Mercedes S-Class and Lexus LS
Lexus and Mercedes
Spot the difference? These images of a Lexus LS, pictured below in its 2006 version, and the Mercedes S-Class (above) show the similarities between these two luxury sedans.
By Roland Jones Business news editor
msnbc.com
updated 5/23/2006 5:14:39 PM ET 2006-05-23T21:14:39

When Lexus pulled the covers off its 2008 LS hybrid at the New York Auto Show last week, its elegant styling and sleek shape drew murmurs of admiration from the throng of reporters gathered to witness the luxury sedan’s debut.

But its unmistakable resemblance to the Mercedes S-Class also raised a few eyebrows.

It’s no secret that Lexus, long the number-one luxury brand in the United States, has set its sites on competing with European luxury passenger car brands like Mercedes and BMW. But the contours of the new Lexus LS hybrid, its headlights and even its state-of-the-art safety features, were strongly similar to the celebrated S-Class, showing that, while imitation may be the sincerest form of flattery, in the automotive industry it has become a way to challenge the dominance of your rivals.

“Why are cars made by Mercedes and Lexus looking the same? Because Lexus is going after a European look, and that’s what’s selling these days,” said Kevin Reale, an automotive industry analyst at AMR Research. “Cadillac’s lines are a lot sharper, but the smoother European lines are more popular. So in the end we have to ask ourselves if this is plagiarism, or if it’s just a case of understanding what the customer wants?”

Toyota launched its Lexus luxury car brand over a decade ago as a low-cost alternative to European luxury cars, and since then it has produced a series of very Mercedes-like cars, at one point a few years ago drawing the ire of the German carmaker for what Mercedes reportedly called “copycat cars.”

When it comes to imitating a winning formula, Lexus is not alone of course. As vehicle manufacturers continually strive to perfect their product in a fiercely competitive marketplace, they may “borrow” successful styling from other carmakers. Some worried carmakers are even reluctant to show off new models too early for fear their design is quickly copied by a rival.

Recent examples of imitation include Toyota’s MR2 roadster and the highly successful Porsche Boxster, or the Chevrolet HHR and the PT Cruiser. Styling replication can sometimes get hostile, such as in 2004 when General Motors filed a lawsuit against China’s state-owned car producer Chery Automobile, alleging Chery’s QQ copied the design of the Matiz, a mini car developed by its South Korean affiliate Daewoo. Chery said it developed the QQ on its own, but GM disagreed — and won a settlement in the case.

Intellectual property is sacrosanct, but only to a certain degree, notes Bruce Sunstein, who heads the Patent Practice Group of Bromberg & Sunstein LLP in Boston. Sunstein says most car manufacturers would likely argue that the unique appearance of their car, such as the shape of the grille, is significant, and so if someone copies it that can become an issue of “trade dress” infringement, because the appearance of the product is something protected by trademark.

“Generally, you can’t win unless the consumer is confused by what they see, so if you recognize a car is a Lexus and think it looks like a Mercedes, generally that’s not enough,” he added.

There’s an argument to be made that one car can end up looking like another through no particular intention notes AMR’s Reale. An issue for the automotive industry right now is the movement of designers between automotive manufacturers, he said. A Chrysler designer may move to General Motors, or another car company, but that designer will take his design expertise with him.

“How do you patent a concept or style that’s inside someone’s head?” Reale said. “What we have seen and will continue to see is if there is a successful designer they’ll be in demand, and if they have certain style at one company, it will probably be there when move to another company. Change one line on a car’s outline and all of sudden its totally different vehicle.”

Similarly, the framework a vehicle is built on has an influence on its overall look, said Reale. Some manufacturers use the same platform for difference vehicle brands and lines, giving them a similar look. Manufacturers also use other manufacturers’ platforms to save money. “Is that component plagiarism or simply two automobile manufacturers engaging in cooperation?” Reale asked.

Automobile manufacturers recognize the benefits of good styling. At DaimlerChrysler, for example, the boldly styled Dodge Charger and Chrysler 300 models have been turnaround cars for the company. Ralph Gilles, credited for designing the Chrysler 300, was recently promoted to vice president of Jeep, truck and component design for Chrysler.

“DaimlerChrysler has done well to recognize talent in this person and so they have promoted him and have given him the opportunity to expend his talents across whole company,” Reale said.

Automakers do well to focus on good styling, as it pays off notes George Hoffer, a professor of economics at Virginia Commonwealth University in Richmond, Va.

Hoffer, who has studied the impact of style on the automotive industry, tracked every car sold in the United States automobile market between 1977 and 1992 and discovered that if a manufacturer redesigned a car model in a given year, and its competitor did not, sales of that car model increased 63 percent compared with sales of its competitors that did not restyle.

He takes the question one step further and puts forward the theory that a relentless focus on styling has helped Japanese automobile manufacturers like Toyota and Nissan to steal a march on their U.S. rivals, who until recently dominated the U.S. market and determined styling trends.

“I would argue that decline in U.S. market share of the American carmakers is in fact not really about quality, but more about the fact that they are being ‘out-newed’ with new produce from their overseas rivals,” Hoffer said. “The American product is stale, and the American manufacturers have put their money into the legacy costs associated with healthcare and pensions,” he added. “New entrants into the U.S. auto market don’t have to do that.”

The Chevrolet Cavalier is a case in point, Hoffer notes. It was launched in 1982, and up to its final production year in 2005 it saw two major restylings, in 1988 and 1995. During the same period there were six new Honda Civics and six new Toyota Corollas — both models were in direct competition with the Chevy Cavalier.

More recently, between 2000 and 2006, Ford has only restyled 5 percent of its models, Hoffer calculates, while Honda has restyled 21 percent of its models, Nissan has redesigned 20 percent of its vehicles and the Korean auto manufacturers, Hyundai and KIA, have updated 23 percent.

“Styling sells, and the American car companies are being out styled by foreign competitors,” said Hoffer. “It’s exactly what the American car companies did to the independent manufacturers in the 1950s,” he added. “They couldn’t afford to change their styling as much, and their market share deteriorated.”

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