Lexus looks younger with IS 300

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Lexus is chasing younger buyers--and European competitors--with its all-new IS 300 compact sports sedan.

The new 2001 model from the luxury marque of Toyota Motor Sales USA is aiming smack at BMW of North America's 3 series and Audi of America's A4, said Mike Slagter, corporate sales manager at Lexus.

"They're tough competitors, but we'll be able to go wheel to wheel with them in a very short time."

Mr. Slagter, formerly corporate marketing manager of the brand, projected Lexus would sell 12,000 IS 300s this year, with sales rising to 25,000 units in 2001. Lexus doesn't expect the new model to cannibalize sales of the ES 300, the line's other entry luxury sedan.

"We expect a new breed of customers coming into our showrooms," he said.


Lexus is targeting its youngest buyers ever, between the ages of 35 and 40, roughly 75% male, married, highly educated with annual household incomes of $100,000, he added. The current average age of a Lexus owner is 50, said Chris Conard, national advertising manager, with the median age of the brand's hottest selling vehicle, the RX 300 sport-utility, at 48.

"All luxury brands are trying to get younger buyers because they don't want to end up like Cadillac," she said.

The estimated $32 million campaign for the car broke recently on national TV and continues through July. Team One, El Segundo, Calif., created the two national TV commercials, five TV spots for regional dealer ad groups and two magazine ads. The agency also created billboards and six commercials that will be projected on buildings in three cities.

The spots were shot in Los Angeles before the actors strike began.

Lexus made its first buys in Code, Esquire and Maxim to reach the new target, Ms. Conard said. Print starts in July books. The campaign positions the car as "sufficiently radical." Both stark print ads dub the car "radical without being ridiculous."


Another national TV spot bows June 29 on ABC's "Who Wants to Be a Millionaire." That commercial was created by a yet-unidentified consumer who entered the car marketer's online contest to win an IS 300.

Lexus should meet its sales target easily, since Toyota traditionally makes conservative public estimates, said Wes Brown, an analyst with marketing researcher Nextrend. Lexus IS has a bigger issue to face. He questioned whether "the product is going to be able to transcend the Lexus brand image or will the brand image be so strong that it will be unable to attract the same psychographic the [BMW] 3 series does?"

Lexus has a good brand image, based on its bullet-proof quality, luxury image and use of in-vehicle technology, Mr. Brown said. But the marketer almost has two lines: the ES and LS for more conservative luxury buyers and the GS and IS for people who like to drive.

The brand is evolving its image after only a decade in existence, much as Mercedes-Benz USA did in the mid-1990s, moving from conservative to hipper with fresh products and a new style of advertising, he added.

Nextrend's research before IS 300's arrival on the scene revealed Gen Y buyers aspire to Lexus when they're older, but want a BMW now.


Lexus currently is conducting a tour of 10 cities for the IS 300, inviting consumers in their 20s and 30s to test drive the car against the BMW 3 series and Audi A4, said Gordon Wangers, managing partner of auto consultancy AMCI. The IS 300 "will move the needle away from Lexus as an old man's car." He said "it's almost shocking how nimble the IS is and how you can drive it with confidence."

The national TV spots aim to position the IS 300 buyer as an "iconoclast, an independent spirit who dares to challenge the status quo," Ms. Conard said. One spot shows an IS driver trying to blackmail his boss for a $150,000 raise, but viewers see the photos he's using to scare the boss are of a lawnmower and a sneaker.


"They're cute, but maybe not for the car and the type of buyer," Mr. Brown said of the spots, adding BMW and Audi commercials are more emotional. "We learned through research this buyer is different for Lexus and is looking for something unique."

The regional spots are more performance-oriented. One shows a dashboard gauge moving up and down to engine noises. On-screen text informs viewers the gauge belongs on the new IS 300. "Take your time. We're not showing you anything else," it reads.

Lexus sold 77,471 vehicles in the first five months of 2000 vs. 74,788 units in the same period a year ago, according to Automotive News. Last year, Lexus sold 185,890 units. Mr. Slagter projected total sales of roughly 200,000 this year.

Copyright June 2000, Crain Communications Inc.

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