Toyota Puts Century Above Lexus
Hello dear readers,
ℹ️
One of the most fascinating parts of the automotive business is brand building. How do you rhyme a world that is dominated by economies of scale with the human desire to feel special, to have their belongings express something about themselves. Brand building and positioning is arguably one of the hardest tasks of a car company, especially in current times with so many new players entering the market. Toyota, not to be outdone, is adding an extra card to its deck: the Century brand.
💡
If there is one thing you can't hold against the biggest car manufacturer in the world it's that they don't think things through. I'm convinced they have detailed and multi-year plans ready to turn the new brand into a succes. At least I hope so, because building brand equity is a long, steep and winding road. Getting to the top is hard and patient work, falling off the cliff takes just one screw-up.
💡
Just how touchy the subject can be is illustrated by something I experienced in my younger years. I vividly remember an exchange between my dad and a wound-up lady at the counter of a gas station in the 90's. I must have been 14 or 15 years old and commenting on the nice brand new Lexus standing at one of the pumps. To which my dad casually remarked that it was a Toyota. Boy was that a mistake, the owner happened to stand behind us and made quite a scene that Lexus was definitely not Toyota! Of course both were right, Lexus is just as much Toyota as Audi is part of the VW group. They share management talent, components, funding, sales infrastructure, platforms, etc... But they are also very much different. Using different hardware and software, differentiating sales strategies and especially marketing their products in a completely different way.
💡
Contrary to what you might think the most interesting part of this move by Toyota will be to see how they position Lexus in the future. Resolutely putting forward Century as the top luxury brand creates space for a premium, more technology oriented, positioning for the old top dog. We will also have to wait and see if Century will ever make it to Europe where Lexus has always had a bit of an awkward positioning compared to the three Big Germans. Techy like Audi, Sporty like BMW at times but very often attracting the older Mercedes luxury oriented crowd that wants something special. It also remains to be seen just how far up the food chain Toyota wants to push the new brand. If they truly have Rolls and Bentley in their sights, they will need to be very careful to stay far away from the mothership. Mercedes has shown in recent years just how difficult it is to truly move up-market while keeping volumes high enough.
🔗
More info in Nikkei Asia
Grtz
Pieter
PS: If you think this newsletter could interest someone you know, please forward this email. They can sign up for free on this link.