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Tuesday, 29 October, 2002, 09:10 GMT
The invisible luxury car
Lexus car from the movie Minority Report
Minority Report: A car unlike the rest of the range

One of the least spectacular marques on display at the motor show in Birmingham is also the one that tends to receive the most quiet praise, both by industry watchers and by its existing customers.

Lexus
Lexus: Fading into the background?
But although the maker of the brand is deliberately discreet, it is far from happy about being ignored.

So in a bid to raise its profile, a fantasy eye-catching model that looks nothing like its real-life cars is on display at its stand.

The futuristic Lexus which Tom Cruise drove in the movie Minority Report has indeed attracted plenty of media coverage.

But it seems the move has done little to attract attention to the car maker's other models.

"We are less showy than some of our competitors," said Lexus Europe boss Stuart McCullough in an interview with BBC News Online.

" Partly, that's by accident, partly that's by design."

Lagging behind the US

Lexus has had a hard time making it in the UK, despite its overwhelming popularity in the US, where its image as a foreign luxury model has become well established since its initial launch in 1989.

Lexus Europe director Stuart McCullough
Mr McCullough is there to tell us that Lexus exists

Lexus sells around 250,000 cars a year in the US and is now the market leader in the premium car segment where it is pitched against German car makers Mercedes Benz, BMW and Audi, as well as Cadillac, Lincoln and Jaguar, according to Mr McCullough

Compare that with sales of just a few thousand cars a year in the UK, and it becomes clear that the market leader position is well out of reach.

And yet, Mr McCullough insists that Lexus is doing well in the UK, at least when compared with its performance in the rest of Europe.

"We sell about 11,500 units a year in the UK. It's half the European volume just in the UK alone," he said.

"We've enjoyed something like 400% growth in the space of four years in the UK.

"Around the rest of Europe, the numbers are very small indeed."

Conquering Europe

During his four years in charge of Lexus UK, Mr McCullough has built the brand's UK presence virtually from scratch.

Lexus driver
Lexus drivers: There will soon be more of them

Now, he is ready to spearhead Lexus' next charge.

"We now find ourselves having secured our position in America and looking to move into Europe to a greater extent than we have done.

"The challenge now is to create a distribution platform from which to grow in Europe," Mr McCullough said.

Diverse markets

This will not be easy, Mr McCullough acknowledged, highlighting the German market as particularly tough to penetrate.

"About 850,000 prestige cars are sold each year in Germany, only 10% of them are imported," Mr McCullough said.

The German mindset is very much pro German products

Stuart McCullough, Lexus Europe

"So it's' very tempting to look at the German market and say there are 850,000 opportunities to sell a car, when in reality there are 85,000.

"The German mindset is very much pro German products, and the German customer has to justify his purchase of any other kind of product in the way that as a Brit you would have had to do in the 1970s."

The Italian market is fairly similar in its loyalty towards national car brands, though slightly more cosmopolitan than Germany.

In France, the premium market is very small given the size of its economy, Mr McCullough said.

"The car occupies a different place in their attitude to life," he observed.

"So the challenge in Europe... is to be appealing in many diverse markets and environments."

Happy customers

The Germans' loyalty to their own brands may appear surprising, especially given the high marks Lexus drivers there award their cars in customer satisfaction surveys.

Lexus baseball cap
Discreet branding is key to the Lexus philosophy

In a recent survey, by JD Power, of German drivers' satisfaction with the cars they drive, the Lexus IS200 received the highest score of all the 132 cars included.

Lexus and its parent Toyota were ranked the highest in six out of seven car segments in the survey.

Similar satisfaction levels can be seen in the UK, where earlier this year Lexus beat Toyota to the top spot in JD Power's 2002 UK Car Customer Satisfaction Study, and where Lexus headed BBC Top Gear's motoring survey in terms of quality, reliability and customer care.

"Some of that understanding of the brand has fed into the UK a lot faster than it's fed into other European markets," said Mr McCullough.


Cars and strategies

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