German Car Zone

Luxury Wars

Lexus may be America's best-selling luxury car brand, but it can't come close to BMW's reputation for driving excitement. Now Lexus, Toyota's luxury division, is aiming squarely at the German carmaker with two new high-performance vehicles.

The LF-A supercar prototype, equipped with a 500-horsepower V-10 engine, is a follow-up to a concept car Lexus debuted on the 2005 auto show circuit. "This latest concept is much closer to a vehicle that we would bring to market, and one in which we will be gauging consumer interest," says Lexus General Manager Robert Carter.

Meanwhile, a high-performance model that's definitely headed to Lexus showrooms is the 2008 IS-F sports sedan. It's a supercharged version of the rear-wheel-drive IS and will come with a 5.0-liter V-8 that delivers more than 400 horsepower.

Lexus has been moving steadily upscale to compete with other luxury marques at the high end of the market. Its newly redesigned flagship, the LS, for instance, now comes in two wheelbases--the longer one will compete head-to-head with the Mercedes S550 and the BMW 750 IL.

And in June, Lexus will introduce a hybrid V-8 version, the LS 600h L--that will provide the performance of a V-12 engine, but offer better fuel economy and cleaner emissions. Expected price range: $100,000. Now that's luxury class.

High-performance sports cars offer yet another expansion opportunity for Lexus, which sold 322,000 cars in the U.S. last year--its seventh year in a row as America’s top-selling luxury brand. With the new F-line of performance cars, Lexus will be better able to compete with BMW's M-series, Mercedes' AMG line and Cadillac's high-performance V-series, says Carter.

As it strives for high-performance characteristics, Lexus must be careful not to alienate the customers who have come to prefer its smooth, comfortable ride, Carter acknowledges.

For its part, BMW is paying close attention to the move by Lexus into its territory. "With the power of Toyota (nyse: TM - news - people ) behind it, you can never underestimate Lexus," says BMW's worldwide sales and marketing chief, Michael Ganal.

But Ganal says he's more worried about Nissan's Infiniti brand, which is positioned directly below BMW. "Infiniti is more dangerous than Lexus," he says. Its sporty performance lineup is priced 10% to 15% lower than comparable BMW models. Yet Ganal insists BMW will stand pat against the competition. "We will not move down to attack Infiniti at eye level."

Source: http://www.forbes.com/business/2007/...110luxury.html

I think that his concerns are in the right place and certainly justified. Lexus will never duplicate a BMW in every way like Infiniti is trying to do. Infiniti builds spot-on BMW competitors in 2 classes that are much closer to the BMW models they apsire to beat than any Lexus is. The Lexus GS is a joke of a 5-Series competitor, the IS is powerful, but doesn't have the chassis or a manual in the IS350 to compete with the 3 head on. Lexus won't trade their soft and comfortable/quiet ride for true BMW dynamics, that will always limit them.

Infiniti on the other hand will and does. The G35 and M35/45 are as close to anything BMW as you can get from a Japanese maker, by far. Infinitis even have their own look, but they still lack that refinement and cohesiveness that BMWs have, but they're really trying to get it right.

Lexus may be the best selling brand, but that hasn't mattered one bit to BMW's sales growth because they are two very different cars for different types of buyers. BMW's sales would not have grown they way they have during the same time Lexus' sales grew if Lexus was BMW's biggest competitor.

In the U.S. have have a distinct hierarchy.

Mercedes, BMW, Lexus are the first tier and Acura, Audi, and Infiniti are 2nd tier. Like it or not that is just the way it is. You can debate who is #1 within their respective tiers, but the tiers are clear.

Infiniti and Audi are looking to move up seriously, but Acura is still a tweener brand.

M

Yep, I have to agree.

Lexus is more a threat to Mercedes Benz than BMW. Two very different buyers once you go up from the IS.

Funny thing is that Infiniti is able to price it's cars much lower because platforms and parts are much cheaper to produce since so many Nissan/Renault products already use them. BMW on the other hand has the Euro and increase engineering expenses working against them in this area. However, Infiniti does not resonate with buyers the same way BMW does, but with a new generation of consumers this same mentality won't be as prevalent as it is now. This new generation of consumers hasn't grown up around just the German luxury import cars but also their Japanese counterparts.

Not exactly. The G35, 350Z, FX35/45, M35/45, all use either the first or second generation of the FM platform. That is a Nissan specific platform as far as I know. None of the French cars use that platform. Nissan's other cars might use a shared platform with their French counterparts, but the 350Z and the Infinitis don't as far as I know.

M

Well come to think of it, Infinity is part of the Renault-Nissan Alliance.
So who knows if they won't get acces to some Renault F1 know-how and goodies to help it challenge the sporty german counterparts ?!

No, I don't think Renault would release propriatary F1 information to nissan even though they have an alliance. Plus, you are underestimating Nissan. Nissan has been making bad ass rwd and awd cars for a long time, when it comes to driving dynamics they're a pretty good company, what they lack is refinement when it comes to luxury.

The current G35 coupe is really nicely designed car with decent amount of luxury and tech inside plus it drives really really good. I had chance to push that car about a year ago when one of my friends bought it. He brought it to me and said "let's see how good this car is" and gave me the keys. So I took it out for a spin with like 4 other guys in that car and powersliding that car around turns and gripping when I wanted to was so easy. I was more impressed with that G35 than my other friends 330ci.