Lexus has long been a top luxury brand in the U.S., but in recent years, it's faced growing challenges from competitors like BMW and Mercedes-Benz. Despite limited new product launches and lingering perceptions of being an "older person’s car," Lexus continues to hold its ground. Many believe that younger consumers aren't as drawn to the brand, though this is still up for debate. The challenge now is to reposition Lexus as a modern, appealing choice for a new generation.
Beyond age-related concerns, Lexus has struggled with fierce competition. For years, it was the leading luxury brand in the U.S., but by 2011, BMW and Mercedes took the lead, while Audi steadily chipped away at market share. In response, Lexus is focusing on attracting younger buyers, starting with a complete brand refresh.
A key part of this strategy is the redesigned Lexus IS, which marks the beginning of a new design language for the brand. The third-generation IS features a bold spindle grille, sleek curves, and aggressive front lines, giving it a more dynamic and sporty look. This visual update is aimed at making the brand feel more modern and relevant to younger audiences.
However, performance hasn’t kept pace with the competition. The IS 250 uses a 2.5-liter V6 engine paired with a six-speed automatic, but it feels sluggish compared to rivals like the Audi A4, BMW 3 Series, and Mercedes C-Class. These models offer more power and better transmission options, making them more appealing to performance-oriented buyers. To stay competitive, Lexus may need to introduce a turbocharged four-cylinder engine in the future.
Despite these shortcomings, the new IS offers some positives. It includes all-wheel drive as an option, which appeals to younger buyers, and it’s significantly more sporty than its predecessor, with a stiffer chassis and improved suspension.
Lexus is also trying unconventional marketing tactics. Instead of traditional dealerships, it’s opening unique showrooms that resemble cafes or lounges. These spaces allow customers to relax, enjoy coffee, and explore the brand in a relaxed, non-pressured environment—something that resonates with younger generations who often avoid traditional sales interactions.
Early signs are encouraging. In August 2013, Lexus saw a 23% sales increase in the U.S., selling more cars than both BMW and Mercedes for the first time in over two years. While one month’s data isn’t enough to confirm a trend, it shows potential.
Overall, Lexus is on the right path. With a fresh design, investment in the IS, and efforts to connect with younger buyers, the brand has a solid foundation for long-term success. If it continues to innovate and maintain its reputation for quality, Lexus could once again become a major player in the luxury segment.
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