With the ongoing recession every automaker has suffered a slide in sales, but the decline for Lexus has been more significant than at its German rivals with sales down 34.1 percent for the year so far. Lexus believes part of the reason is due to a reliance on up-market SUVs and the fact that the company’s buyers tend to be from an older demographic.

To fix this, executives from Toyota’s luxury arm have told Automotive News that in the future the company will look down-market to less expensive vehicles and younger buyers at higher volumes. Additionally, Lexus will put more focus on two opposing market segments: environmentally friendly cars, and performance vehicles.

The first step in this process is the new IS Convertible, followed by the HS250h dedicated hybrid. The automaker also wants to put a lot of focus back on the IS sedan. The performance issue has also been addressed as the company plans to build a 416hp IS-F Convertible.

The list of new vehicles will extend well beyond these, however, and with BMW seeing success with the 1 Series (and planning a long list of 1 Series variants), there is a strong possibility that Lexus will follow. It’s hard to imagine Lexus would ignore an entry-level crossover that would compete with the BMW X1 and the upcoming Audi Q3.

This move by Lexus is somewhat expected as it is, to a certain extent, the same brand philosophy that Toyota follows. Recently Toyota’s now-retired honorary chairman Shoichiro Toyoda blasted company executives for a dependence on large cars, trucks and SUVs, saying that Toyota should follow its traditional and successful path of small, economical vehicles. That philosophy will no doubt be enforced by the company’s new CEO and Shoichiro’s grandson, Akio Toyoda. 

[Source: Automotive News via Autoblog]

One of the last things Shoichiro Toyoda did as honorary chairman at Toyota Motor Corp., was to assemble all of the company’s executives and give them a tongue lashing. Toyoda even called out president Katsuaki Watanabe and blamed him, as well as those other executives in charge of the Japanese automaker, for leaving behind the company’s long-standing business practices to chase the quick-buck. He said they followed the lead of now-bankrupt automakers like GM and Chrysler, a path that has put the company in a serious financial bind.

While Toyota has posted significant profits for years, last year it posted a $4.5 billion loss and expects to lose even more ($5.7 billion) next year.

Toyota has always been known for building economical cars and for using a business practice called kaizen, where small improvements are constantly made to improve products and production. It is expected that Akio Toyoda (pictured above), the new Toyota president and grandson to the company’s founder, will once again begin to return the company to an economically-minded, slow growth corporation. Akio will officially take over the Toyota helm tomorrow.

Industry experts also believe that in order for Toyota to stay on top it must not only move away from luxury cars and large trucks, but it must also look outside the United States develop vehicles for emerging markets.

[Source: Bloomberg]