Lexus goes smart and electrified in unwavering pursuit of excellence

Luxury carmaker Lexus is premiering its flagship luxury MPV, the all-new LM, and is showcasing a diverse array of electrified products at the ongoing Shanghai auto show that demonstrate the brand's determination to realize electrification.

The first-generation LM, which took the lead in the segment, premiered at the Shanghai auto show four years ago. In comparison to its predecessor, the all-new LM offers two hybrid powertrain options. With high-performance hybrid technology and a new all-wheel drive system called DIRECT4, the LM 500h provides a dramatically improved ride quality.

There are four, six and seven-seat versions of the all-new LM, catering to the various needs of Chinese consumers, such as individual travel, business meetings on the move or family use.

Diversified EV lineup

At the 2023 Shanghai auto show, which runs from April 18 to 27, Lexus is presenting a range of electric vehicle models, including the RZ 450e, RZ Sport Concept and RZ Outdoor Concept, which showcase different lifestyle solutions. Additionally, the brand is showcasing the Lexus Electrified Sport, which represents the brand's vision of a future all-electric, high-performance model.

Lexus International President Takashi Watanabe made his first international appearance after his new appointment at the auto show, highlighting the brand's commitment to the Chinese market.

During his speech at the auto show, he acknowledged that the Chinese auto market, which is the world's largest, is undergoing tremendous changes, and that Lexus is faced with the challenge of better adapting to demands to secure its place in the market.

"As a trailblazer in the luxury car industry, Lexus has consistently prioritized customer satisfaction and actively listened to consumer demands," Watanabe said.

Watanabe said that he saw many cars in Shanghai with pioneering designs, advanced cockpits and a full range of smart driving features. In conversations with local dealers, he learned that almost half of the car sales in Shanghai are new energy vehicles, such as battery electric vehicles and plug-in hybrid vehicles.

This reinforced his understanding that "smart" and "electrified" have become the new focuses of customers.

The brand is committed to accelerating the development of BEVs and PHEVs while also strengthening collaborations with Chinese research and development centers and industry-leading partners.

Lexus aims to focus on smart cockpits and automated driving technology to meet the high expectations of Chinese customers, Watanabe said.

Earlier this year, Lexus launched two important models: the mid-sized BEV SUV RZ and the fully electrified RX series, ensuring that Lexus has a diverse lineup of electrified models in China.

High residual value guarantee

"Due to its high-quality cars and services, Lexus has earned high praise from customers in the Chinese market since its entry, making it one of the most valuable brands in the country," said Executive Vice-President of Lexus China Li Hui at the auto show.

In the face of fierce market competition, such as the price war in March, Lexus believes that guiding customers back to their core brand values is essential. While sales, pricing and marketing are all short-term behaviors, it is important for the brand to consider long-term value, Li said.

To this end, Lexus launched the RX and RZ models in February, along with a brand-first commitment to customers of up to 90 percent residual value for a maximum of four years.

The high residual value commitment specifically applies to the RZ model. Customers who trade their current Lexus RZ model can receive up to 90 percent of the car price in the first year, 80 percent in the second year, 70 percent in the third year and 60 percent in the fourth year, starting from the date of purchase.

For customers who trade non-Lexus brands, the residual value rate is 80 percent in the first year, 70 percent in the second year, 60 percent in the third year and 50 percent in the fourth year.

This commitment addresses consumers' concerns about residual value in the electric vehicle era and is considered to be an important step for Lexus in advancing its brand in China during the era of electrification, according to the carmaker.

According to Li, 40 percent of RZ buyers in the past two months chose Lexus due to the high residual value policy.

Lexus has been a pioneer in offering free maintenance policy for vehicles that cover 100,000 kilometers within four years and 150,000 km within six years, which has become the hallmark of the brand in the Chinese market.

The high residual value commitment represents a new chapter in the appeal of the Lexus brand, Li said.

Whether it is the free warranty and maintenance offered by Lexus or the latest high residual value commitment, the brand's unwavering pursuit of creating high-quality products and its spirit of excellence in car manufacturing are the fundamental sources for consumer confidence, Li said.