How a recall earned Lexus a top reputation
03-30-2006, 06:39 AM
#1
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How a recall earned Lexus a top reputation
Sending a message from the top
The year was 1987 and the domestic automakers had finally resigned themselves to the fact that the Japanese were here to stay. What began as a trend in California and was perceived as consumers' knee-jerk response to the gasoline shortages of the '70s had taken root across the country. To the domestic automakers' dismay, even after gas prices stabilized, cars such as the Honda Civic and Toyota Corolla continued to gain share not only on the West Coast, but also in small Midwestern towns that traditionally bought American.
Although the loss of share was daunting, the domestic automakers believed their problem was self-limiting. "Okay," they thought, "Americans may have fallen in love with small economy cars from Japan, but the Japanese will never be able to sell a large car in this country." And this was a comforting thought, because small cars were a loss leader for domestic automakers. Their real profits came from the larger, option-laden vehicles, which they felt were immune from Japanese attack. And so the executives from the Big Three went to bed at night content that although they may be losing the battle for small cars, they would still win the war for corporate profits and market dominance in the end.
Halfway across the globe, executives at the European automakers were even less concerned about America's growing acceptance of Japanese vehicles. After all, with the exception of Volkswagen, the Europeans didn't even sell small cars in America. They didn't even sell large cars, for that matter. They sold luxury vehicles. And a luxury vehicle isn't just defined by its size; it exists because of its brand cachet -- something that no Japanese automaker could deliver, or so they thought.
So you can only imagine the reaction on both sides of the pond when, on August 24, 1987, Toyota announced the unthinkable. It would create Lexus, an entirely new division dedicated to building and selling what they said would be the best luxury vehicles in the world. You could almost hear the laughter filtering down from corporate towers in Detroit and Stuttgart, "An office worker may pay $10,000 for a Toyota to get back and forth to work, but there is no way a doctor or a lawyer is going to plunk down $40,000 for a Toyota, even if you give it a fancy name like Lexus."
Toyota was undaunted. It set out to redefine luxury beyond the traditional attributes of leather trim and a powerful engine. To Lexus, luxury would be defined by the total ownership experience, including a defect-free vehicle coupled with great dealer service.
Development progressed quickly, and in September 1989 Lexus delivered its first vehicles into the waiting hands of customers. Its flagship vehicle, the LS 400, carried a list price of just under $40,000. By comparison, a fully loaded Mercedes S-Type sold for nearly twice that amount. That's okay, Mercedes thought; Lexus needs that price advantage to make up for the stigma of driving a glorified Toyota.
Small glitch
The cars sold well initially, but a few months into the program the one thing happened that Lexus feared most, and that executives at competing car companies secretly dreamed: the cars began to experience a problem. We're not talking about a stuck-on-the-freeway type of problem, but just a little crack in the armor that Lexus knew could snowball into a deluge of bad press for a company trying to establish itself under the eye of a microscope. It seems that two customers in different parts of the country complained about a glitch in their cruise control.
Lexus faced a decision. After all, it was only two cars, and thankfully this particular cruise control glitch didn't pose a safety issue. It could quietly fix those two cars and wait to see whether others surfaced with similar problems. Or it could issue a recall and let the world know that Lexus engineers were human after all. To those we interviewed for this book, the decision was simple. Since Lexus was counting on its dealers to deliver a level of service head and shoulders above that of any other automotive brand, Lexus needed to take the high road and set an example, one that is still talked about among automotive insiders today.
Big fix
So, just a few months out of the gate, Lexus recalled every LS 400 it had sold. They made this decision knowing full well that competitors like Mercedes, BMW, and GM were just waiting for the company to stumble, ready to pounce on every miscue. They could almost hear the cheering from Stuttgart and Detroit at the misfortune of this early recall. They knew competitors would use the recall to proclaim that Japanese automakers need to learn their place, stick to selling small economy cars, and let the more established manufacturers cater to the world's automotive elite.
But remember, Lexus set out from the beginning to redefine the meaning of luxury. They realized that this recall provided them with an opportunity to really show the world that they were dealing with an entirely new kind of car company, a company that didn't just talk customer satisfaction, it lived it. So, when Lexus owners received their recall notices, they were in for a surprise. The notices not only included a detailed apology letter, but owners were advised that their dealer would come to their homes, pick up the car, and leave them a loaner car free of charge while the repair was made. Every car was returned to the owner washed, detailed, and with a full tank of gas.
There was even a gift sitting on the driver's seat as thanks for their patience.
