Lexus – premium brand or just an expensive Toyota? –

I was at the traffic lights the other day when something dawned on me. I was in a two-seat Toyota with an engine behind my back. Obscuring my entire forward view was a Toyota Apartment a.k.a. Alphard Executive Lounge. Next to the luxury MPV was a Toyota Hilux. I turned to the left and saw a Camry, the nice new one in pearl white.

All of us know it, but that traffic light moment reminded me that Toyota makes a lot of things, from the most desirable hot hatch in town to buses, and everything in between. For every premium German model, there’s a Japanese equivalent from Lexus. If you were Japanese, you would have known all along that Toyota also makes luxury saloons, but this was an alien concept for the rest of the world back in the 90s.

Toyota made trusty family sedans, with millions opting for safe and well-made saloons like the Corolla and Camry. Inexpensive and reliable to a fault, they’ve become household names. But if you’ve done well and wanted to move up the car ladder, you’d be heading to a German showroom. Even if you wanted to stick with Toyota, they’d have nothing to offer you other than a V6 Camry.

Like Seiko in the 1960s, Toyota wasn’t content making tonnes of inexpensive cars, it wanted to play with the best in the business and beat them at their game. For the Japanese watchmaker, it was the Swiss brands in the chronometer competitions; for Toyota it was the German premium stalwarts. You know who they are.

Boosted by Japan’s bubble economy in the late 80s and early 90s, the country’s car giants set out to conquer the world. On the performance front, this era created some of the modern classics that are legends today (Honda NSX was born in 1990, Mazda RX-7 FD in 1991, A80 Toyota Supra in 1993, R32 Nissan Skyline GT-R in 1989), and on the luxury side, brands like Acura, Infiniti and Lexus were born. The money was there, the confidence was high.

Toyota didn’t dip its toes into premium waters with Lexus, it dived straight into the deep end. By that we mean the flagship limo class with the LS 400 in 1989. Like its compatriots, Toyota’s premium brand targeted the US market and it didn’t take Lexus very long to top overall premium charts there, just a decade.

Lexus’ 2019 US sales of nearly 300k was more than Acura and Infiniti combined, and just below Mercedes

Today, Lexus is mixing it up with Mercedes-Benz and BMW in North America. Its 2019 US sales of 298,114 units is just behind that of the three-pointed star (316,094 units, excluding commercial vans) and the propeller badge (324,826 units), and is way ahead of Acura (158,934) and Infiniti (117,708).

With the American mission achieved, the next step was to go global, and the big shift came in 2005, when Lexus became a separate entity from its giant parent (it was a division since day one), and was finally launched in Japan – that’s right, before 2005, Lexus cars were not sold in the country where they were made. It was from here that Lexus really went its own way in terms of products and design. Lexus officially arrived in Malaysia in 2006.

Being a right-hand-drive market with a penchant for JDM cars, we’re familiar with the early Lexus cars that were sold in Japan as Toyotas. The Toyota Harrier (Lexus RX) is the most famous of them all, while car fans would know the Altezza (Lexus IS), Aristo (Lexus GS) and Celsior (Lexus LS) sedans. This association with Toyota models is the reason why L-badged cars were described as “just an expensive Toyota” (or something to that end) by some.

The first two gens of the Lexus RX-Toyota Harrier were twins, but today’s SUVs are completely different cars

While JDM Toyotas are held in high regard by the market, that perception is not something positive for a premium brand seeking its own identity. That view is no longer so prevalent today, simply because Lexus and Toyota have not been sharing models for some time now. Also, it’s pretty obvious that Lexus design significantly differs from Toyota – the premium brand has also created for itself one of most recognisable signature looks in the market – the spindle grille.

Speaking of the Toyota Harrier/Lexus RX, both brands parted ways after the second-gen XU30 – today’s Lexus RX is the second standalone RX after the third-gen AL10, and has no relations to the Toyota Harrier, which entered into a new generation this year (called Venza in US). Similarly, there’s have been no Toyota equivalent of the Lexus IS since the second-gen XE20. Lexus’ latest and smallest SUV, the UX, is similarly unique to the brand.

Lexus design isn’t just differentiated from Toyota, but of late, its premium peers from Germany. Compared to the equivalent Mercedes-Benz, BMW or Audi, Lexus models are typically sharper and/or more sculptured, a contrast to the safer approach taken by the Europeans.

The bold approach also extends to cabin design and choice of materials. Examples of the latter range from the UX 200’s Japanese washi paper-inspired dash top surface to the LS’ Kiriko cut glass door trim and origami hand-folded pleats on the door cards. It feels almost wrong to merely call the latter door cards. The perceived quality and attention to detail of Lexus interiors vis-à-vis other premium brands is easier seen and felt than explained.

In terms of design, Lexus has been going on its own very Japanese path – sure, doing that means you won’t please everyone, but distinct identity and boldness has to be celebrated. Have you wondered why BMW is doing what they have been doing to those kidney grilles?

The differences go beyond the top hat. Lexus has its own versions of platforms shared with Toyota, with specific tuning and hardware to suit premium applications. This is where detractors might harp on, but platform sharing has been part of the car industry for some time now, and is here to stay. Economies of scale is a desirable thing, and the Volkswagen Group – which has Audi and Porsche in its stable of brands – are masters of the sharing game.

The same principles apply to powertrains. It’s not cheap to come up with something new, so when you do it, maximise its use – that’s the idea behind it. We have no problems with that, provided that the final product is par for the course the car is competing in. A case in point is the Lexus ES – while its FWD underpinnings is also found in the XV70 Camry, the Lexus is larger, more luxurious and looks like a junior LS. Nice as the Camry is, the Lexus feels more special.

Most Lexus models are engineered to be true premium cars from the ground up, but there’s one (rather big) elephant in the room, and it’s the Lexus LM. Now open for booking in Malaysia, the LM is obviously based on the Toyota Alphard, and is aimed at China and other Asian markets. The luxury MPV is a thing in our side of the pond and not elsewhere, which is why the LM is not a global product.

The LM may be based on a Toyota, but to top the Alphard Royal Lounge (a four-seater, a step up from the already plush Executive Lounge) is quite a feat. Lexus saw a gap in the market and went for it – time will tell if the bet is successful. We’re not quite sure what to make of it, but the LM is an anomaly, a regional curio of a model.

The premium car experience is more than just the car itself, and among premium brands, it’s perhaps Lexus that understands this the best. From the way the showrooms look and feel, to the attention from personnel, Lexus has been known to provide a feel good factor that’s second to none in the premium segment. Just ask their customers, especially those who have also owned a Continental peer.

In terms of product and branding, it’s obvious why Lexus wants to distance itself from its mass market parent, but if you ask me, there’s one Toyota element they should wear with pride – reliability. IMHO, that’s a strong and unique selling point for the brand, in its segment, against its main rivals.

Malaysia is a unique market where our tax structure favours locally-assembled cars, and both Mercedes-Benz and BMW have used CKD + EEV + hybrid incentives to their advantage. With a full CBU Japan range, Lexus often competes with a price disadvantage (save for that hybrid tax-free window in 2011-2013 where they sold loads of CT 200h hatchbacks), but as discussed above, Lexus brings something good and unique to the premium table.

So, what do you think of Lexus as a premium brand next to the Germans? It’s a good thing for me, but do you see its Japanese/Toyota roots as a positive point or a detraction?

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