VANCOUVER, British Columbia -- Lexus isn't about to become Toyota's doddering Buick brand -- not if Jeff Bracken has anything to say about it.
The facts facing the Lexus Division general manager were discouraging: After dominating the luxury sales title for more than a decade, Lexus fell behind the German brands after struggling with Toyota's unintended acceleration recall crisis and a slowed flow of product due to the Japanese earthquake and tsunami.
Today, Lexus' customers are older -- averaging 60 years old -- than the German brands' customers -- who are in their 50s -- and earn less in household income.
Despite these handicaps, Lexus appears to be swinging into recovery mode, with growing sales and younger buyers, thanks to a slew of new, bolder products.
After holding the overall luxury-sales title for 11 years, Lexus surrendered its crown in 2011 and still trails its German rivals. Its first-half volume of 138,689 units lagged sales leader BMW by nearly 19,000 units, and No. 2 Mercedes-Benz by about 13,000.
But based on vehicle registrations, a better indicator of retail sales to individuals, Lexus is neck and neck with the German luxury brands so far in 2014, according to R.L Polk -- a sign that the brand isn't losing relevance.
"It's not that the brand is broken. It's how we've evolved over 25 years," Bracken said. "We'll keep nurturing those 60-year-olds, but it's going to take more than that. Our engineers are trying to get after that millennial group that we're not covering as well as the older buyer."
In trying to straddle these worlds, Lexus has created two distinct product channels:
- A luxury channel for Lexus' traditional, aging buyers, with vehicles such as the ES and LS sedans and RX crossover.
- A performance-minded channel for younger buyers, consisting of the frisky IS and GS sedans, the NX crossover and the upcoming RC coupe. On top of that are the F Sport trim levels and the high-performance F brand. Some dealerships are even splitting up their showroom displays to highlight the separation.