Toyota’s recall has diminished Lexus’ standing with consumers

Article by Christian Andrei, on August 25, 2010

Even Lexus' image was hurt by the recall crisis that Toyota is currently facing. Market researchers say though that Lexus' reputation didn't take as much beating as Toyota, which has been battling the escalating crisis during the past two months. BrandIndex Service in New York, which conducts surveys on consumer brand perceptions, said that Lexus' quality reputation is at its lowest ever.

According to Edmunds, purchase intent (defined as a shopper's configuring a vehicle online) and other factors are down as well. Drew Kerr, a BrandIndex spokesman, said that in 2009, Lexus and BMW competed neck-to-neck with each other in quality scores. But in early February, Lexus found itself spiraling downwards quickly.

In the US, Toyota has issued the recall of over 6 million vehicles, mostly related to unintended acceleration cases. About 450,000 of this number are Lexus vehicles. On the other hand, the recall of the ES 350 and the IS 250 and 350 last fall was centered on defects in the pedals and floormats.

Early this year, the new HS hybrid was recalled to install new software for braking. Sales of Toyota have dropped significantly but Lexus is actually up 5% so far this year. This is attributed to the addition of the HS and the redesigned GX SUV. Lexus' increase pales in comparison to its rivals. Mercedes is up 24% while BMW is up 12%.

Since 2000, Lexus has been the leader in the luxury sales market but in February, both Mercedes and BMW had higher sales. In a monthly sales call, Lexus Division chief Mark Templin said that despite the challenges, the division is still pleased that sales in February went up compared to the previous month.

He said that this means that the company is on pace with its plan for "moderate growth" this year. BrandIndex conducted its survey by asking whether a brand has high or low quality. A score of 0 indicates an even split in the answers. On March 8, Lexus' score was 30, down from 45 on Jan. 1 and 48 in early February. Meanwhile, Toyota's score had dropped to minus 5 on March 8. [via autonews]

Topics: toyota, lexus, recall

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