And when a customer lived beyond the normal range of a Lexus dealership, the company's field personnel took it upon themselves to drive to the home, break out their tools, and fix the problem right there in the customer's own garage. In at least one case this meant getting on a plane and flying a technician to Alaska to fix a customer's car, because Lexus didn't yet have any dealers outside the continental United States.
For all practical purposes, we believe this recall marked the day that Lexus was truly born, and not the day it sold its first car. This is because the recall was the day that Lexus showed the world what it really meant to be customer-focused.
Putting teeth in the platitudes
Lexus's...
Continued:http://www.autonews.com/apps/pbcs.dl.../60322012/1003
The year was 1987 and the domestic automakers had finally resigned themselves to the fact that the Japanese were here to stay. What began as a trend in California and was perceived as consumers' knee-jerk response to the gasoline shortages of the '70s had taken root across the country. To the domestic automakers' dismay, even after gas prices stabilized, cars such as the Honda Civic and Toyota Corolla continued to gain share not only on the West Coast, but also in small Midwestern towns that traditionally bought American.
Although the loss of share was daunting, the domestic automakers believed their problem was self-limiting. "Okay," they thought, "Americans may have fallen in love with small economy cars from Japan, but the Japanese will never be able to sell a large car in this country." And this was a comforting thought, because small cars were a loss leader for domestic automakers. Their real profits came from the larger, option-laden vehicles, which they felt were immune from Japanese attack. And so the executives from the Big Three went to bed at night content that although they may be losing the battle for small cars, they would still win the war for corporate profits and market dominance in the end.
Halfway across the globe, executives at the European automakers were even less concerned about America's growing acceptance of Japanese vehicles. After all, with the exception of Volkswagen, the Europeans didn't even sell small cars in America. They didn't even sell large cars, for that matter. They sold luxury vehicles. And a luxury vehicle isn't just defined by its size; it exists because of its brand cachet -- something that no Japanese automaker could deliver, or so they thought.
So you can only imagine the reaction on both sides of the pond when, on August 24, 1987, Toyota announced the unthinkable. It would create Lexus, an entirely new division dedicated to building and selling what they said would be the best luxury vehicles in the world. You could almost hear the laughter filtering down from corporate towers in Detroit and Stuttgart, "An office worker may pay $10,000 for a Toyota to get back and forth to work, but there is no way a doctor or a lawyer is going to plunk down $40,000 for a Toyota, even if you give it a fancy name like Lexus."
Toyota was undaunted. It set out to redefine luxury beyond the traditional attributes of leather trim and a powerful engine. To Lexus, luxury would be defined by the total ownership experience, including a defect-free vehicle coupled with great dealer service.
Development progressed quickly, and in September 1989 Lexus delivered its first vehicles into the waiting hands of customers. Its flagship vehicle, the LS 400, carried a list price of just under $40,000. By comparison, a fully loaded Mercedes S-Type sold for nearly twice that amount. That's okay, Mercedes thought; Lexus needs that price advantage to make up for the stigma of driving a glorified Toyota.
Small glitch
The cars sold well initially, but a few months into the program the one thing happened that Lexus feared most, and that executives at competing car companies secretly dreamed: the cars began to experience a problem. We're not talking about a stuck-on-the-freeway type of problem, but just a little crack in the armor that Lexus knew could snowball into a deluge of bad press for a company trying to establish itself under the eye of a microscope. It seems that two customers in different parts of the country complained about a glitch in their cruise control.
Lexus faced a decision. After all, it was only two cars, and thankfully this particular cruise control glitch didn't pose a safety issue. It could quietly fix those two cars and wait to see whether others surfaced with similar problems. Or it could issue a recall and let the world know that Lexus engineers were human after all. To those we interviewed for this book, the decision was simple. Since Lexus was counting on its dealers to deliver a level of service head and shoulders above that of any other automotive brand, Lexus needed to take the high road and set an example, one that is still talked about among automotive insiders today.
Big fix
So, just a few months out of the gate, Lexus recalled every LS 400 it had sold. They made this decision knowing full well that competitors like Mercedes, BMW, and GM were just waiting for the company to stumble, ready to pounce on every miscue. They could almost hear the cheering from Stuttgart and Detroit at the misfortune of this early recall. They knew competitors would use the recall to proclaim that Japanese automakers need to learn their place, stick to selling small economy cars, and let the more established manufacturers cater to the world's automotive elite.
But remember, Lexus set out from the beginning to redefine the meaning of luxury. They realized that this recall provided them with an opportunity to really show the world that they were dealing with an entirely new kind of car company, a company that didn't just talk customer satisfaction, it lived it. So, when Lexus owners received their recall notices, they were in for a surprise. The notices not only included a detailed apology letter, but owners were advised that their dealer would come to their homes, pick up the car, and leave them a loaner car free of charge while the repair was made. Every car was returned to the owner washed, detailed, and with a full tank of gas.
