Lexus says no to price war
Japanese luxury brand Lexus says chasing volume via lower prices is not sustainableThe head of Lexus Australia says he refuses to chase volume at the lower end of the market as its competitors have, saying it is not sustainable for a luxury brand and that Lexus will instead explore new luxury segments to grow market share.
Speaking at the CT200h launch in Sydney this week, Lexus Australia chief executive Sean Hanley said that the company would not consider price-matching its competitors.
Audi, BMW and Mercedes-Benz sell the A3, 1 Series and A-Class small cars at an identical price, $35,600.
"That’s not a sustainable position for luxury. Because luxury still remains about recognition, quality, performance and great customer service. Where it’s different, it’s a different experience. It’s a reward, a recognition experience," said Henley.
The entry level Lexus, the just-updated CT200h, continues as before at $39,990, priced more than $4000 higher than its German rivals.
"It gets back to carefully managing the brand. I understand right now that luxury can enter, transactionally, sub-$35,000 -- sometimes even sub-$30,000. In truth, if you are about being number one in the luxury market, then perhaps that’s the space you’ll go to. That’s not what Lexus is about. As a brand, Lexus wants to grow, but in a manner that is sustainable," he added.
The CT200h is trailing its competitors in the first quarter of sales this year, with Mercedes-Benz registering 1301 new A-Class vehicles, Audi 1033 A3s and BMW 613 of the 1 Series.
Lexus moved a total of 264 CT200h models.
Citing the possible inclusion of a compact SUV to boost the local Lexus range, (the NX, the production version of which is due to be unveiled at Beijing later this month), Hanley said, "This is certainly a space we would like to enter into; the small compact SUV is the fastest growing segment of the luxury market… frankly, to grow the brand further, we need to enter these markets.
"But do we need to enter them at the cheapest price? Absolutely not. Not to achieve what Lexus wants to achieve sustainably."
Lexus has already announced its new premium sports coupe, the RC Coupe, is destined to arrive locally later in 2014.
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