Lexus hasn't made a profit in 2 years...

[CTK]

They have entries, but wow are they mired by late projects and aging models.

How much does this really matter though? See my thoughts in bold:

IS- old as hell, no longer particular competitive Whole segment is dying; 3/4 series sales are half off their peak and all new entrants are down... what's the point of updating
RC- easy to forget its even made. Never was top of class What is? I think they are a nice alternative to the formulaic German entrants
ES- fresh, looks sharp, great entry And a printing press
GS- stale, probably won't even see a next generation Bums me out, easily my favorite Lexus, and again in a dying segment... what about it needs updating, besides the infotainment? Please don't say it needs a generic ass 3.0TT for people to void warranties with a tune on
LS- sharp, but not good enough to best the class. They made it more sporty which alienated many loyal fans, but didn't make it entertaining enough for S-class and 7-series crowd to defect. Why is the back seat less spacious than it should be? Why is the infotainment so dated and non-intuitive? What a miss. Again, dying segment; honestly surprised they even bothered. I preferred the old one
LC- as most big coupes do, the sales dropped off after the hype. I actually like these and hopefully the convertible (which I don't find attractive) gives it a bump. This is basically a pet project for Toyota

UX- too small and slow but probably makes a profit due to cheap underpinnings Agreed
NX- volume play, competitive but still rolling out with cash on the hood Tough segment. I'd like them to improve the interior and HP, but that costs money
RX- perennial favorite but competition is eating into it. Not class leading anywhere besides reliability. Reliability matters. Aside from infotainment interface and HP, of which only the former matter to the market, what does it need? For my money the RX and Nautilus are the only entrants in the class worth considering. Everything else is expensive and unreliable or ancient by comparison.
GX- not particularly competitive and very dated. The BOF differentiation is nice for those who care but they could put something that'd sell better in this slot Agreed
LX- well. Old, clumsy, and not even that good offroad due to its overhangs (you'll bash that chin everywhere). Niche isn't good enough here. I don't have high hopes for the next generation either as its walking into an extremely competitive, crowded segment. Agreed

They have a lot of work to do.




He and Motor Trend are trash. Also agreed; he seems to shamelessly embody the "autojournos who are in the career to get free ****" image

As for Lexus, if they are doing bad, who is doing good? The Germans don't directly put money on the hood but the majority of their cars are leases and their residuals are true moon shots. They base the lease residuals on what the cars sell for at retail (or higher!!!). Sedans are dying so there's nothing gained by being the latest and greatest in any of those segments. If I got to make the call I'd probably have killed off everything but the ES, GS and RC and just let them cover the whole span of sedans/coupes.

As for the crossovers they are caught between a rock and a hard place. They can't (and shouldn't) charge more. But they can only do so much within a price window. There is probably room to consolidate and focus here too. Honda has shown the way with the RDX. The NX needs to be bigger and better and I think it could at least be bigger for not much more cost. Again I think the RX has pretty much hit its target, and chasing the Germans, as it has proven to be time and time again, would be a huge mistake. They are in a very nice value niche and IMO have an offering that makes a lot more sense than an X5 or GLE at 1.5X the equivalent cost. If I could have made the call on the LS, I would have scrapped it and the new platform and made a new unibody RWD/AWD flagship crossover. That's where the market is going.

So if my count is right, consolidate down from 11 models down to 6. And just put all the $ and resources into making those great. A big change but not a lot of work. Probably less work than trying to keep 11 plates spinning.

[CTK]

Sales of the Japanese lux brands are largely relegated to tarted up FWD models based on platforms shared w/ eponymous Toyota, Nissans and Hondas.

There a reason why the Aviator is seen as credible competitor to the likes of the GLE and X5, whereas the RX, QX60 and MDX are not.

OK, I'll give you the QX60 and MDX. They are both phoned in.

But the RX is and basically always has been the top selling luxury midsize crossover in the US. So it seems pretty credible with consumers. Who's opinions are more important than theirs?

