Brand 'journey' for Lexus

Japanese manufacturer awaits new product to cement in place its performance/hybrid marketing strategy
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The Lexus CT200h bookmarks a new era for the Japanese prestige brand.

During the launch of the new hybrid hatch, Lexus Chief Executive Tony Cramb explained it quite succinctly: "CT reinforces our hybrid commitment."

Cramb went on to explain that there has been no vehicle as small as the CT200h in the Australian product range since the first-generation IS200 of 1999. Demonstrating the progress the company has made since the release of the IS200, the CT200h is lighter, faster, uses half the fuel and is more spacious inside than the rear-drive IS200.

It's a prime example of what the company has in store for the future and it fits the brand's two-pronged product marketing strategy of performance and hybrid, providing a point of distinction from other brands. While the German prestige brands in this country have pinned their hopes on diesel as a frugal alternative to conventional petrol engines, Lexus is committed to promoting hybrid drivetrain alternatives.

But Audi, BMW and Mercedes-Benz aren't the only companies battling with Lexus for luxury market share. There are other European marques selling cars here. Volvo, for instance, has made no secret of its determination to recapture market share lost to Lexus in the past. Saab is making a return to Australia, with the 9-4X SUV possibly a rival for the Lexus RX.

And while it's not a European marque, Nissan-owned Infiniti sees itself as more European in character than Lexus, which has globally enjoyed stronger sales success in America over the years. Cramb told the Carsales Network that he was confident Lexus will cope with the re-emergence of Saab, the resurgence of Volvo and the confirmed start up for Infiniti.

"From my point of view, I think competition is good," he said. "I have a fundamental philosophy that the more competition there is, the stronger it makes us all.

"I think it's good that Infiniti's coming in, because at this point in time, the market's dominated by the Europeans and us, so we... are the fourth luxury marque and we have aspirations higher than that."

Cramb believes Audi is the hot ticket in town at the moment, but a lot of that is a matter of having new product entering the market on a near constant basis. Certainly the introduction of the Q5 model helped the German prestige importer to sell more vehicles in 2009 than it had in 2008, despite the decline in consumer confidence at that time.

"Audi... they're in a purple patch in their product life cycle at the moment -- and they have a couple more to come, so they're a very strong competitor and doing a really good job at the moment, but it's a pretty cyclical business and it will come and go," he said.

"So far as [Volvo and Saab are concerned], they're kind of on our radar, but not really in our sights. Volvo is doing a terrific job at the moment, on the back of some good product, but we don't really see ourselves competing with them, directly. We're more aimed up at Mercedes, BMW and Audi."

Is there a lesson for Lexus in Audi's cash-intensive marketing and promotion?

"The secret to Audi's success is the product; there are lots of different variants," Cramb replied. "There's no doubt that they're throwing all kinds of marketing money at it, but if you don't have the substance, in the end that's a waste of money, right?"

To illustrate the position for Lexus, Cramb cited the AGP Celebrity Challenge (pictured), which was "a fairly major undertaking" for the company. The implication seems to be that the money was well spent for a new product line like the CT200h.

"It's the sort of marketing that brings attention to a little brand like Lexus -- and puts us in a position that we're not traditionally put in."

"At the same time, the key to this business is great product and we've got a pipeline of great product... for the foreseeable product plan future we've got a new car every year -- at least one..."

So if the CT200h marks a change of pace for the Lexus brand, how then does the rest of the product range fit in with the image Lexus wants to project?

"I think we're on a journey with the brand image. I refer to us as a brand on the move, so I think we've got a very proud history, but we just turned 21 this year -- and I think it's a nice kind of analogy. We're sort of coming of age, as a brand.

"And while we're very proud of our history, we're very excited about the future. I think the development on the performance side of the business is one stream that's kind of haloed by the LFA -- and our other stream, if you like, at the moment is hybrid.

"We're looking to be unique and innovative, we're not looking to copy the competition; we're looking at going our own way. Our brand will develop as we launch more and more good cars," Cramb concluded.

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