New Lexus IS to rekindle interest

Lexus Australia says it is convinced the dramatic styling of it first new IS in eight years will revive waning interest in its mid-size sedan mainstay.

The Japanese luxury car manufacturer says a wider choice of drivetrain offerings, combined with “expansive exterior and interior styling changes”, place the third-generation model in good stead to achieve strong sales.

Lexus this week announced a starting price of $55,900 (plus on-road costs) for its crucial new IS, which goes on sale from next week.

The new Lexus IS range will be offered with a choice of three drivetrain variants, two of which share an engine and nomenclature with the outgoing model.

The IS 250 arrives with a 2.5-litre petrol V6 while the IS 350 ups the ante with a 3.5-litre petrol, also in V6 configuration. Joining the normally aspirated duo is a petrol-electric hybrid model dubbed IS 300h, the first hybrid to ever be offered in the IS line-up.

The entry-level IS 250 model, which competes in the same category as Audi A4, BMW 3 Series, and Mercedes-Benz C-Class, has faced a sales slump in recent times, and in May held only a four per cent share of the $60,000-plus medium passenger category.

The figures represent a fall of 54.9 per cent over the month prior (April), with total sales of the volume-selling Lexus model tallying just 78. The higher-output IS 350 managed 55 registrations during the same period, for a month-on-month rise of 19.6 per cent, while just three range-topping IS F models were delivered to new homes -- a monthly sales slip of 72.7 per cent.

By way of comparison, direct competitors for the IS range enjoyed an across-the-board uptick in sales. The Audi A4 achieved sales of 310 units (up 0.6 per cent), the BMW 3 Series managed 719 sales (up 27.3 per cent) and the Mercedes-Benz C-Class tallied 665 sales (up 38.0 per cent).

The German trio now accounts for a significant share of the segment in which it competes, with the A4 holding a 15.9 per cent slice of the pie, the 3 Series accounting for 36.8 per cent and the C-Class 34.1 per cent.

But at the local launch of the new IS this week, Lexus said the new model represents better value than its nearest competitors.

The manufacturer also argued that Australia’s current registration scheme and fuel prices disincentivised it from offering turbocharged four-cylinder petrol or diesel engines, adding that for customers wanting an economical option it has the IS 300h (hybrid).

“In the US we don’t offer a hybrid [in the IS range] because the US people don’t need a hybrid ... on the other hand in Europe, where there are very strict CO2 incentives, we mainly provide hybrid [models] and very few [IS] 250s; and the 350 has no chance. So it depends on the country,” explained Lexus IS Chief Engineer, Junich Furuyama.

“In Australia, there is no reason to release such specific engines ... so we provide all of these drivetrains for the Australian market,” Furuyama-san concluded.

Lexus Australia Chief Executive Sean Hanley said the brand was in a state of flux. He explained that the company was working harder than ever to be competitive, saying build quality, reputation and value for money were key marketing tools for the brand.

“Lexus is a brand right now that neither offends or excites,” he said. “It’s a safe brand. It’s a well respected brand, it’s only 22 years old, it’s well regarded. We offer amazing build quality, we offer amazing value for money, but we’ve also now got to go to the next level with sales.”

The local Lexus head offered an extensive list of statistics to back up his claim, saying the new IS is now better placed than ever before to compete with its direct rivals, especially at the volume-selling IS 250 (entry) end of the range.

The IS 250 (from $55,900) will compete directly against the Audi A4 1.8 (from $55,500), BMW 320i (from $58,600) and Mercedes C 200 (from $59,900).

Spec-adjusted, Lexus says the IS 250 represents an 18 per cent benefit when shopped against the A4, increasing to 23 per cent when viewed against the 3 Series and 29 per cent compared to the C-Class.

Lexus continued to highlight the point across the remainder of its model range.

The tricky hybrid versus diesel equation sees Lexus place its new IS 300h (from $58,900) in competition with the Audi A4 2.0 TDI (from $57,900), BMW 320d (from $60,900) and Mercedes-Benz C 200 CDI (from $61,400).

The differences in equipment and value in this instance, Lexus says, equate to an advantage of 21 per cent, 25 per cent and 29 per cent respectively in favour of the Lexus customer.

Finally, Lexus says its top-spec IS 350 (from $65,500) will compete directly against the Audi A4 2.0 TFSI (from $64,500), BMW 328i (from $65,900) and Mercedes-Benz C 250 (from $67,900).

The differences here, according to Lexus, equate to an 18 per cent increase in value for Lexus customers also shopping an Audi, 24 per cent for those considering a BMW and 26 per cent for those looking at a Mercedes-Benz.

The previous generation (XE20) IS 250 sold more than 20,000 units during its tenure here, with 10,000 of those having been sold within 32 months of the model’s launch.

The more powerful IS 350, which did not go on sale here until 2010, has achieved in excess of 2000 sales, while slightly fewer than 1400 IS 250C (convertible) models have been sold since its launch in early 2009.

Although its successor is yet to appear, the fire-breathing IS F sports sedan -- a model whose allocation was capped at 10 units per month -- has found just over 500 homes since its debut here in 2008.

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