It amazes me that folks are still jumping for the "chase the Germans" trap. The last successful volley into the Germans' court was probably the G35. I can't think of anything that has succeeded since. And often times its the products that go away from what the Germans are doing that succeed the most. G35/1G CTS did not directly go at the 3. They made a value play. Lexus ES/RX, Escalade/Navigator, Chrysler 300 all have no direct analogues in the German world, and they thrive because of that. Head to head competitors- the Infiniti FX, the ATS/3G CTS, Genesis- all bombed.

So if the RX isn't considered a "credible competitor" by Euro snobs.... what does it matter?

[tejlab]

The K9 is slotted a a tweener and Kia, unlike Genesis or Lexus, doesn't provide the service amenities which can add a good bit to the cost.

As for the ES (57 krw), it's only offered in hybrid form - so have to take account for the cost of the battery.

While the K9 starts at 51 krw w/ its base engine, its top spec starts at 87 krw for the V8.

And it doesn't really matter in terms of ROI where most of the sales occur - an automaker needs a certain amount of volume to see adequate ROI.

Add to that the fact the K9 shares its platform and powertrains w/ the G90, so the costs are lowered for Kia.

Genesis and Kia are seeing a lot more ROI in sales of the G90, G80 and K9/K900 than Lexus is seeing w/ the LS and GS.

As for pseudo-premium, methinks you have mistaken the Japanese for the Koreans.

There's a reason why the Aviator is seen as credible competitor to the likes of the GLE and X5 whereas the RX, QX60 and MDX are not.

Sales of the Japanese lux brands are largely relegated to tarted up FWD models based on platforms shared w/ eponymous Toyota, Nissans and Hondas.

There a reason why the Aviator is seen as credible competitor to the likes of the GLE and X5, whereas the RX, QX60 and MDX are not.

It's quite the tweener when it's half the price of the Lexus you compared its sales to in its home market and even cheaper than the "tarted up FWD" Lexus you casually ignored.

But as much as you'd love to steer the conversation towards your undesirable poor selling pseudo-premium Korean cars, this is off topic from the thread.

[TangoRed]

How much does this really matter though? See my thoughts in bold:

It is true the 3/4 segment is down, but the Lexus is missing out on the highly profitable segment that the AMG C43, S4, and M340i sit in. The Germans rule over the RC, so while it's a nice alternative judging by sales its not nice enough. I have a personal pet peeve with the LS because it was so massively delayed only to have missed the mark when it finally hit the market. Further, I think it's a shame the RX doesn't have a truly spacious big brother than get go against the Cadillac XT6 and similar. That 3rd row they crammed in there is a sad pittance to customers.

As for Lexus, if they are doing bad, who is doing good? The Germans don't directly put money on the hood but the majority of their cars are leases and their residuals are true moon shots. They base the lease residuals on what the cars sell for at retail (or higher!!!). Sedans are dying so there's nothing gained by being the latest and greatest in any of those segments. If I got to make the call I'd probably have killed off everything but the ES, GS and RC and just let them cover the whole span of sedans/coupes.

As for the crossovers they are caught between a rock and a hard place. They can't (and shouldn't) charge more. But they can only do so much within a price window. There is probably room to consolidate and focus here too. Honda has shown the way with the RDX. The NX needs to be bigger and better and I think it could at least be bigger for not much more cost. Again I think the RX has pretty much hit its target, and chasing the Germans, as it has proven to be time and time again, would be a huge mistake. They are in a very nice value niche and IMO have an offering that makes a lot more sense than an X5 or GLE at 1.5X the equivalent cost. If I could have made the call on the LS, I would have scrapped it and the new platform and made a new unibody RWD/AWD flagship crossover. That's where the market is going.

So if my count is right, consolidate down from 11 models down to 6. And just put all the $ and resources into making those great. A big change but not a lot of work. Probably less work than trying to keep 11 plates spinning.

Yes, everyone's hitting tough headwinds but it seems as though Toyota/Lexus hasn't gotten their game together quickly enough this decade. I agree, I would've killed off several models except I would've left the SUVs, LC, and ES and that's it. They have tons of room to better position themselves in the SUV arena and its sad watching them take so long to get on it.

I don't mind them being behind on EVs for reasons that have been discussed ad nauseam in here.

