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Lexus (Japan)

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Lexus is the luxury car brand within the Toyota portfolio. The Lexus brand was originally conceived by Toyota as a competitor in North America to imported European models BMW and Mercedes. Shortly before its launch in 1989 the original planned name of Alexis - after the Alexis Carrington character from TV soap Dynasty - was recast as Lexus. (A brief legal skirmish followed when information services database LexisNexis claimed unsuccessfully there was a risk of confusion between the two brands). As a result of its success in the US, Lexus was extended into Europe in the 1990s and finally arrived in Japan and China in 2005. That year, it was the first luxury car brand to introduce a hybrid model, using the same technology as Toyota's Prius.

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The Lexus range now extends to eleven models including four exceptionally popular SUV/RV designs. Several models are also available as gas-electric hybrids, using the same technology as parent Toyota's Prius. Originally available only in the US and Canada, the brand has gradually been extended into other markets as well. Europe has had the marque since the 1990s, but the most significant change was the launch of Lexus as a standalone brand in Japan and China from the mid 2000s. The marque is now sold in more than 75 countries around the world, although the model range varies quite widely from market to market.

Like all Japanese manufacturers, Lexus suffered protracted production difficulties in 2011 as a result of the Great East Japan Earthquake and subsequent floods in Thailand, but volumes finally bounced back in 2012, with unit sales rebounding strongly. Volumes for 2014 were 582,000 units. The US remains the biggest market by far, still accounting for more than half of sales. In 1999, Lexus toppled Mercedes-Benz as the top-selling luxury car in the US, and managed to hold onto that position for the next 11 years before being held back by 2011's production problems. As a result, it was overtaken that year by both BMW and Mercedes-Benz. Despite a slew of new models including redesigns and a new compact crossover SUV aimed at a younger audience, it has remained in third place ever since, though US sales topped 300k for the first time since 2007, rising 14% year-on-year to 311,389 vehicles. Other key markets are China and Japan. The top-selling model by far is the RX SUV, accounting for more than a third of unit sales, followed by the ES sedan, CT hatchback and GS midsize sedan.

Gradually Lexus has been established as a standalone brand, operating from a separate network of dealerships (many of them former Toyota dealers). In the US the group signed up as sponsor of the US Open Tennis Championship in 2005, replacing previous sponsor Lincoln. It also operates its own dedicated online entertainment channel, LStudio.com, which features specially created comedy and documentary content.

Background

The Lexus range was first conceived by Toyota in 1983 in a bid to compete in the US market with imported European brands such as Mercedes and BMW. It was Toyota's first move into the luxury car sector and the group devoted considerable resources to creating an impressive debut model, spending six years and a reported $1bn on product research and development. Shortly before launch the original planned name of Alexis - after the Alexis Carrington character from TV soap Dynasty - was recast as Lexus. That led to a brief legal skirmish with information services database LexisNexis, who claimed that there was a risk of confusion between the two brands. The case was dismissed by a US court. Finally unveiled in 1989, the Lexus LS400 proved a major success with buyers, comparable in every way to the top-selling German cars but at a lower price. The marque was introduced in Europe in 1990.

Initially the range was restricted to just one model, sold alongside the existing Toyota portfolio, but only through a small group of hand-picked dealers. Mid-decade the company began to differentiate further between the two marques, introducing a second Lexus model, the GS300 sedan in 1993, followed by the IS200 sports sedan in 1999. At the same time, the distribution of the Lexus brand was extended across mainland Europe, and now covers around 60 countries. Until recently, all models have been manufactured in Japan, although the Lexus marque was restricted to the export market (although selected models were available within Japan under the Toyota badge). In 2003, the company began producing its first models in Canada, and introduced the Lexus brand in Japan for the first time in 2005. The brand performed very strongly, achieving around 17% of Japan's luxury market by the end of 2006. Also in 2005, the company released the first ever hybrid vehicle in the luxury segment, adding Prius technology to a new version of the RX 400. Since then, Toyota has steadily expanded the Lexus footprint, launching the brand in several other Asian markets including China, Indonesia and the Philippines.

Last full revision 24th November 2015

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