A new Lexus dealership has opened in Oman (the country just south of the United Arab Emirates), and it was quite an event, attended not only by Toyota executive vice-president Akio Toyoda but practically the entire Oman ruling class.

Starting off with a performance by juggler Michael Moschen, the grand opening quickly escalated into a over-the-top spectacle:

Deeply absorbed in the performance, the guests were completely taken by surprise when a glowing heliosphere ethereally materialised, delicately floating towards the audience. Such was the effect of this performance that thunderous applause blanketed the entire seating area.

A Hollywood stunt artist made a dramatic entry from the roof-top and in tandem with the Taiko drummers and the heliosphere weaved magic on the spellbound audience. The act culminated in the much-awaited ribbon-cutting and official inauguration of the new showroom — drawing a spontaneous and sustained round of applause from the guests.

At that precise moment, the entire showroom lit up dramatically revealing the width and scale of its construction. A choreographed, spectacular pyrotechnics display followed, adding to the entertainment for the evening.

How’s that for grandiose?

[Source: Times of Oman via: Autospies]

Automotive News has a great interview with Stefan Smith, chairman of the Lexus National Dealer Advisory Council, which gives a very open view at how the dealerships feel about the recent increase in recalls and what kind of vehicles they’d like to see next:

What challenges do Lexus dealers face in the next year?

We don’t have any new product launches to speak of in 2008. We have the new LX 570, which replaces the LX 470 sport-utility. Then we have the launch of the “F,” which is the performance element that Lexus is getting into. We hope it will compete with BMW M series and Mercedes AMG. But those are small numbers.

In our core product — like ES and RX, IS — we don’t have anything new for ‘08. So we’re going to go through the entire year with virtually no new products. That’s the biggest challenge I would say that we have.

What’s missing in the Lexus lineup?

We have asked for and not gotten a sport-utility that would compete with, say, (Cadillac) Escalade or a (Chevrolet) Suburban-type vehicle. We’d like a vehicle with two captain’s chairs in the second row where you can walk through to get to the third row. And then third-row seats that fold down flat. We’ve never gotten there.

What does the factory need to do to help you sell more vehicles?

There are some segments of the market Lexus doesn’t compete in as well as we would like. The GS 350 vs. the BMW 5 series — we don’t compete that well in that segment. Would we like to? Sure. Do we compete in other segments and have an advantage? Yes, we do.

You’d like to have cars that are great in every segment, but you can’t be everything to everybody.

There’s plenty more to the interview, as well. There’s certainly no cause to doubt Stefan Smith’s honesty, he’s quite clearly a straight shooter and not one to mince words.

I do find his talk of dealers wanting a Escalade competitor surprising, considering that you could make a case for either the GX or LX fitting the bill. Admittedly, both lack the seating arrangement he mentioned.

(Photo above is Stefan Smith’s Lexus of Memphis dealership, where he’s also the general manager.)

[Source: Automotive News]

Longo Lexus, the largest Lexus dealership in the western US, will be growing even larger with the help of some substantial grants from El Monte, California (the dealership’s home) and the federal government. Along with the adjoining Toyota dealership, this grant of $3,000,000 will be used to construct a 50,000-square-foot service facility, additional parking, a revamped show-room and a 2,500-car parking structure behind the dealership.

Clearly, this is a serious upgrade, and according to El Monte Redevelopment Director Eugene Moi, very beneficial to the city as well:

Moi said the sales tax increase resulting from the renovations has already more than covered the city’s investment. And that’s before El Monte begins to cash in on the added property tax revenues from the new facilities.”We have made a prudent investment to stimulate further investment in the city, and it has definitely worked,” Moi said.

The construction of this upgraded dealership brings with it 131 new jobs, and this is on top of the existing workforce of nearly 860 people.

[Source: SGV Tribune via Autoblog]

Building off his presentation at the Automotive News World Congress, Lexus general manager Mark Templin outlined the future direction of Lexus dealerships in the US in an interview with Ward’s.

There’s a lot of information hidden in the details, but the primary point made is that Lexus will start to take on some characteristics of Scion, particularly in the way it deals with younger customers:

We’re learning about what young people want,” says Templin…“And that gives us a glimpse into the future. We can see what our future looks like by looking back and seeing what those people want today.

“The reality is, we’re all going to become like those young people. They’re not going to become like us.”

What Scion buyers want – and future Lexus customers will desire, as well – is a quicker purchasing and no-fuss service experience.

“Time is very important for them,” Templeton says of the Scion customer. “So we have to figure out how to speed up the process for them, whether it’s buying the car or whether it’s the parts and services side of the business. Those are important things.”

What’s interesting is how Templin plans to introduce these elements into the Lexus experience, with the most notable being “around-the-clock service facilities”. I can’t even imagine how difficult it would be to pull this off, though it’s an easy statement to misinterpret. It could mean that servicing and repair could be put on a 24-hour schedule, and not that it would be possible to get an oil change at three in the morning. But who knows? It would certainly be a one-of-a-kind service, that’s for sure.

It’s an indepth interview, and very interesting to read.

[Via: TTAC]

In a presentation at the Automotive News World Congress, Lexus General Manager Mark Templin outlined the automaker’s plans to enhance their US dealerships even further:

” We’re trying to create a feeling in our car dealerships more of a luxury hotel than a car dealership,” Templin said after his presentation.

The dealerships also want to have creature comforts so that buyers and prospective buyers can ” hang out” if they like, Templin said.

Almost all stores have a price menu for repairs and maintenance so customers can feel assured they’re paying the same as everybody else for service, Templin said.