[CTK]

I flat out do not believe the journo’s claim. Clickbait / sensationalism.

Even if true, I believe it would be a scandalous claim that doesn’t present the full picture. (I.e. major R&D costs attributed to a single weak year).

The purpose is to get everyone bickering over Lexus products, and it’s apparently working on the sheep, I just hope it does not result on more abandonment of their quality vehicles and a reliance on crossovers. I personally believe that the crossover fad is temporary and will eventually result in a Mean design layout centered around sportback sedans like the A7, Arteon, stinger, etc. easy to lift up, or extend the roofline to add perceived utility or the opposite for formality or sport. At the very least, the crossover overlap will shake out several models amongst most brands.

Don't confuse your hopes and dreams with realistic projections. Sportback sedans are about as niche as it gets. The Arteon came out with money on the hood

[CTK]

The new ES is really nice, a lot more car for the money than other Euro offerings like the C-class. It almost makes the LS (and definitely the GS) redundant. It's the first time in a long time Lexus has returned to its core values in a product.

Prob a moon shot but the ES is too damn big IMO. I honestly wouldn't mind if the next IS were FWD/AWD and cribbed the ES' design language. The ES is beautiful.

As for the LS, I just remembered my big gripe with it... and my opinion didn't change when I saw one in person





Sure the Lexus has more prestige gap but other than that.....

[GarageBoy]

Not surprised, California is one of the top markets for the Lexus brand (If not, its Florida and the retiree community). Asians love the brand lol (I'm Chinese, and my parents drive an RX & ES hybrids, yawn)

All the China towns in NYC are filled with lexuses - gx/rx reign - didn't even know what a ux was until this thread - singlehandedly keeping Lexus alive along with the long islanders

[TetsuoShima]

I was always bummed out that Lexus never offered a manual in their IS or RC cars. I think it honestly would've eaten away sales from manual BMW's. Lexus' are known for being built really well, being pretty damn reliable and holding their value extremely well. You toss a manual in there, tweak the suspension/power settings here and there and you quickly wonder why someone would want a BMW that will plummet in value and most likely cause you headaches down the road.

[BUJonathan]

It is true the 3/4 segment is down, but the Lexus is missing out on the highly profitable segment that the AMG C43, S4, and M340i sit in. The Germans rule over the RC, so while it's a nice alternative judging by sales its not nice enough. I have a personal pet peeve with the LS because it was so massively delayed only to have missed the mark when it finally hit the market. Further, I think it's a shame the RX doesn't have a truly spacious big brother than get go against the Cadillac XT6 and similar. That 3rd row they crammed in there is a sad pittance to customers.

Ehhh, I'm sure the German OEMs aren't losing money on those models. But they're relatively niche and I doubt they're significantly contributing to the corporate bottom line.

Toyota is the best in the business when it comes to vehicle architecture sharing, vehicle development, and manufacturing. If Lexus (allegedly) isn't making a profit... Who is?

[Dieselstation]

I would take Jonny's word with a grain of salt. I doubt Lexus is losing money. I mean.. he's not the first name I would think of when it comes to finances and profits.

[got-rice]

Asians w/ deeper pockets rather go for MB or BMW, tho.

True, those deep pocket Asians will go even further with Maserati and the like. IMO, a lot of those Euro exotics you see roamin' in the enclaves are Mainlanders with bookoo bucks, and the ones who just came from the motherland who can't drive for s**t (hence Asian stereotype).

[got-rice]

I would take Jonny's word with a grain of salt. I doubt Lexus is losing money. I mean.. he's not the first name I would think of when it comes to finances and profits.

While there might be some issue with sales here in the US, China is quickly becoming an important market for them (Lexus LM anyone?), so perhaps most of the products will be more China-centric.

[CP1]

I'm guessing the R&D plus marketing budget puts the brand in the red.

That said it's still shocking Lexus lacks a third row crossover that isn't a slap job RX+ or an old BOF SUV.

But it's not like Toyota has been spending a lot of R&D on Lexus.

One of the biggest complaints has been the slow pace in updating powertrains.

