CHIBA, Japan -- Rival premium carmakers insist Toyota Motor Corp.'s launch of its Lexus brand in Japan hands them more of an opportunity than a threat in one of the world's most lucrative markets for high-end automobiles.
The advent of Lexus at the end of August may well boost overall sales in the premium segment, which has been largely stagnant for years, executives in Tokyo for the auto show said this week.
"We welcome the change," said Peter van Binsbergen, senior marketing director at BMW Japan. "We view it as an opportunity for growth."
Just as the arrival of the Mercedes-Benz C-class model line in the mid-1980s could not dent sales of the crucial BMW 3-series family, Lexus won't hurt BMW in Japan, BMW Chief Executive Helmut Panke told reporters.
"We are quite convinced that a number (of customers) after looking at Lexus in showrooms will decide for BMW because we are basically...the more dynamic of the premium brands in there," he boasted.
Launched 16 years ago in the United States, Lexus clawed its way to the top in the high end of the world's biggest car market thanks to its consistent quality, electronic add-ons and competitive pricing. But it has struggled to repeat that success elsewhere.
"You can't copy and paste the success (Lexus) has had in the United States 16 years later. Different markets require different solutions," said Walter Hanek, who heads Japan operations for Volkswagen's premium division Audi.
Despite its U.S. success, Lexus did little to crimp sales of Mercedes and BMW cars there, Hanek said, instead attracting customers from "weaker" brands such as the home-grown Cadillac, Lincoln and Mercury as well as European names like Saab, Volvo and Audi.
U.S. sales at Mercedes-Benz and BMW have both grown to about 200,000 units from around 80,000 when Lexus joined the fray, Hanek said.
MAKING A GLOBAL BRAND
Lexus sold 1,407 units in Japan last month as Toyota began marketing models it had previously sold at home with Toyota badges.
"It's now time to turn (Lexus) into a globally accepted premium brand," Toyota President Katsuaki Watanabe said in July when he unveiled the GS, SC and IS cars to be sold through an initial 143 dealerships in Japan.
By contrast, Mercedes-Benz boosted sales in Japan by 6.9 percent last month to 5,807 units, BMW brand car sales advanced 6.5 percent to 4,811 vehicles and Audi sales jumped 20.7 percent to 1,699 units.
The allure of European brands is their decades of car-making tradition, something Lexus cannot yet match, the foreigners say.
But Jon Lancaster, president of a successful U.S. Lexus dealership in Madison, Wisconsin, said Lexus would battle the Europeans for individual customers.
While the product was certainly important, "I still think the dealership level makes a tremendous difference", he said.
Toyota, which is poised to surpass General Motors as the world's biggest car maker, has the deep pockets and patience to make sure Lexus prospers.
"When your mother is called Toyota, I don't think the daughter will be left out in the rain for too long," Audi's Hanek said. "I absolutely think Lexus will be successful."
Michael Raab, analyst at Sal. Oppenheim in Frankfurt, said Lexus had a good chance to win share from U.S. and European brands on its home turf, but added: "The Japanese might think about luxury brands like the typical German: people always felt that when you bought a Lexus or imported an Infiniti or an Acura you wanted to be a big shot but couldn't really afford it."
As early as next year, Toyota plans to topple Mercedes-Benz and BMW from atop Japan's premium sedan market. Sales in the segment totaled 58,400 vehicles in 2004, Toyota reckons, with Mercedes and BMW accounting for 44,400 units.
Toyota envisions 2006 Lexus sales of 50,000 to 60,000 units including the flagship LS sedan due in the second half of next year. Lexus plans in the long term to raise annual sales to 100,000 units -- a third of Japan's high-end market.
The Lexus GS 350 sells for around 5.2 million yen ($45,000) versus 8 million for a similarly powered Mercedes E class and more than 7 million for the 3.0-liter BMW 5-series model.