LOS ANGELES -- Lexus' boss says it will be tough to regain the U.S. luxury sales crown from German rivals, but the brand is changing advertising methods to help dealers better compete.
Starting in January, Toyota Motor Corp.'s luxury brand will shift to what the advertising community calls an "always on" model for its dealer advertising associations, said Jeff Bracken, Lexus Division general manager. In the past, the brand's advertising presence has faded for a week or two every month.
The reason? While Lexus' 110 dealer advertising associations were constantly reacting to changing market conditions with new commercials, they were hamstrung by having to place individual "dealer tags" for all 233 retailers at the ends of the spots. That time-consuming process meant delays before the commercials could be aired. Sometimes, typically early in the month, Lexus commercials did not air.
Now, Lexus will place general "See your local Lexus dealer" messages at the end of some spots. "Most people know who their local Lexus dealer is," Bracken said.
In crowded metro areas, individual dealers will still be tagged in their specific territories. On occasion, commercials promoting high-volume vehicles such as the RX crossover and IS sedan may also get specific dealer tags. But lower-volume vehicles, such as the GS sedan, might gain more airtime if produced just with, "See your local dealer" tags, Bracken said.
"The GS doesn't get the marketing resources as often as it should. We're trying to manage our resources," said Bracken, who was named general manager in March. Since joining Toyota in 1978, Bracken spent most of his career in the field before being named vice president of Toyota Division sales in 2010.
Bracken expects Lexus' advertising budget to increase in 2014, both nationally and in regional and local dealer association spending. Lexus spent $280 million in 2012, according to latest figures available from Kantar Media.
Lexus sold 244,166 vehicles in the United States last year and expects to finish this year between 260,000 and 270,000 units. With a growing industry, and the arrival of the RC coupe and NX compact crossover in 2014, Bracken predicts "bumping up against 300,000" units, a mark topped only in 2005-07.
Still, Bracken doesn't expect Lexus to catch its biggest German competitors, who are plotting further sales gains by offering lower-priced cars. Mercedes-Benz now sells the CLA sedan, which starts at less than $30,000, and BMW is lowering its entry price with the 1 series.
"I would love for Lexus to be the No. 1 luxury brand again," Bracken said, referring to the title held from 2000 through 2010.
"But as some of our competitors head below $30,000, it will be extremely difficult to reassert that lead position. We don't have any plans to head below 30. We don't feel that's where luxury vehicles should compete. That's what Toyota and Scion are for."