Finally got a twin-turbo V6 w/ the LS 500, but no upgrade for the V8.

The platform underpinning the LS and LC is TNGA based (TNGA-L), as is for the next IS, so even the costs there are somewhat mitigated.

They're newest products are the ES and the UX, which share a lot of components w/ their Toyota counterparts; and as stated, Toyota went the cheap way w/ the RX-L by not even bothering to extend the wheelbase.

In response to the OP, anything is possible. I do not think that Lexus is in dire straights. Many of the products are late in the cycle and/or left on the vine to die. I see new Lexuses everywhere, but my personal experience is not statistically significant.

That is a sign of Toyota not seeing new investment warranted.

And even when they do so, it's an extended life-cycle (like for the LS) as they want to squeeze every penny from the each gen's platform/powertrains.

But that leads to a vicious cycle of lower sales leading to not being worth further investment.

Interestingly Lexus is doing well in Germany.

From the article:

"Major brands had mixed results last month with Lexus, Ford and Mercedes among brands bucking the overall market's decline to post big gains while VW and Audi brand saw sales decline steeply.
Among the winners, Smart registrations rose 52 percent, Lexus gained 32 percent and Ford sales were up 28 percent.

Lexus has seen an increase in sales in Europe as of late as diesels continue to fall out of favor, but for Germany, that's mostly the hybrid UX and NX.

The Stinger outsells the entire Lexus RWD lineup (can also toss in Infiniti's) in Germany and it's not even close.

I would take Jonny's word with a grain of salt. I doubt Lexus is losing money. I mean.. he's not the first name I would think of when it comes to finances and profits.

Am a bit skeptical at the claim (hence would like to see confirmation from another source), but silence from Toyota/Lexus can also be telling.

Lexus sells plenty of the ES, RX, NX and UX - and those models don't require as much R&D investment as they share a lot of components (the most costly) w/ their Toyota counterparts, so difficult to believe that Lexus isn't making $$.

Even w/ discounts (pretty much everyone is discounting these days), they should still be making some profit.

Not up to date on the amount of discounts for Lexus, but one can get $8k+ off the price of the MDX w/o really trying.

[CP1]

OK, I'll give you the QX60 and MDX. They are both phoned in.

But the RX is and basically always has been the top selling luxury midsize crossover in the US. So it seems pretty credible with consumers. Who's opinions are more important than theirs?

Sales aren't necessarily indicative of whether a model is phoned in or not.

For 2017, the Cadillac XT5 was the 2nd best selling lux model (after the RX), but don't think too many would consider the XT5 to be close to being a class/segment leader.

And considering that it's the RX-L (and not the standard RX, which like for the XT5, are usually categorized in the compact segment) that is the 3-row midsizer, would say that Lexus phoned it in even more so than Infiniti or Acura by not even bothering to extend the wheelbase and just tacking on extra length at the rear.

It amazes me that folks are still jumping for the "chase the Germans" trap. The last successful volley into the Germans' court was probably the G35. I can't think of anything that has succeeded since. And often times its the products that go away from what the Germans are doing that succeed the most. G35/1G CTS did not directly go at the 3. They made a value play. Lexus ES/RX, Escalade/Navigator, Chrysler 300 all have no direct analogues in the German world, and they thrive because of that. Head to head competitors- the Infiniti FX, the ATS/3G CTS, Genesis- all bombed.

So if the RX isn't considered a "credible competitor" by Euro snobs.... what does it matter?

There's definitely a market for more value based FWD/tranverse entries in the lux segment, but think the criticism of Lexus is not having put forth the effort to keep their RWD sedan entries up to date and competitive.

At one time, the LS and GS (and to a lesser extent, the IS) were selling at a competitive rate (as did the 2G CTS in the entry-level/compact segment).

As for the Genesis sedan - it did alright. For much of its life-cycle placing 3rd in sales after the E Class and 5 Series.

Anyhow, the latest entrant to go head-to-head w/ MB and BMW is Lincoln w/ the Aviator - so we'll soon see how it fares.

It's quite the tweener when it's half the price of the Lexus you compared its sales to in its home market and even cheaper than the "tarted up FWD" Lexus you casually ignored.

