Reaching New Heights

Lexus reminisces about the past and reenergizes for the future at its National Dealer Meeting

October 08, 2019
Pivot Point -- Lexus General Manager Dave Christ acknowledges the invaluable contributions of Lexus' founders while also charting the course ahead in a changing luxury marketplace.

It’s been 30 years since Lexus burst onto the automotive scene. So, who can blame its leaders and dealers for indulging in a bit of reminiscing at their annual meeting — held last week in Washington, D.C.?
For instance, Executive Vice President of Sales Bob Carter — who was with Lexus at the very beginning — took time to share some of his experiences signing up many of the luxury brand’s first dealers. And Dave Christ, group vice president and general manager of Lexus, welcomed back several of his predecessors — such as Dave Illingworth, Don Esmond and Dick Chitty — who helped establish a new standard for exceptional customer service.
“Having the chance to work with all of you has seriously been the highlight of my auto career,” said Carter. “On behalf of all of us at Lexus, I want to thank you for making this brand what it is today.”
Indeed, Lexus has reached new heights the last few years. Yet, Christ knows if the brand spends too much time looking in the rearview mirror, others will pass it by.
“We want to celebrate what we’ve accomplished together,” said Christ. “But, just as importantly, we want to celebrate where we’re going.”

The Personal Touch -- Bob Carter, executive vice president of sales, shares his experiences collaborating with Lexus' formative leaders (such as Don Esmond pictured behind) and helping the early waves of Lexus dealers get up and running.

Expanding the Brand’s Appeal
Much of the second half of that equation has to do with future vehicles that were revealed for the dealers’ eyes only. But what can be shared is that the target market for those products is expanding beyond Lexus’ traditional base of Baby Boomers to Millennials, many of whom are beginning to aspire to buying and driving luxury automobiles.
Christ said appealing to these new customers, currently 23-38 years old, will be the key to maintaining the brand’s current momentum. Sales this year have held steady and could end the year at just under 300,000 units, despite a softening overall market.
“ES alone is up 10 percent,” said Christ. “Who said passenger cars are dead? If they are, we didn't get the memo. We’ve sold 12,000 of the new UX with little to no cannibalization of the NX. Together, NX and UX owns 23 percent of the important and growing small luxury SUV segment. RX continues its dominance of the mid-luxury SUV market with a 19 percent share. And hybrids. Wow, we are rocking with hybrids!”
That’s a snapshot of where Lexus is in 2019. But what about in 2030? Christ revealed that the brand recently commissioned a study to answer that question. It zeroed in on four core factors:
  • Time shift — Many Millennials waited much longer to get married than Baby Boomers. So just as they can begin to afford luxury, they are also just starting their families. So instead of sedans or coupes, they’ll have their eye on three-row SUVs that can carry their kids and all the stuff that comes with them.
  • Tech shift — This generation is extremely receptive to new technology. That could mean hybrid and electric vehicles as well as sales and service processes that supports them. Increased transparency is a must.
  • Gender shift — The role of women in the marketplace will continue to grow. They already influence 87 percent of all purchases. And they are starting new businesses at twice the rate of men.
  • Priority shift — The experience of acquiring a luxury product will matter nearly as much as the experience of owning it. Lexus has owned this metric. But Christ noted that its competitors have begun to close the gap.
A Birthday Toast -- In celebration of its 30th anniversary, Lexus recreated its iconic television ad that used a pyramid of champagne glasses to demonstrate the LS 400's breakthrough engineering refinement.

Easy, Effective and Emotional
“Research shows Gen Y loyalty is achieved by making every guest touchpoint easy, effective and emotional — the three Es, if you will,” said Christ, calling out the Lexus Plus digital-mediated sales process and its Elevate Leadership Program for dealership personnel as two specific means to that end.
In other words, Lexus’ future could well be guided by the same underlying covenant that shaped its past: “Lexus will treat each customer as we would a guest in our home.”
“I will end where I began,” said Christ. "We are amazing together. Our partnership is unmatched in the industry and, I would offer, unmatched in any industry. If you think the last 30 years were great, I am happy to say: We are just getting warmed up.”

By Dan Miller

Editor's note: If you want to get a glimpse of what happened at the Lexus National Dealer Meeting, watch the video below.  

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