It's a bit of the ol' "good news, bad news" business for the world's largest automaker: Just days after being crowned the international sales champ for 2010, Toyota has voluntarily recalled about 245,000 Lexus IS and Lexus GS sedans from the 2006-2009 model years in the U.S.'”and some 1.7 million vehicles globally. Which means it's mostly bad news for the company, since seeing its Recallathon get off to another strong start in 2011, particularly when its luxe division is involved, looks like it could signal another difficult year for Toyota.
Lexus Gained Customers in 2010
Normally, that subhead wouldn't be much of a shock, but let's recall, I mean, remember, that the Toyota division itself wasn't able to accomplish that goal last year. The mainstream part of the business was responsible for about 20,000 fewer annual sales in 2010 than in 2009, a drop of roughly 1.3 percent, while Lexus increased sales by a bit over 13,000 units, an increase of approximately 6.2 percent'”a mark significantly lower than the overall industry's gain of +11 percent.
It wasn't a very impressive performance, but at least Toyota could spin some positives out of it. For example, the numbers could be showing that, while some Lexus models did get recalled in 2010, it didn't affect customer perceptions overmuch because most of the public (and the media) framed the automaker's problems as a purely Toyota-division issue. Yes, it's bad when your mainstream vehicles start gaining a rep for poor quality, but the situation is orders of magnitude worse if it happens to your luxury division, which is supposed to be where you show off the best of your best.
And that's especially the case when your luxury division is responsible for well over 200,000 sales a year. This is significantly more sales than Buick or Cadillac or Audi, and right on par with Mazda or Mercedes-Benz or BMW. In fact, it wasn't by much, but Lexus was the No. 1 luxury make in the U.S. last year.
Obviously then, Lexus sales matter a lot to Toyota, both as regarding the bottom line and in terms of the automaker's reputation.
What Is the IS?
With all apologies to entries like the Lexus RX crossover (the brand's top seller), the Lexus CT 200h (its hot-hatch hybrid) or the Lexus lFA (the division's halo supercar), the IS just may be the most important Lexus on the road today. As the current entry-level Lexus, with a fair amount of design flair and available road performance, it would make an excellent and relatively easy-to-acquire introduction to a new Lexus, and a new Toyota, that are dead-set on increasing their ability to engage drivers with their products.
I mean, I don't need to tell anyone reading this that most members of the overall Toyota lineup, including those from Lexus, are generally thought of as bland and soulless. Or that quite a few of today's Toyotas are reaching the end of their effective life cycles. Or that we're hearing an increasing amount of noise from Toyota execs recognizing both those facts.
But note that what we've actually seen lately are products like the Scion iQ (whose U.S. launch is now being delayed), the Toyota FT-86 (which will have plenty to prove as a small rear-wheel-drive coupe being shared with Subaru), the new Toyota Prius v (the Prius, writ larger) and that CT 200h (also likely to face some pushback from buyers as a small premium hatchback).
What it Should Be
As much as Toyota's quality problems are affecting its sales here in the U.S., the age of its products, as I mentioned above, is also causing problems. A strong launch of a hot product would help, but outside of the potentially problematic FT-86, there isn't much on the near-term horizon that fits the bill.
But the current IS'”which is NOT on the recent recall list'”is a nice alternative to today's crop of entry-luxe sedans, with a starting price of $32,645, rear- or all-wheel-drive, two engine choices, plenty of available gadgetry, the ability to reach 30 mpg on the highway and, as I hinted, some dynamic design elements.
That should make it an ideal choice as a sort of stop-gap vehicle for Lexus to focus on while Mr. Toyoda and crew continue their efforts to right the overall Toyota ship.