But as much as you'd love to steer the conversation towards your undesirable poor selling pseudo-premium Korean cars, this is off topic from the thread.

Most makes are lower priced within their domestic market (see the Euros) and like I had stated, Kia isn't a hybrid and doesn't offer the service amenities - so doesn't have to incorporate that intot their pricing (when the Hyundai Genesis was rebranded the Genesis G80 - it went up in price a good bit as things like the cost of loaners, valet service, etc. had to be priced-in).

Plus, like I had stated, the K9 tops out at a much higher price than the ES.

(For argument sake, why don't we just say that the K9 is more equivalent to something like the Toyota Crown?)

But all that doesn't matter as the ES sells well enough in all its markets for Lexus to justify continuing the model for the forseeable future.

But it's a different story when it comes to IS, GS and LS.

The GS has already been pulled from the Euro market and there have been no indication of Toyota/Lexus working on a next gen model.

The next IS is in development and is TNGA-based, but there's the rumor that the one after the next gen may end up being based on Mazda's upcoming RWD platform, along w/ Mazda's straight-6.

Canceling its mid-segment (the juxtaposition of price and volume) sedan and then outsourcing the major parts of development for its entry-level/compact sedan seems to be puzzling moves for brand that wants to be seen as a major player in the lux segment that is owned by the wealthiest automaker in the world.

And getting back to the LS - sales being what they are, would be hard pressed to see Toyota continuing further investment unless they find further ways to cut or spread out costs (hence, the possibility of seeing the next Crown and LS share more components).

The K9/K900 sells well enough for Kia to continue investing in the marque - esp. as platform and powertrain development costs are shared w/ Genesis, which will also include the forthcoming RWD CUVs.

[2.0T_Convert]

It is true the 3/4 segment is down, but the Lexus is missing out on the highly profitable segment that the AMG C43, S4, and M340i sit in. The Germans rule over the RC, so while it's a nice alternative judging by sales its not nice enough. I have a personal pet peeve with the LS because it was so massively delayed only to have missed the mark when it finally hit the market. Further, I think it's a shame the RX doesn't have a truly spacious big brother than get go against the Cadillac XT6 and similar. That 3rd row they crammed in there is a sad pittance to customers.

I can't understand why we see one hi-po prototype after another and expecting big turbo charged goodness we instead get another warmed over truck V8 stuffed in an already overweight RC.

It's like the Lexus business model is as follows:
1) Come up with outlandish concepts, world domination marketing, and boat loads of hype.
2) Cut, trim, share underpinnings, and pinch pennies wherever possible.

Is Toyota the new (old) GM?

[CTK]

CP1 you keep speaking to these "complaints"

"the criticism of Lexus is not having put forth the effort to keep their RWD sedan entries up to date and competitive."

Again who is making these criticisms? ALL RWD sedans, new or old, are down in sales, so again what would Lexus gain in spending money to update them?

"the Cadillac XT5 was the 2nd best selling lux model (after the RX), but don't think too many would consider the XT5 to be close to being a class/segment leader."

So if you had to choose, would you rather a car be a profitable top seller, or a loss leading "class/segment leader"?

"One of the biggest complaints has been the slow pace in updating powertrains."

Again, from who!?!!?!? Surely not customers- BMW has the latest and greatest engines in the business, and their sedan sales have fallen like everyone elses. Giulia, G70, Stinger- all brand new, all down in sales within 2 years of their debuts. So what is the upside on having the latest and greatest platform/engine? Tangible upsides, not the respect of anonymous internet auto execs?

[CTK]

I can't understand why we see one hi-po prototype after another and expecting big turbo charged goodness we instead get another warmed over truck V8 stuffed in an already overweight RC.

Plenty of great performance cars have "warmed over truck engines". Corvettes, every AMG/M/RS/SVR car, hell even the Miata. This is a stupid criticism

[2.0T_Convert]

Plenty of great performance cars have "warmed over truck engines". Corvettes, every AMG/M/RS/SVR car, hell even the Miata. This is a stupid criticism

This just went full nut swinger. Wow. I'm sure Lexus executives have the Miata on the mind when going to sleep at night.

