Why Lexus Lags Behinds its German Rivals in China’s Luxury Market


For the past eleven years, Lexus has been Numero Uno in U.S. luxury vehicle sales. Not so in China, where Germanic giants BMW, Mercedes-Benz and Audi lead the pack and Lexus is relegated to a paltry fourth.

One issue is customer service, or rather a level of customer service that fails to differentiate Lexus from its competitors. As business owner and Lexus customer Maggie Lin explains: “Nothing stands out from Lexus's service. I don't feel there's anything special compared with what Audi has been doing. They are more or less the same.”

It’s one of the reasons Lexus’s Chinese arm has sent two of its top managers to the United States to learn how things are done at the brand’s North American operation. According to J.D. Power, Lexus sold just a fifth of market leader Audi’s sales total for 2010. That’s just 49,000 vehicles to the latter’s 236,000. There’s also the issue of consumer tastes.

Takeshi Uchiyamada, Toyota’s Executive VP for Research and Product Development explains: “Consumer needs are not all the same in each market. In China, within the Lexus lineup we're introducing smaller-engine cars favored by Chinese customers.”

It’s one of the reasons Lexus is bringing the IS 250 sedan and convertible plus the CT 200h hybrid to the Chinese market instead of the big V6 engined sedans and SUV favoured by Lexus’ U.S. customers.

Another problem is Lexus’ reluctance to open a plant in China, unlike its German competitors. The Japanese sourced Lexuses (Lexi?) incur a 25% custom duty and 17% VAT, on top of the recommended retail price and the Chinese government’s engine-size based consumption tax which can be as much as 40%.

This puts them out of the range of the younger (well, younger than dead) buyers the brand so richly needs. John Zeng of J.D. Power explains:

“Toyota insists on producing Lexus in Japan, but if you want to achieve the volume of your competitors, you have to follow your competitors' strategy. BMW, Audi, Mercedes—they are all focused on localizing production of their models.”

Lexus is hesitant to open plants in China over concerns of the quality of Chinese manufacturing and the potential theft of intellectual property. The brand was also a latecomer to the Chinese market, its first dealership having opened in 2005 after twelve years of imports. Compare this to Audi, which has been the favored brand of Chinese bureaucrats since its introduction to the Chinese market in 1985.

Only time will tell if Lexus can make it as big in China as it has in the U.S., or whether it will remain one of the also-rans in the nation’s burgeoning luxury car market.

By Tristan Hankins

Source: Businessweek




BMW’s Awesome M3 Pickup Truck Packs 420HP and Close to 1,000 Pounds Load Capacity


Say hello to the automotive industry’s most expensive and elaborate April Fool’s Joke; the BMW M3 Pickup Truck. While other makers turn to photoshops, the Bavarian firm went ahead and developed an actual car, going as far as testing it on the Nurburgring race track.

The sport ute packs the same 420-horsepower 4.0-liter V8 engine under the bonnet as the rest of the M3 range, which includes the Coupe, Convertible and Sedan models, adding a rear-axle load capacity of up to 450 kilos or 992 pounds.

The load bed itself is clad in high-grade structured aluminium sheeting and provides the biggest cargo capacity ever offered on a M vehicle – up to 20 standard 46-inch golf bags, according to BMW. It’s also the first M3 to be equipped with a trailer tow hitch.

BMW said the kerb weight of the pickup undercuts that of the M3 Convertible by around 50 kilograms or 110 pounds. Interestingly, BMW’s designers also fitted the M3 Pickup Truck with a Targa top, which shaves another 20kg or 44 pounds and at the same time, lowers the car’s centre of gravity when removed.

Despite the removal of the rear passenger compartment, the company says measurements in the wind tunnel at the BMW Group’s Aerodynamic Test Centre showed a Cd factor on a par with that of the BMW M3 CoupĂ©.

Official lap times have not yet been released, but BMW pointed out that the needle in the dial vouched for a top speed of 300 km/h or 186mph.

Of course, the M3 Pickup Truck won’t be heading for production, but BMW said the one-off model is earmarked for use as a workshop transport vehicle for BMW M GmbH.


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A Quick History of the BMW 3-Series, from 1975 to Today


In 1975, BMW launched the 3-Series as a successor to the 02 series and essentially established the premium compact car segment. The company went on to produce five generation of the 3-Series selling more than 12 million cars worldwide. Even though it changed considerably from one generation to another, the 3-Series kept its core characteristics: a compact body with a classic design, rear-wheel drive, sporty handling characteristics and potent engines.

