DETROIT - How high is high enough? How big is too big?
Those are the questions facing Lexus Division, which won the best-selling luxury brand title for the fourth straight year in 2003.
It also has accumulated more J.D. Power accolades than any other luxury brand, boasts the industry's highest sales per dealer and is among the leaders in dealer profitability.
But Denny Clements, Lexus general manager, says the brand has fallen into a predictable rhythm - and he wants to change that.
"We launch a car, then have a minor change after three years, and then a redesign two years after that," Clements said during an interview at the Detroit auto show.
"Meanwhile, the Europeans have new product news and variations coming every year, and they're always on magazine covers. Lexus needs to be like that. Lexus needs to have something always going on. It needs to have that buzz."
Clements said Lexus and parent Toyota Motor Corp. have set this stir-things-up agenda for the next few years:
Except for the launch of the RX 400h hybrid sport wagon late this year, the next 12 months will be static in terms of product. But in early 2005 the spigot will begin opening wide.
After spending the last several years bulking up in SUVs, Lexus is returning to its core strength: luxury cars. The next-generation GS 430 and GS 300 sport sedans, which will arrive in early 2005, will be followed by the replacements for the IS 300, ES 330 and LS 430, all arriving by spring 2007.
Jim Press, COO of Toyota Motor Sales U.S.A. Inc., says most Lexus growth will come from the lower end of the lineup.
While Lexus will not go any further downmarket than the IS 300 sport sedan, which starts at $29,980, he said the next generation will offer several versions when it arrives in fall 2005. The IS 300's current volume of 1,000 units a month comes from just two derivatives, a sedan and an all-but-ignored wagon.
"The key to volume growth is the IS 300," Press said at the Detroit show. "It's in a price category where having volume is OK. It's feeder stock for future Lexus purchases."
Clements promises the IS 300 replacement will do a better job competing against the BMW 3 series and its 16 variants, which sell about 10,000 units a month.