[CTK]

This just went full nut swinger. Wow. I'm sure Lexus executives have the Miata on the mind when going to sleep at night.

Right, because I said the Miata was an RC F competitor

My point is nearly all the RC F's competitors also use "warmed over truck engines", so why is it only a problem that the RC F does it? Your anti-Lexus bias prompts you to see any kind of objectivity around it as "nut hugging"

Not to mention it's literally the only offering in this category with a high revving naturally aspirated motor. If anything the nasal high torque turbocharged engines in its European competitors are closer to truck engines. So I am really confused by your criticism

[6cylVWguy]

Plenty of great performance cars have "warmed over truck engines". Corvettes, every AMG/M/RS/SVR car, hell even the Miata. This is a stupid criticism

While I agree with your general sentiment, what trucks have an AMG/M/RS/SVR or miata engines? You missed Ford, though I believe the coyote started as a mustang motor that was then modded for truck purposes.

[CTK]

While I agree with your general sentiment, what trucks have an AMG/M/RS/SVR or miata engines? You missed Ford, though I believe the coyote started as a mustang motor that was then modded for truck purposes.

Admittedly being loose with the definition of "truck". If the engine is shared with a crossover it's the same to me. Your M3 was prob the last car in this class with a true bespoke standalone motor.

It's a stupid criticism. Big engine in small car has been a formula for fun probably since the first big engine was available to put into a small car. Where the engine comes from is totally irrelevant if it works. Saves cost and hassle and is no less fun. Dude just scrambled for something to dump on Lexus for.

Much like the RX would be my pick in its segment, the RC F would probably be my pick in that segment. More than fast enough, reliable, good looking IMO (don't @ me), different. When Lexus inevitably kills it off there will be plenty of EURO6_COMPLIANT_TURBO6CYL_COUPEs to "choose" from.

[JackStraw79]

Interestingly Lexus is doing well in Germany.

From the article:

"Major brands had mixed results last month with Lexus, Ford and Mercedes among brands bucking the overall market's decline to post big gains while VW and Audi brand saw sales decline steeply.
Among the winners, Smart registrations rose 52 percent, Lexus gained 32 percent and Ford sales were up 28 percent.

Among brands that had a bad month Alfa Romeo's registrations dropped 45 percent, while Nissan sales fell 43 percent and Mitsubishi was down 30 percent.
VW brand saw sales decline by 17 percent, while Audi was down 11 percent.
BMW registrations fell 3 percent."

https://europe.autonews.com/sales-ma...-down-1-august

Statistics fail here since talking in percentages can be very misleading. Lexus sales growth in August 2019 was from 203 units to 268 units in the entire country. Still only 1% of Audi sales, so who cares??

[6cylVWguy]

Admittedly being loose with the definition of "truck". If the engine is shared with a crossover it's the same to me. Your M3 was prob the last car in this class with a true bespoke standalone motor.

It's a stupid criticism. Big engine in small car has been a formula for fun probably since the first big engine was available to put into a small car. Where the engine comes from is totally irrelevant if it works. Saves cost and hassle and is no less fun. Dude just scrambled for something to dump on Lexus for.

I will have to disagree with your definition. Certainly something like a Corvette that you mentioned is a fantastic example. I don;t know much about the relationship between toyota V8s, but it the V8s from the Tundra/Sequioa are in lexus cars, that's also a good example.

Having said that, you can make any engine sing with the right parts, so the fact that something could have been designed primarily for a BOF truck platform doesn't mean it can't be partially rengineered for a performance purpose. At the end of the day, all ICEs are just air pumps anyway.

[downytide]

p4c

I honestly couldn't tell that wasn't the LS until I saw the rear badge.

Damn.

[GeoffD]

Almost half of what Lexus sells is the RX. 69,000 year to date out of ~190,000 units. Add in the NX at 34,000 units and Lexus is a compact/midsize crossover brand that also sells some tarted up Avalons along with a smattering of small market share models. I would imagine the RX, NX, and ES are very profitable.