Lexus: Dropping previous ES a 'screw-up'

One of the most senior global bosses of Toyota’s luxury brand has admitted Lexus made a significant mistake by dropping right-hand drive manufacturing of the previous-generation ES sedan.

The ES was offered in Australia between 1992 and 2006 and accounted for nearly 7000 sales. However, the fifth generation was built in left-hand drive only, forcing its departure form the local market.

That decision has now been reversed and the sixth generation has this week gone on sale in Australia as part of a drive to spread the ES beyond its biggest selling North American market and China.

“We screwed up,” admitted Lexus International Executive Vice-President Mark Templin at the Australian ES media launch this week.

“It was a huge part of the volume in many parts of the world; here, Hong Kong, Singapore.

“In some cases it was 50 or 60 per cent of the business but the overall volume was relatively small because they are not huge markets compared to the US and some of the other markets.

“We made a bad decision and it hurt and we decided to right things… we see a lot more potential for the car today than we even did back then.”

Templin, who is also a managing officer of Toyota Motor Corporation, revealed examples of the new ES were currently being sampled by Lexus distributors in western Europe and some were considering adding it to the line-up there.

“There are markets all over the world considering selling this car,” he said.

Part of the attraction of the ES is that it complements the more sporting rear-wheel drive IS in the entry-level luxury category. Templin called it a “two tier strategy” for “performance luxury” (IS) and “comfort luxury” (ES).

“In the US the number one selling entry-level luxury car is a BMW 3 Series. But our combined sales of IS and ES exceed the 3 Series, so with our two-car strategy we are able to capture a broad audience.

“It has always worked for us and we want to make sure we use it on a broader scale globally.”

Lexus has also recently announced its intention to start building the 3.5-litre V6 version of the ES at Toyota’s massive Kentucky plant in the USA from 2015. The manufacturing target is about 50,000 per annum, while petrol-electric hybrid ES 300h supply will come from the Kyushu plant in Japan.

A 2.5-litre V6-powered ES 250 is also built in Kyushu and is popular in China. Templin confirmed it is also available to Lexus Australia if it wants it.

Templin said lobbying by Lexus Australia played an important role in the reintroduction of the right-hand drive ES.

“Lexus Australia put together case upon case to have right-hand drive production reinstated -- they even approached other right-hand drive markets all around the world to form a united voice,” Templin said. “To say you guys (Lexus Australia) are persistent is putting it lightly.”

Lexus Australia is forecasting around 100 sales per month of the ES, but it is hoping for better. The hybrid will be the bigger seller.

Templin says the arrival of the ES along with a production version of the LF-NX compact SUV should help drive Australian Lexus sales toward 10,000. Its all-time record of 8199 sales was achieved in 2007.

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