Lexus aims to lift owner experience

With rivals lifting their efforts, the new boss of Lexus Australia has declared improving the already highly regarded customer ownership experience of his brand as one of the priorities he faces in the job.

Speaking to media at the recent GS F V8 sports sedan launch, incoming Lexus Australia Chief Executive Peter McGregor said that a tour of the Toyota luxury brand’s dealer network had revealed a concern about rivals doing a better job.

While declining to name them, McGregor’s focus was obviously on the traditional German luxury brands Mercedes-Benz, BMW and Audi.

“The dealers are saying to me the competitors are starting to catch up and we need to go to the next step,” he said.

Lexus has traditionally been a leader in customer ownership, providing service loans cars, driver assistance and access to exclusive events through its Encore Privileges program.

McGregor’s admission came despite the brand again winning the top spot for car brands in the Roy Morgan Customer Satisfaction Awards (RMCSA).

Lexus took the Car Manufacturer award for the second time in a row and the third time in the five years since the RMCSA program was established.

McGregor was shy on detail about how Lexus would further lift its performance in this area.

“There is nothing I can talk about at this stage, I have been in the chair now for six or seven weeks,” he said.

“I have managed – I think – to get to about 14 or 15 [dealerships] and physically sit face-to-face with the dealer principals in their dealerships.”

Customer experience is one of a number of priorities McGregor has outlined for his stint at the head of Lexus, which is slated to last only two years until the end of 2017. The timeline is because of the brand’s transfer with Toyota Melbourne from its current Sydney headquarters. McGregor, who has had a 38-year career in the Australian automotive industry, has elected not to make the shift. Indeed, many of Toyota's most senior managers are not prepared to move south, as we reported here last year.

McGregor nominated a continued lift in sales, building the brand and expanding the dealer network as other priorities for him over the next couple of years.

He cited the new LC 500 coupe as an example of the way the brand would be built. It debuted at the Detroit auto show in January, with the LC 500h hybrid breaking cover this week at Geneva. It is scheduled to go on-sale in Australia in 2017.

“The LC is the next step in the Lexus design language or the next iteration of that design,” said McGregor.

“I am a little biased, but it is a stunning vehicle and so faithful to the concept car.

“I think the brand does need to lift, but it needs to lift on substance, and product is substance.”

Under previous boss Sean Hanley, Lexus Australia recorded its best ever sales result in 2015, selling 8691 cars and SUVs, amidst the launch of eight new models. But unlike its German rivals, which have expanded continuously in recent years, it was the first time Lexus had topped its previous record of 8199 sales in a calendar year set back in 2007.

McGregor dismissed this as evidence Lexus wasn’t actually making much progress in a growing market.

“I don’t necessarily judge our performance on the basis of our rivals,” he said.

“I would define the numbers we sold last year over what we sold in 2014 as substantial progress. The numbers we sold in 2007 is a long time ago.”

Lexus sold 7000 vehicles in 2014, delivering it an impressive 24.2 per cent growth rate.

In terms of dealers, Lexus is planning to expand from 24 to 27 this year. But McGregor stressed those initiatives were all underpinned by Lexus’ ability to continue to deliver outstanding experience for customers.

“I think Lexus is renowned for the way we look after customers,” he said.

“We have to do all that [the other priorities] while we continue to grow that [ownership experience], because the competition isn’t getting any easier in that area. Lexus has to focus on how it maintains its leadership in customer experience,” McGregor stated.