Lexus Offers Luxury in and Out of the Car


Toyota Motor Corp.’s (NYSE:TM) Lexus division is all about luxury, and as it works to combat the other major competitors in its home market, the car maker is ready to bring out the big guns. That includes opening its own luxury store, called Intersect by Lexus, that offers customers cafe goods, modern “Tokyo-themed foods”, and access to a garage, a shop, and a library lounge.

According to a report via Bloomberg, the store will be opened in Tokyo’s Aoyama district on August 30 next to boutiques like Prada SpA and LVMH Moet Hennessy Louis Vuitton SA. Its purposeful placement in this neighborhood is to help boost Lexus’s luxury brand image worldwide, and increase its global presence.

Similar stores will eventually open in New York and Dubai, but for now, Lexus is focusing on Japan because that is the region where the Japanese carmaker most significantly trails its competitors, Bayerische Motoren Werke AG and Daimler AG’s Mercedes-Benz.

While Mercedes sold 27,828 vehicles in Japan through the end of July this year, Lexus sold a smaller 27,074 units. And though this difference might seem minimal, it is not a pattern that Lexus would like to follow in Japan, especially after outperforming BMW and Mercedes in the U.S. this year.

Lexus has seen major success in the U.S., its biggest market, since its debut in 1999, but the Toyota City, Japan-based company has watched that success slide not only in the past two years in the U.S., and also in its global markets, and that’s why, now, the luxury division is ready to curb its losses for good.

While Lexus has long beat out BMW and Mercedes-Benz in the U.S. luxury market, in recent years, its sales have recently paled in comparison to the two. Fortunately for the Japanese company though, this year, Bloomberg points out that Toyota’s Lexus sales have grown 12 percent to 141, 446 units, marking a comeback as it once again surpasses BMW and Mercedes for the first time in two years. Now, the luxury brand is working to sustain that progress.

And as it regroups in the U.S. where about half of its sales come, Lexus is also bolstering its Japan efforts with this new luxury store opening. The founder of Nakanishi Research Institute, Takaki Nakanishi, understands that the store won’t be a simple easy fix to all of Lexus’s problems. However, he also recognizes it can’t hurt, explaining that, “You can’t expect to gain sales from simply opening a cafe, but it’s definitely better than not having one.”

Nakanishi may be right — especially considering that the majority of the luxury brands seem to be pulling out all the stops as of late. From upping the look and feel of their luxury dealerships to retraining dealers to ensure they know how to best interact with luxury shoppers, carmakers understand that the pockets of luxury car consumers are now widening as certain major economies start to recover. Lexus will now try to take advantage of that thicker wallet with its new luxury store and redesigned Lexus vehicles.

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