Lexus LFA: Strategic or Stupid?

Lexus is the luxury vehicle division of Toyota, a Japanese manufacturer and one of the biggest in the world. At the end of 2010 Lexus planned to go ahead with the production of the LFA, the first supercar ever produced by them, after 9 years in development.

I first learned about the LFA on an episode of Top Gear2. Given my interest in supercars I was immediately drawn to the technical quality, design, and performance of the LFA. There's no doubt that it is an amazing feat of engineering. Numbers don't mean much, even less to those who don't understand car specs, without context. To better understand how good the LFA is it should be compared to other supercars from around the world (who's makers should be recognizable, even to non car nuts).

Of course at this price range potential owners aren't concerned with mere hundreds of thousands of dollars. Anyone in a position to spend $12,000 a month to lease the LFA is probably not strapped for cash. To them it is about the technology and the image the car portrays.

And that brings me to the obvious fact that this car, this nearly $400,000 car, is a Lexus. There's no hiding the fact that it's a car made by Toyota. Even if Lexus was in no way connected with Toyota, their own image is nothing to be proud of. Lexus vehicles have always been meticulously crafted, luxurious, and high tech. To me, they also have one other strong characteristic: boring. Nothing about Lexus has ever jumped out at me and nothing about the brand adds appeal to its vehicles.

That is until the LFA. Everything about the LFA is powerful and different, yet the brand behind it spoils the overall appeal of the car. It simply doesn't feel right to drive a $375,000 Lexus.

I got to thinking about the different ways Lexus could realign itself as a manufacturer more worthy of a $375,000 priced car. A company who's name belongs in the same sentance as Ferrari and Aston Martin. Changing the perception of Lexus would take a long time and undoubtly fail in many peoples' minds.

But maybe Lexus is already changing the perception of their brand. They are strategically pricing the LFA so astronomically high that it creates a sense of eliteness around the car.

Or perhaps it was other factors like production costs that controlled the price. In which case Lexus would be stupid to play with millions of dollars to develop an overpriced car that might not sell.

Intentional or not, the price is contributing to the brand's image. Before the LFA came along I had never really considered price as a tool for branding. Used carefully, pricing of a product can greatly change its percieved value. One particular company based in Cupertino has been doing this for years.