Lexus IS F
Lexus
The Lexus IS F has a 5-liter V8 engine capable of over 400 hp.
By Roland Jones Business news editor
msnbc.com
updated 10/9/2007 9:04:08 PM ET 2007-10-10T01:04:08

With its plush luxury sedans and sport utility vehicles, Toyota's upscale Lexus division has acquired a reputation producing dependable but staid commuter and family vehicles.

But the carmaker is hoping to shake up that reputation a bit with its forthcoming 2008 Lexus IS F sports car, a supercharged model that will go on sale in the spring, taking on European rivals from BMW, Porsche and Audi as well as American muscle cars like the Chevrolet Corvette.

“Lexus doesn’t have a ‘halo’ vehicle, and in the luxury automotive world that’s important,” said Michael Robinet, an automotive analyst at consultancy CSM Worldwide. “[The IS F] is a vehicle that won’t necessarily drive up Lexus’ bottom line, but it will drive traffic to showrooms and bolster the company’s image. Lexus is looking for younger buyers right now, and so they want to make a big splash with this vehicle.”

The IS F got a burst of publicity last week when it was featured as one of the costliest items offered in the annual Neiman Marcus holiday catalog, The Christmas Book.

For a mere $68,000, well-heeled shoppers can be among the first to own the new car, complete with a black leather interior, hand-polished wheels and a sequentially numbered Special Build badge.

The performance-tuned sports sedan is the fastest production car Lexus has ever built, designed to take on the BMW 3 Series, Audi RS4 and Porsche 911, among others.

The new IS F measures up against the German imports when it comes to performance, accelerating from zero to 60 mph in under 4.9 seconds. And its five-liter, V8 engine is capable of delivering more than 400 horsepower, offering about 20 miles per gallon in Japanese test-driving conditions, according to Toyota. That is decent mileage for a sports car, especially when you consider new EPA mileage standards rate Audi’s RS4 as managing a combined 15 mpg and the Porsche 911 18 mpg.

The LS 430 luxury sedan helped Lexus establish its reputation. Now Lexus wants to take the brand a step further and inject some emotion into it, according to executive vice president Akio Toyoda, who is responsible for Toyota’s domestic operations.

“Lexus has long been renowned as a luxury, high-quality brand,” he said at the car’s unveiling last week at Fuji Speedway, the automaker’s racing circuit near Mount Fuji in Japan. “But to be recognized as a true global premium brand, we knew we needed more emotional vehicles.”

Lexus is the nation’s top-selling luxury brand, and its initial sales target for the IS F is modest — around 7,000 models globally next year, with most of those sales in the United States. With its strong position in the U.S. market for premium cars, that objective seems viable for the automaker according to Paul Newton, an analyst at consultancy Global Insight.

“There appears no reason why the brand will not reach its targets based on the styling and early reports of its performance,” he wrote in a research note, adding that the model’s prospects in Europe and Japan are less clear.

“A sporting halo model cannot harm its somewhat staid image in Europe,” he said, but “the brand needs time to gain traction in Japan, where it has only been present for the last three years.”

The dollar's declining value against the euro could help Lexus, as European-made vehicles  become more expensive. European automakers have largely resisted raising prices, but that may have to change soon, said Robinet.

“Now is key time for luxury Asian brands because of the strength of the euro, which is making it hard for the luxury European manufacturers,” he said. “Any time the value of the dollar falls, import prices rise, and the import manufacturer has to take a haircut on the sales margin to keep the price of the vehicle the same.”

Lexus has a strong lineup of models to offer consumers lured into showrooms by the high-performance IS F, Robinet added. Popular models include the RX crossover and LS luxury hybrid, he said.

Lexus is also likely aiming at aging baby boomers — empty nesters with spare money to spend on a sporty new vehicle.

Even as overall auto sales are struggling amid ongoing pain the housing sector, luxury car sales are holding their own.

In September, as the Big Three U.S. automakers posted an overall sales decline of 4 percent, U.S. sales for luxury automakers BMW and Mercedes rose 11 percent and 17.5 percent, respectively, over the same period one year before, according to Wardsauto.com, which tracks industry data. Lexus said U.S. sales of its passenger cars in September were 10.6 percent higher than in the same period a year before.

The Associated Press and Reuters contributed to this report.

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