The Near Death And Revival Of Lexus

Toyota had high expectations for Lexus, and could you blame them? It took them six years and $1,000,000,000 to bring the LS400 luxury sedan to market. I’ve actually covered the development of this car in extensive detail in a video that you can watch here. If you’d rather read about it, then I’ll link an article in the description. The super saloon wouldn’t be touching down in the United States by itself. Launching a new marque with just a single model would have looked a bit strange, so Lexus developed a companion model that would soak up buyers at a lower price point.

The ES250 uses a similar naming convention as its stablemate. ES is short for Executive Sedan while 250 represents its 2.5L V6 engine. This was no LS, to put it lightly. While that car was designed from the ground up to decimate the competition in every conceivable metric, the ES was a rush job. They took the Japan-exclusive Toyota Vista hardtop, gave it a few upscale touches, and called it a day.

No one could have predicted their meteroric rise. Their unraveling was equally unexpected. It started inconspicuisly enough. The Lexus flagship received an update in September of ‘92 that pushed the price to $46,660. It was nudged out of its original price point and now had to make a very different proposition to consumers. Lexus needed something that would slot into that $35,000 vacancy.

This came in the form of the GS300. The Italdesign-styled sports saloon was less of a “mini LS” and more of a focused sports sedan in the same vein as the BMW 5-Series. It was lauded for its driving dynamis and tidy exterior, but there was one glaring issue that spoiled its introduction and hamstrung its success in the market: its price. The $37,500 base price was actually $3,000 higher than a comparable BMW 525i. It didn’t matter how good it was. Being more expensive than the quintessential mid-size sports sedan was a death sentence. It became an also-ran as soon as it was released in 1993. Sales peaked at a little over 19,000 in 1993, tumbled to 14,000 in 1994, and then to about half of that by ‘95. Other Lexus models were losing the numbers game as well. By 1994, the LS was selling for more than $50,000, the SC and GS for more than $40,000, and the ES for well over $30,000.

The competition only exacerbated the issue with redesigned cars and reduced prices. German automakers were gunning for Lexus, but a new segment of vehicles were also gaining favor with car buyers. Mainstream automakers like Nissan, Mazda, and Mitsubishi were creating luxurious full-size luxury sedans that appealed to cash-consious consumers.

00:00 INTRO
4:04: THE PERFECT RECALL
8:57 EARLY SUCCESS
12:16 DECLINE
20:41 RESURGENCE

SOURCES: www.barchetta.co/lexus-ii-sources

LEXUS SC400 DEVELOPMENT/CALTY DESIGN RESEARCH ARTICLE: https://www.barchetta.co/articles/calty-design-research

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