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Asian Deluxe

The East proved long ago that it could compete in the luxury car market. Now it's intent on setting the pace
Paul A. Eisenstein
From the Print Edition:
Alec Baldwin, May/June 2004

(continued from page 2)

Until now, it has been difficult for Lexus to have much of a styling theme—or indeed even much of a family resemblance among its many models. There is no Lexus brand in Japan, or at least there hasn't been until now. Its products were culled from various home-market Toyota sales channels. Now Lexus has its own board of directors, design and engineering centers, and a new Lexus sales channel is gearing up in Japan. Under L-Finesse, future Lexus products will share design cues, such as their grilles, heads and taillights—the sort of things that make a BMW instantly distinguishable from a Mercedes or Jaguar.

It's easy to miss the mark when you're aiming for Infiniti—and indeed, Nissan's luxury marque has consistently fallen short of the lofty expectations that accompanied its launch back in 1989.

The products might have been more refined had Nissan waited a bit longer before bringing the brand to market. Its early vehicles were a little rough around the edges, the result of rushing them to market so Infiniti could launch at the same time as Lexus. Nissan's financial problems compounded matters. As debt mounted product development was routinely shortchanged—something savvy luxury buyers are quick to recognize.

When chief executive officer Carlos Ghosn joined the company nearly five years ago, he proclaimed Infiniti one of his top priorities, loosening up the resources that the luxury division needed to come up with new and distinctive products. The payoff has been apparent, with Infiniti winning widespread praise for recent products such as the G35 and FX45. And that's translating into record sales. Last year, for the first time in its 14-year history, Infiniti broke through the 100,000-unit sales barrier. Though it's still moving barely half the metal of top-tier luxury nameplates, the six-figure sales figure was a psychologically significant achievement for the Asian automaker.

As with Lexus, Infiniti's challenge is to find its own raison d,être. "Infiniti has to stand for something," Mark Igo, the automaker's vice president and general manager, conceded during the preview of the QX56 in Maui. "We're in a very different place from where we were a couple years ago. Our brand has evolved…and our plan is not to copy what others are doing."

The company's true test will come with the replacement of Infiniti's flagship Q45 sedan. It's easy to lose the current model in a crowded parking lot, acknowledges Patrick Pelata, an executive vice president and the Nissan board member in charge of corporate planning and strategy. What comes next "has to be distinctive and expressive…a dream car" that potential buyers will aspire to.

For the first time in years, that seems entirely possible, but it's clear there's a lot of work ahead if Infiniti hopes to play in the same league as its high-volume rivals, Lexus, Mercedes-Benz and BMW.

It's been nearly two decades since Acura proved the Japanese could build a luxury car. But during the ,90s, the Honda division lost much of its sizzle. Though it outsold Infiniti last year, Acura is mired in fifth place in the luxury sales sweepstakes. Other metrics are equally grim. The Acura badge slipped from fourth to tenth last year in the Total Value Index compiled by the market research firm Strategic Vision. That's a measure of the value owners place on their vehicles.

"We lost our way, quite honestly," acknowledges Robert Bienenfeld, Acura's senior manager for product planning. There are plenty of examples of where it went off course. The automaker ignored market trends and was slow to move its original Legend model upscale. When Honda finally responded, it abandoned the well-known nameplate, adopting a series of alpha designations, such as CL, TL and RL, that were essentially impossible to decipher without a press kit.

"They muddied things…and just don't have a clear identity," says Daniel Gorrell, a vice president at Strategic Vision. The situation only worsened, added Gorrell, when models that followed the Legend were little more than rebadged Hondas. The TSX, for example, is a clone of the Honda Accord—though in this case, it's based on a European version not sold in the United States.

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