Features and Editorials
Throwdown: BMW Exec Takes Aim at Lexus
By Mike Cervantes
Mar 9, 2005, 22:38

Courtesy: BMW NA
The recent introduction of the new Lexus IS apparently has people at BMW headquarters taking notice. It’s no secret that Toyota is planning a major push of the Lexus brand worldwide, and the new IS will play a huge part in that. So when the company went to Geneva to make the vehicle’s world debut, it appears they’ve achieved exactly what they intended to do: ruffle a few feathers.


Case in point: Stefan Krause, BMW board member in charge of finance. He told Automotive News Europe in their March 7th edition that, “Toyota has lots of cash, but we are still waiting to welcome them into the premier league.”


Ouch. In the automotive world filled with tightly-spun, agonizingly bland press releases this is the equivalent of saying, “Yeah, you’re rich, but you’re dumb and ugly and nobody likes you.” Despite the fact that Toyota has nurtured Lexus into a brand that is kicking BMW’s and Mercedes-Benz’s collective asses up and down the US luxury market after less than two decades of existence.


Krause goes on to say that only those two aforementioned German makes are the world’s true global premium brands. There, at least, he does have a point – Lexus is not anywhere as big on the international stage as it is in America, yet. But I think companies like Audi and Jaguar might dispute his claims that there are only two premium beands.


Lexus may not be big outside of the United States, but I wouldn’t be surprised to see that change – rapidly. When Toyota sets its mind on accomplishing something, in this case making Lexus as big worldwide as it is here, they tend to achieve their goals. Just ask GM, which some industry analysts expect will fall to the No. 2 spot behind Toyota on the list of global automakers within the next decade.


Courtesy: Lexus Europe
It doesn’t take a rocket scientist, or automotive engineer, to figure out that Toyota knows how big the payoff could be if they duplicate Lexus’ American success on a worldwide level. And as Krause mentioned, Toyota’s sitting on a pile of cash large enough to make such an undertaking possible. By some reports, Toyota’s got enough cash to buy just about any car company (GM included) if they feel like it. As one of the world’s largest automakers, Toyota already has the infrastructure in place to make mass-distribution of Lexus worldwide easily possible. A little extra investment in driving dynamics here and more expressive styling there, and it wouldn’t take much to grab a good piece of BMW’s and Mercedes’ worldwide luxury pie.


Don’t be fooled for a second into thinking that BMW doesn’t know this. They’ve already been forced once into changing how they operate when Lexus burst onto the scene. They’ll adjust again. What’s harder to understand is why BMW is so concerned. Lexus, Infiniti, and Acura all have racked up strong sales numbers in America – but so have BMW and Mercedes. At least in the United States, the pie has been big enough to feed all of these cash cows.


Krause did give Lexus a few pointers on what he thinks they’ll need to do before they can become a true premium brand by his standards. He says Lexus needs designs that “appeal worldwide” – funny, considering Chris Bangle has been bashing every BMW he touches with the ugly bat. Also needed are a consistent global brand image and a factory in Europe that produces made-to-order vehicles.


Rest assured, Mr. Krause. If Lexus needs all of that, Toyota will give it to them – and much more. You’d just better get to work on throwing them that welcome-to-the-premier-league party.

© Copyright 2006 by