Lexus flexes IS muscles

LEXUS expects to double sales within four years despite a lacklustre year in the face of strong new prestige European opposition.

It hopes products like the new, entry level IS300 SportCross wagon and a wider range of new IS-based body styles and engines will play an integral part.

In the Japanese luxury car-maker's second decade of sales in Australia (the 19-dealer franchise has grown to be a $75 million investment since 1989 and now sells 180 cars per month), Lexus makes no secret of its longer term intention to expand the IS platform into a range of body styles including a coupe and convertible - and each with the potential to be four-wheel drive.

Speaking at last week's launch of the IS300, chief engineer of the Lexus IS series, Nobuaki Katayama, said the Japanese luxury car-maker's first ever compact sedan would spawn a range of different engines - perhaps even a V8 rival for the M3.

"Three years ago I came to Australia to test IS200 and again (in March, 1999) to launch the car," he said.

"I'm pleased with the way the compact Lexus has been received in the last three years. However, my intention from the beginning was that IS could be a platform for different engines." IS received the 3.0-litre straight-six from the GS300 to create the IS300 for the US market back in 1999, but when asked at the car's Australian launch about the possibility of 4.3-litre V8 power from the LS430 and US-only GS430 finding its way into the IS sedan, Mr Katayama said: "V8 is my dream".

Lexus expects IS300 to sell in numbers of 100 per month - more than both BMW's 330i or the Mercedes-Benz C320 - on top of the 125 IS200s currently sold.

Consequently, the annual IS-series sales target of 2700 is more than the entire Lexus range is expected to achieve in 2001.

"No doubt there will be a certain erosion one to another," said the divisional general manager marketing Lexus Australia, Peter McGregor.

"But there will also be a broader choice for our entry level customers and therefore a net gain in demand." Lexus executives also confirmed their intention to sell a recently released manual version of the IS300, with supply issues the only limiting factor.

But greatest enthusiasm at the IS300 launch - which precedes the October 9 launch of the SC430 and the October 16 ES300 release - was reserved for SportCross.

"The long term goal may well be to create a family of IS based vehicles. The parallel with the BMW 3 Series is obvious: some 70 per cent of BMW's volume comes from its 3 Series," Mr McGregor said.

"You can argue that some of those vehicles are by no means entry level, but the need for a strong entry platform is undeniable." Released recently in the US, the IS-based five-door hatch employs the IS300 sedan's 157kW straight six with five-speed E-shift transmission, driving through the rear wheels, but increases its fully seated luggage capacity to a big 620 litres.

Now a seven-car brand, Lexus sales have failed to maintain the momentum that saw 3088 sales in 1999, falling to 2542 in 2000.

Mr Conomos has revised his early-2001 prediction of 3500 sales for this year, and is now targeting 2500 sales after slow recent sales of IS200, GS300 and LX470.

Limited product supply won't help its cause this year - Mr Conomos said Lexus could sell up to 30 SC430s a month given unlimited supply - but future models like the RX300 off-roader expected in early 2003 will help the brand's longer term sales targets, which Mr Conomos has put at "5000 within four years".