Launched initially as a two-door coupe, the 3-Series gained throughout the years new body variants such as the sedan, station wagon, coupe, convertible and even a three-door hatchback model (Compact). Scroll down to read a brief history on each generation.


1975: The first generation - E21

Available exclusively as a two-door model, the first 3-Series was compact in dimensions measuring 4,355mm in length, 1,610 in width, and 1,380 mm in height. It was the first BMW to feature a center console inclined towards the driver, a detail that would become a typical characteristic for BMWs over the years.

The first 3-Series cane with a McPherson front axle and an independent wheel suspension on trailing arms and spring struts at the rear. It was initially powered by four-cylinder engines with a displacement of 1,573, 1,766 and 1,990 cc. The model designations were 316, 318, 320 and 320i, the latter reserved for a fuel-injected variant of the 2.0-liter unit. Interestingly, the 316 and 318 models were fitted with single headlights, while the 320 and 320i featured double headlights on each side.

In 1977, BMW launched the first six-cylinder engine of the segment on the 323i, which was the most powerful model of the range with 143 horsepower and a top speed of 190 km/h (118 mph). By 1981, the E21 3-Series celebrated its first millionth vehicle.


1982: The second generation – E30

One of the most popular 3-Series, the E30 featured a new design with optimized aerodynamics, a more spacious interior, more powerful engines and new body types. A year after its launch, the E30 spawned a four-door sedan version, with the convertible and the first M3 to arrive in 1985. A touring version was added to the lineup in 1987.

Other highlights of this generation were the first diesel (324d), the first four-wheel-drive model (325iX), the first engine with four valves per cylinder (318is) and the first 3-Series equipped with a catalytic converter (325e). The E30 sold more than 2.3 million units, exceeding the E21's sales by a million.


1990: The third generation – E36

Launched as a four-door sedan, the E36 marked a bigger leap forward, being significantly larger and more spacious while also introducing the Z-Axle Multilink rear suspension that hugely improved handling. A two-door coupe was unveiled in 1992, with the convertible and the new M3 following shortly after.

For the first time, the M3 was available as a four-door sedan. In 1994, the E-36 inaugurated the 3-Series Compact, a shorter, three-door hatchback version measuring 4,21 meters long. Other important milestones were the introduction of the VANOS variable camshaft control system lowering fuel consumption and emissions while enhancing the torque curve, the turbocharged six-cylinder diesel engine in the 325tds and the first four-cylinder turbo diesel (318tds).


1998: The fourth generation – E46

The E46 was even larger, more powerful, more comfortable and safer than the E36. It featured BMW's first direct injection diesel engine (320d), the first petrol engine with two balance shafts (318i) and the introduction of double VANOS on six-cylinder petrol units. Common Rail injection was implemented to the six-cylinder diesel engine as well (330d) and in 2001 BMW introduced the Valvetronic system on its petrol units. This technology increased power output and lowered fuel consumption and emissions.

The E46 also inaugurated a new four-wheel drive system, called xDrive, which operated without conventional locking and featured a fully flexible distribution of power between the front and rear drive wheels. The fourth generation 3-Series also marked the debut of the diesel engine on the coupe and convertible models. The M3 was available only as a coupe and convertible. The E46 Compact model was replaced by the 1-Series in 2004.


2005: The fifth and current generation – E90

The Bangle-era E90 featured a distinctive design, although not that controversial as its contemporary 7-Series. BMW put a greater emphasis on fuel consumption and emissions by developing the High Precision Injection technology for all its petrol engines and the EfficientDynamics package for the 2.0-liter diesel unit. The BMW 320d EfficientDynamics Edition proves to be the most efficient medium-class car, with an average fuel consumption of 4,1 liters/100 km (57.36 mpg US) and CO2 emissions of just 109 g/km.

The E90 also marked the introduction of the third generation Common Rail direct injection and the brake energy regeneration system. The four-cylinder models with a manual gearbox are fitted as standard with an Auto Start Stop function. After a single generation pause, the M3 is once again offered with a sedan body with power coming from a V8-engine for the first time.


2012: The sixth generation – F30

Scheduled to be unveiled at the Frankfurt Motor Show this autumn, the new 3-Series will adopt a similar styling to the latest 5- and 7-Series models. It is expected that BMW will introduce a range of turbocharged four-cylinder gasoline units with up to 230HP and turbocharged six-cylinder engines, all equipped with start-stop technology.

The F30 M3 might not have a V8-engine anymore, as BMW is rumored to return to a straight-six unit with twin turbocharging and direct injection. Aside from the sedan, touring, coupe and convertible body styles, the 3-Series is also expected to receive a crossover GT version.

By Dan Mihalascu


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