Lexus ‘resets its compass’ to cope with new global economic realities

Georgia Lewis

• Last Updated: November 04. 2009 8:44PM UAE / November 4. 2009 4:44PM GMT

Toshio Furutani, the senior managing director of Global Lexus. Courtesy of Global Lexus

The Lexus brand has proved to be an enduring success in this region. Strong sales figures, such as a 118 per cent increase in Lexus SUV sales for Q1 2009, are routinely reported for Toyota’s premium brand in the UAE. This year marks the 20th anniversary of the marque.

In early 1989, Lexus was launched with two models, the ES250 and the LS400. The ES250 was the entry level vehicle and the LS400 was the brand’s flagship. Since then, the brand has developed a reputation for creating luxury vehicles with good quality control at a more affordable price than many European competitors.

Toshio Furutani, the senior managing director of Global Lexus, says the brand’s concept first came about in North America in the early 1980s. “Lexus was initially developed after learning that many of our existing Toyota customers were looking for a luxury car with the quality and reliability of Toyota,” says Furutani. “After studying the luxury car offerings at the time, we felt there was a unique, unmet need ... that we could fill, and this became Lexus.

“Generally, we are most often compared to and shopped against BMW, Audi and Mercedes-Benz.”

The brand philosophy sets Lexus apart from other premium badges, according to Furutani. “Basically we are developing Lexus to be the benchmark of what we call ‘Progressive Luxury’, which is a type of luxury that doesn’t stand still or rely on heritage to define it’s products and services,” he says.

“We follow a philosophy called the ‘Yet Philosophy’ – this is the idea of pursuing uncompromising solutions by combining seemingly incompatible ideas, such as high performance yet highly efficient. Another example is high function yet very easy to use.”

Multiple awards and technical innovations are seen by Furutani as the biggest achievements for Lexus over the past 20 years. He says these include customer service awards, creating the luxury crossover segment with the RX300 in 1998, the introduction of a hybrid luxury vehicle with the RX450h in 2005 and subsequent hybrids since then, as well as Pre-Crash Safety technology and the world’s first eight-speed automatic transmission in the LS460.

Furutani describes the global economic downturn as “a turning point for Lexus.”

“This is an opportunity to quickly reset our compass to align with the rapidly changing luxury market,” he says. The company will focus on advances in safety and convenience as well as further development of “environmentally responsible solutions.”

At the 2009 Frankfurt Motor Show, Lexus launched the LF-Ch hybrid, the LS600h hybrid, a revised IS, GS and LS. At the Dubai Motor Show this year, Lexus will also show a race car version of their Supercar LF-A concept.

Furutani is quick to emphasise that a less robust economic climate is no excuse for complacency. “During tougher business climates, we reconfirm our core values and not reduce our standards,’ he says. “So, while we may reduce our marketing spend and business expenses, we don’t cut corners in product quality or customer care.”

Since the downturn, Furutani says the US market is gaining momentum and Canada is ahead of its 2008 sales already.

In the GCC, Furutani says the region continues as one of Lexus’s strongest market shares, and sales have kept pace with the global average “consistently posting number one or number two in luxury sales.”

“We look forward to great opportunities to grow our Lexus business in the GCC, based on our customer and dealer feedback.

“In our second largest market, China, we have started to see a very strong rebound and in fact we expect them to post strong gains for the remainder of the year,” he adds.

Progressive, environmentally friendly luxury is the mantra that Furutani hopes will carry Lexus forward. “Our investment in hybrid technology will continue to be a strong example of this idea and we also have plans to expand our line-up with new luxury concepts and very unique derivatives of existing models,” he says.