In a May 2006 survey, Porsche was awarded first place as the most prestigious luxury automobile brand by Luxury Institute, New York; it questioned more than 500 US households with a gross annual income of at least $200,000 and a net worth of at least $750,000
Mercedes was awarded second place, and Toyota's Lexus division, third. There are a number of problems with this, and I will attempt to explain why Lexus doesn't belong on this list.
The first problem with this survey is that it did not give an adequate definition of prestige. Is it based on single factors such as technological innovation, engines, heritage, performance brands, awards, average transaction prices, owner demographics, or parent company/acquisitions, or is it a culmination of all of these things?
Lexus doesn't belong on this list for a number of reasons. Let's break it down:
1. Technological innovation: The most marketed event in the brand's history was the "invention" of the hybrid system. This was hardly an innovation--in fact, it was just the opposite. Audi has been at the forefront of hybrid testing and research since the late 1980's, releasing their first prototype in 1988. Audi was also the first premium brand to bring to market a hybrid vehicle, the DUO, in 1997. Why is Lexus credited with inventing hybrid when all they did was copy existing technology?
Look closer, and you'll find a number of other technologies on Lexus cars is a copy of what you see on the competition first, and often is brought decades after it was originally created.
2. Engines: How many of Lexus engines have made Ward's 10 Best--regarded as the benchmark in engine testing and ratings? Three, including the 3.5L V6. Audi, on the other hand, has been named on that list a total of nine times, representing five engines. BMW has been named seventeen times, representing six engines. Where is a Lexus V12 engine? What do they have to show in the form of diesel technology and development? Clearly, the engines Lexus produces are inferior to these two less "prestigious" brands.
3. Heritage: What heritage? Born in 1989, and according to Lexus designers and engineers, ADMITTEDLY a copy of Mercedes.
4. Performance brands: In Europe, and across the world, performance brands are what separate near luxury from true luxury brands, and explains Audi S, BMW M, and Mercedes AMG cars. Huge amounts of money are spent on the development, engineering, and testing of such vehicles--not to mention the costs associated with producing them. Where is Lexus' performance brand?
5. Awards: The only awards associated with Lexus are long-term quality related. Never mind engineering, driveability, performance, drive trains, interior awards, and international recognition. As was pointed out in a previous article, the difference between Lexus vehicles and the worst vehicles under JD Power & Associates 3 year quality ranking was just THREE problems. Then, there's the issue of how you even define what a PROBLEM is--is it bad cupholders, a badly placed doorhandle, or something mechanical? This study doesn't do a good enough job of differentiating between the two.
Bottom line, Lexus so-called "quality" is incredibly over rated.
6. Average transaction prices: Audi's and BMW's average transaction prices (read, more available higher priced models) trumps the Lexus average significantly. This is because while the most expensive Lexus model is a mere $72k, Audi's most expensive model is the $118k A8 W12 and BMW's most expensive model is the $119k 760Li. Not to mention numerous S and M performance vehicles.
7. Owner demographics: Both BMW and Audi boast higher percentages of college graduates with higher income than your typical Lexus buyer.
8. Parent company/acquisitions: Lexus is a subsidiary of Toyota Motor. Audi's branch under VW includes Lamborghini and VW's branch includes Bentley and Bugatti. In plain English this means that the collaboration of VW/Audi with these extremely high end makes will only mean superior engineering and technology. BMW owns Rolls-Royce and Isetta. What does Lexus have in the form of this?
Audi and BMW demonstrate clear advantages over Lexus in all of the above points, including being well respected and widely sought after in international markets. To me, these points are what make prestige vehicles, prestige vehicles, not an elaborate marketing campaign, such as the one put on by Lexus.
Go anywhere around the world, and ask what the three most prestigious mainstream luxury brands are and you'll hear: Mercedes, BMW, and Audi (if mainstream wasn't part of the question, Porsche would be included).
In any case, it shows the mind blowing ignorance of your typical American consumer, and also explains why Lexus will never gain the amount of respect internationally, that it has in the US.