Two decades after it made its modest debut, Toyota’s Lexus division is the solid volume leader in the U.S. luxury market – even though company officials routinely insist they’re not driven to be number one. Lexus has had its setbacks, however, including an unusual, third-place finish in one recent, closely-watched quality survey. What that means, and why Lexus continues to add more hybrids to its line-up were questions posed to the division’s general manager, Mark Templin, by TheDetroitBureau.com’s Bureau Chief Paul A. Eisenstein. These are “difficult times for everyone,” Templin noted.
TheDetroitBureau: When Lexus debuted, you started out with just a handful of dealers. How big has that network grown, and will you continue adding more?
Templin: Even now we have just 152 dealers with 225 outlets. That’s been our model for a long time. We don’t add dealers to increase volume, we increase outlets to service our customers better. We don’t want to over-dealer. We want our dealers to be profitable, so they can put money back into creating an exceptional customer experience. And that model has worked. If we wanted to just add volume, there are markets where we could go out and add more stores, but is that the healthiest thing for the brand? I think not.
TDB: Why not?
Templin: People say we have great products, but that’s only half the equation. The product is only part of it. The customer experience is every bit as important. You run the risk of diluting that if you go into markets that are too small to support dealers who can put money back into customer service. (more…)