The LS 460 will come in a standard-wheelbase model, but also, for the first time, in a long-wheelbase version. That's intended to appeal to LS owners looking to move up and owners of competitive vehicles looking to move over, says Carter.
He says a marketing campaign - aimed at affluent and influential consumers dubbed "affluentials" - will tout '07 LS "firsts," such as an 8-speed automatic transmission and body temperature-sensing climate control.
Detractors might question the need for an 8-speed transmission. But Lexus executives point out that it one-ups the 7-speed transmission on the Mercedes S500.
Upcoming ads for the car will close with the tagline, "The Pursuit of Perfection." What went into styling the headlamps is one example of that quest, says Carter.
Designers wanted crystal-like properties to the projector front lights. So an engineer used the base of a Baccarat glass as an inspiration. But when the lens diameter was increased, the crystalline appearance decreased, making it apparent the lens was of a resin material.
"To better understand the properties of a 'crystal' lens, the chief engineer and his team actually made a headlamp out of crystal," says Carter. "Data was gathered on everything from transparency and the refractive index of light, to surface roughness."
Based on that, a new lens was molded and hand polished and "the inherent look of crystal was reproduced," says Carter.
Such exacting efforts explain why the vehicle's product development took more than four years. That's a relatively long time in an age where some vehicles can be fully developed in only a year, notes Takeshi Yoshida, managing officer of Lexus research and development.
A long-term thinker, Yoshida tells Ward's he's mapping automotive concepts 20 years out, using the guideposts of safety, environmental friendliness and driving enjoyment.