This is a smart move by Lexus, the differences between luxury vehicles is getting smaller and smaller, and improving upon already exemplary customer service is a great way to differentiate from the competition. This is going to be a common path for all car companies in the very near future, luxury models or otherwise.

It’s also important to note that dealerships are responsible for their own upgrades, and in the last three years have spent over $1 billion on improving their facilities. There is a financial benefit to the spending, though, as that reinvestment means the dealership can request more vehicles from Lexus.

Having only visited one Lexus dealership in the United States, I ask my American readers: Are these price menus prominently displayed, and what types of options are listed? There’s something similar at my local dealer here in Canada, but it only covers oil changes and tire rotations, the smaller services.

With demand for dealer-certified used Lexus vehicles rising eight percent in 2007, Lexus has adjusted the requirements for its Certified Pre-Owned program. Eligible vehicles can now have up to 70,000 miles, where the previous mileage could only be 60,000. On top of that, the maximum age has been bumped up a year, to seven years old.

The multi-point inspection will remain the same, so vehicles will still have to meet some very strict quality standards, including a clean title history, but these changes could boost the used vehicle volume by seven percent.

[Source: Automotive News via Winding Road]

I stumbled on this image while looking for something appropriate for a previous post, and it was simply too good not to post. As for the story behind the photo, it comes from a 2005 Customer Service program run out of Lexus UK:

Lexus aftersales consultants are being given a taste of the luxury living enjoyed by their customers. All in the name of good business development, staff from Lexus Centres across the country are being pampered at top class hotels as part of a programme to raise customer care to an even higher level: experiencing for themselves the kind of quality and service their clients enjoy and expect, will help them hone their own customer care skills.

The hotel visits are not just about the high-life, however, as the training sessions include “trust” scenarios, for example where one person is talked through the procedure for shaving a blindfolded colleague with what they believe to be a cutthroat razor. This relates to the way in which new customers need to be introduced step-by-step to the aftersales procedure, without, of course, any risk of blood-letting.

For a company already renowned for its customer service, Lexus knows better than to rest on its previous success, and what better way to improve than to have sales consultants cutting at each other’s throats?

[Source: Lexus UK]

The Wall Street Journal has an article up about the increasingly lavish Lexus dealerships that are popping up all over the United States. It’s an in-depth and enjoyable article, detailing not only the amenities but explaining the logistics behind such large investments:

The Lexus of Palm Beach dealership moved from a much smaller, older facility a few miles away to a building that cost $35 million to construct, about four times what dealers typically spent on upscale showrooms 10 to 15 years ago…In November, the first full month of operation, the store sold 335 new vehicles, making it the fifth-largest Lexus dealer in the U.S. A year ago, it sold 199 and ranked 25th.

For the past few years, Lexus has offered deals under which it will allocate more cars to dealers that upgrade their facilities. For the $35 million investment in its new showroom, AutoNation’s Palm Beach can order 2,000 cars on top of its normal allocation over the next 18 months or so. That leaves room for a lot of growth. Last year, the store sold 2,710 new cars.

Well, it takes money to make money.

A great article, to be sure.

(The photo above is Lexus of Santa Monica, California.)

[Source: Wall Street Journal]

Nancy Fein, Lexus’ Vice-President of Customer Services, recently gave a talk at the Source Media Customer Engagement Symposium, where she discussed how Lexus reacts when things go wrong. Bill Taylor, co-founder of Fast Company and business author, was at the event and recapped the presentation:

…what happens when big dreams get mugged by reality? That’s what Nancy Fein addressed in her talk. As soon as the first Lexus 400 sedans hit the market, she said, the company learned that there were three minor technical problems with the car.

So more than 300 Lexus officials organized into small groups and traveled to all parts of the country. They visited the affected customers at home, brought them a gift, apologized for the glitches in person, and, of course, brought along a technician who fixed the problems. On the spot. In their driveways.

A familiar story, but I was very interested to read about a more current event:

Last year, another small problem developed with a Lexus model—this time, the new ES 350 sedan. Something about the transmission skipping second gear and slipping from first to third. (Don’t ask for more details, I’m not a car guy.) The problem affected about 700 cars before the Lexus factories fixed it. This time, rather than visit customers at their homes, Lexus did ask them to visit their dealer. But instead of just fixing the problem, Lexus gave all the affected customers a brand new car. No questions asked.

Being as how a faulty transmission is a fairly significant repair, having dealers swap the cars with new ones has to be the most effective response that I can think of. With no time lost by the owner, there’s no bad feelings, no backlash. Even better, Lexus can repair the affected vehicles and then resell them at a slight discount.

Very smart.

[Source: Havard Business Online]

After years of selling through independent importers, Lexus is now setting up dealerships in Indonesia, which look like an eccentric millionaire’s home on the outside and an art gallery inside.

The exterior, I think, may be too wild, though it’s hard to get a full impression from the pasted together image at the top of the post. The organic look at the left is particularly awkward, though the right side has just the right amount of character.

The interior, though, is what impresses the most:

Marketing strategist Hermawan Kartajaya, who worked on the project, has this to say:

From the insights that had been gathered, we came out with some suggestions and one of them was to build something more than a showroom. We suggested an artistic place and called it a ‘gallery’. What are the differences actually? There are a lot of differences between a showroom and a gallery, but the main thing is: in a gallery there is a “customer flow”, just as when we visit a painting gallery or statue gallery. In art galleries there is a flow and story – the same concept applied in the Lexus Gallery.

(Another interesting point, Lexus’ slogan The Pursuit of Perfection was translated to Perfection of Personal Enjoyment for the Indonesian market.)

[Source: Hermawan Kartajaya]