There was even a gift sitting on the driver's seat as thanks for their patience.
And when a customer lived beyond the normal range of a Lexus dealership, the company's field personnel took it upon themselves to drive to the home, break out their tools, and fix the problem right there in the customer's own garage. In at least one case this meant getting on a plane and flying a technician to Alaska to fix a customer's car, because Lexus didn't yet have any dealers outside the continental United States.
For all practical purposes, we believe this recall marked the day that Lexus was truly born, and not the day it sold its first car. This is because the recall was the day that Lexus showed the world what it really meant to be customer-focused.
Putting teeth in the platitudes
Lexus's...
Continued:http://www.autonews.com/apps/pbcs.dl.../60322012/1003
03-30-2006, 06:43 AM
#2
Thread Starter
As an aside, my wife bought a pre-owned '01 IS300 that she drives regularly. It was certified to 100k miles and she gets a RX300 loaner every time it's in for service. Absolutely superb quality and customer service.
I know there are probably better SUV's out there, but I'm going to be hardpressed not to put my wife in an RX350 when we get her another car in a year or two. The overall experience is just too good.
I know there are probably better SUV's out there, but I'm going to be hardpressed not to put my wife in an RX350 when we get her another car in a year or two. The overall experience is just too good.
03-30-2006, 07:01 AM
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The loaners at Lexus aren't crap. They're either the RX or the GS down here. My brother and dad both own Lexi (plural?) and they wouldn't have it any other way.
I didn't even get loaners at my BMW dealership because I worked so close to it. They would give me a ride in a big white van along with everyone else that worked close by.
I didn't even get loaners at my BMW dealership because I worked so close to it. They would give me a ride in a big white van along with everyone else that worked close by.
03-30-2006, 08:45 AM
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Saturn had a similar story when they were new. Something about a fluid problem with the transmission. Too bad, unlike Lexus, the Saturn car was just so-so. The service was(is?) top notch.
03-30-2006, 09:05 AM
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One time I brought my LX470 for warranty repair without an appointment. Both relay panels shorted and instrament beeping would not stop. They did not refused my service. They could not get me a loaner without an appointment, but they did one better. They got a shuttle driver shuffer me between work and back.
I miss my LX470 and the service (but not the mpg or Lexus service price though).
I will eventually get back into Lexus. Already thinking about the GS450h hybrid. But will wait and see what else is coming out in a few years first.
I miss my LX470 and the service (but not the mpg or Lexus service price though).
I will eventually get back into Lexus. Already thinking about the GS450h hybrid. But will wait and see what else is coming out in a few years first.
03-30-2006, 09:59 AM
#7
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I never owned a Lexus, but will soon. All I hear is how well you get treated and its as good as a car buying/owning experience can be. However (not the same for all states).....I did bring my friends series of BMWs (528,540, M3, M3) for random crap..and i think twice we had a loaner (325). All the other times, they paid for the cheapest car you can get at Enterprise. Not only that, their service department is full of a$$holes.
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03-30-2006, 10:44 AM
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well, heres a cut that I posted from the Lexus forums on Tuesday:
No matter what you buy.. you still gotta deal with crappy dealers:
___________
People probably don
No matter what you buy.. you still gotta deal with crappy dealers:
___________
People probably don
03-30-2006, 10:51 AM
#9
Thread Starter
y2ks2k,
Even Lexus dealerships are run by humans. There is a bad apple (or several) in every business, including Lexus and other companies with stellar reputations.
I bet this guy eventually gets something good from Lexus Corporate, like free oil changes for 5 years or an extended warranty or something.
Even Lexus dealerships are run by humans. There is a bad apple (or several) in every business, including Lexus and other companies with stellar reputations.
I bet this guy eventually gets something good from Lexus Corporate, like free oil changes for 5 years or an extended warranty or something.
03-30-2006, 01:09 PM
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Originally Posted by QUIKAG,Mar 30 2006, 11:51 AM
y2ks2k,
Even Lexus dealerships are run by humans. There is a bad apple (or several) in every business, including Lexus and other companies with stellar reputations.
I bet this guy eventually gets something good from Lexus Corporate, like free oil changes for 5 years or an extended warranty or something.
Even Lexus dealerships are run by humans. There is a bad apple (or several) in every business, including Lexus and other companies with stellar reputations.
I bet this guy eventually gets something good from Lexus Corporate, like free oil changes for 5 years or an extended warranty or something.