Lexus: Toyota’s brand image builder

In 1988, while working on the U.S. marketing launch strategy for Lexus automobiles, Toyota faced with an undeniable brand perception that a “Japanese luxury car” was an oxymoron.Americans saw automobiles made by the Japanese as cheap, small and lacking in quality and luxury.Toyota wanted to change that brand perception–not only to sell Lexus cars, but to elevate the Toyota brand as a whole by its association with Lexus.

The successful plan was to build a stand-alone brand called Lexus that did not have the negative associations that the Toyota brand had in the eyes of the American public. They launched the company with the tagline: “The relentless pursuit of perfection.”The plan worked then, and it is working now as Toyota faces a life-or-death struggle to deal with its issues of quality in the light of the recalls of millions of its cars.

While Toyota is being pummeled, Lexus is being shielded by the brand separation that was devised over 20 years ago. Lexus sales are up about 5 percent so far in 2010 compared with last year, while sales of models with the Toyota nameplate fell 15 percent.

Interestingly, at the same time, on a per-vehicle basis, Lexus is responsible for more reports of unintended acceleration than the rest of Toyota. About 500,000 Lexus cars have been recalled. “Toyota is of course the headliner,” said Stephanie Brinley, an analyst with the consulting firm AutoPacific. “While it seems like everybody already knows that Toyota and Lexus are related, that may not be the case. The Lexus name has not been as criticized.”So, as the Lexus brand helped Toyota 20 years ago to establish a reputation of quality, and dispel negative brand perception, they may be in a position to help once again, as Toyota looks to ways to revive its past brand glory.

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