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Lexus goes for major LS sales revival

Going up: Lexus already has some customer orders in the bag for its new LS sedan.

All-new Lexus LS shooting for 120 sales this year, up from just three in 2017

13 Apr 2018

LEXUS Australia will be allocated 120 new fifth-generation LS limousines this year unless it can show head office that demand in this market is outstripping supply.

That allocation represents roughly half of the annual record number of LS sales in Australia – 257 in 2007 – that was achieved just before the global financial crisis severely dented the luxury car market here and pretty much everywhere else.

In recent years, sales of LS have bumped along in the 60-to-30 range each year, but sales last year plummeted to just three units, the lowest since the flagship sedan was launched in 1989, as customers kept their powder dry in anticipation of the all-new model that has now been released in Australia.

Lexus Australia chief executive Scott Thompson said Lexus might be accused of “too good a job” of promoting the latest model, having started with a concept car at the Tokyo motor show in 2015 and followed up by revealing the production version at the Detroit motor show in January last year – a year out from the sales launch.

“I think a lot of buyers in that market basically were holding off until they saw the new car,” he said. “This was hotly anticipated in terms of the next generation, so I think we did perhaps too good a job of promoting it and showing it.”

The company also showed an example to guests at the Melbourne Cup last year, and has now followed up with a series of customer preview nights.

Mr Thompson said those customer events had resulted in a number of orders for the car, which starts at $190,500 for the twin-turbo V6 LS500 and hybrid L500h in F Sport guise and tops out at $195,500 for the Sports Luxury with either powertrain.

He declined to say how many orders were in the bank, but said they were not all current LS owners nor all Lexus owners.

“It has been quite successful so far, but I can’t give you a number,” he said.

“We have got a good mix of existing owners and some new younger buyers coming into the market for the new LS, which is very exciting for us.

“Some are existing Lexus buyers moving up.”

The average current Australian Lexus LS owner is 68 – higher than the average Lexus owner age of 52 – hence Mr Thompson’s excitement at a new breed of buyer showing interest.

Newer Lexus models such as the NX medium SUV and RC sports coupe have been drawing younger buyers into the fold, and the hope is that they will gravitate up through the range to flagship models over the years.

Mr Thompson said that while the initial allocation of LS cars was 120 over the next eight-to-nine months, “we will be doing our very best to get as many as we can”.

“We negotiate on a monthly basis now, and so if we can sell a few more than that, that would be fantastic,” he said.

Mr Thompson predicts that the split between the new turbo V6 powertain and petrol-electric hybrid would be 60-30, in line with overall Lexus sales.

However, he said that when potential customers got to drive the car, he would not be surprised to see a higher ratio of hybrids.

“I think you will agree that the performance of the hybrid is probably the most refined we have ever experienced in hybrid, so it is going to be a real interesting decision to make concerning buyers.”

Mr Thompson said one of the reasons for the customer previews was to get feedback on potential sales of these powertrains, trims levels and colours.

“They are all very positive about it, but we have some challenges in terms of trim colours because the they have not got access to all the different trim combinations and colours now,” he said.

“For an expensive car, you want to basically see the configuration. It is very challenging.”

The LS comes in four basic trim packages, with another four extra-cost packages at a tick under $10,000.

“When you are at that end of the market, you have got to be sure you do get your line-up right,” he said “You don’t want to be carrying stock of high-end cars like that.”

Unlike previous LS models, the latest version is going into showrooms without a V8 powertrain in a nod to efforts to reduce fuel consumption.

Mr Thompson said that in the United States, the dealers queried the move, believing it would hurt potential sales.

“The dealers’ biggest criticism was ‘where’s the V8’. As soon as they drove the car, that problem went away,” he said.

At 310kW, the all-new twin-turbo 3.5-litre V6 tied to a class-first 10-speed automatic transmission is faster to 100km/h than the previous 4.6-litre V8, while the hybrid – also powered by a V6 – is also swifter than the previous hybrid that used the V8 as its primary source of power.

TV advertising for the new LS will be drawn from the US. Mr Thompson said the TV commercial was a brand ad, not an automotive ad, focusing on the Japanese heritage of Lexus.

Among the images is one of origami-style folding of leather by a Japanese craftsman for door trims.

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