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

Audi Teams up with Renovo Design to Create Wooden Frame Bicycles

Audi is joining a long line of car manufacturers that have reached out to bicycle specialists to create their own range of two wheelers. Being that the brand with the four rings is renowned for the use of aluminum in its cars, you’d expect Audi to employ the lightweight metal on its bicycle series. But that’s not the case as the Ingolstadt automaker teamed up with Renovo Design, a firm famous for its wooden frame bikes.

The all-new Duo bicycle from Audi sports a monocoque frame made of hardwood. According to the automaker, wood offers “the smoothest ride of any bike frame material thanks to its superior ability to absorb shock and vibration”. Audi says that the weight per cubic inch of wood is about one-fourth the weight of aluminum, meaning that the duo is lighter than most bicycle frames, adding that it also offers "equal or superior stiffness, durability, and toughness to an aluminum frame".

Other highlights of the Audi Duo bicycle series include a belt drive, aluminum and carbon fiber components, disk brakes and LED lighting, as well as woods selected to match the look of Audi vehicle interiors.

The series comprises of three bikes, the Duo City, Duo Sport and Duo Road, all of which are hand-made at Renovo’s Portland, Ore., studio. As you'd expect, none come in cheap as pricing for the three models (including shipping & handling) are set at $6,530, $7,350 and $7,460 respectively.

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Five-Millionth Audi A4 Rolls off the Production Line in Inglostant

Audi's Ingolstadt plant produced on Wednesday the five-millionth A4 model, an Avant station wagon painted in Misano Red. The brand with the four rings started production of the A4 in Ingolstadt in 1994 and since 2007, it has also been building it at Neckarsulm. The A4 Sedan, A4 Avant, A4 allroad quattro, S4 Sedan and S4 Avant are manufactured in Ingolstadt, while the A4 Sedan is built in Neckarsulm in both plants. The A4 range takes up a high proportion of the Ingolstadt and Neckarsulm plants' production capacity.

“This is another major milestone in Audi’s history,” said Frank Dreves, management board member for production at Audi AG. “All versions of the A4 are efficient, elegant and enjoy outstanding success in their class. Our highly motivated team and our effective Audi production system will keep this model on course for continued success in the future.”

The current A4 is the fourth generation model and it has been on sale since 2008. Audi also uses the same platform to build the A5 Coupes, Cabriolet and Sportback models, plus the Q5 compact SUV.

“The success of the entire A4 model family keeps our two main production plants fully occupied and safeguards the workforce’s jobs,” said Peter Mosch, chairman of the general works council. “Audi owes this success to its employees, who have invested so much know-how, quality awareness and dedicated work in the A4,” he added.

By Dan Mihalascu

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Two Years the Wiser: Marouane Bembli Retackles his Audi R10 Design Study

Back in November of 2009, then 23yo Swedish industrial design student Marouane Bembli brought us an impressive design study for a proposed halo model for Audi to sit above the R8. With its sharp lines, centralized cockpit and Rolls-Royce Phantom rivalling proportions, the R10 was a pretty if unlikely proposal for a next generation Audi supercar.

Now, two years older and presumably a little wiser, Bembli has once again tackled the R10 in what I call the R10 v2.0. Though the concept of a low roofed, widebody coupe with a mid-mounted V10 remains the same, Bembli’s new-for-2011 R10 features a more aggressive front-end treatment, larger rear view mirrors and cabin windows and the addition of fighter jet-inspire side intakes.

It’s a more cohesive design overall, though I’m not sure about the curved bootlid or small, high-mounted taillights are exactly to my taste. With a bit more work, Bembli’s R10 v2.0 could be a real looker, though for now those rear proportions just don’t sit right with my untrained eye. To each his own, however, and we’re eager to hear what our readers think of this latest design proposal.

So what’s the verdict? Better or worse than the 2009 proposal? What do you like or not like about Bembli’s latest creation? Let us know in the comments section below.

By Tristan Hankins

Designer: Marouane Bembli

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STaSIS Engineering Launches 710HP Audi R8 V10 in the UK

North American aftermarket specialist STaSIS Engineering has introduced its Challenge Extreme Edition package for the Audi R8 V10 to Britain. Available in the US since 2010, the performance kit includes powertrain, suspension and brake upgrades that transform the R8 V10 into an even more ferocious supercar, capable of accelerating from 0 to 100 km/h [62mph] in 3.1 seconds, 0.6 seconds faster than the stock model.

The engine has been fitted with an Eaton/Magnusson TVS 2300 supercharger that elevates power to 710HP (35 percent more than the standard model) and peak torque to 710 Nm (523 lb-ft). Other engine modifications involve the intercooler, the intake system and the ECU.

STaSIS engineers also upgraded the exhaust system (welded stainless steel) and the brakes (390 mm front / 355 mm rear with two piece floating discs). As for the suspension, STaSIS equipped the R8 with lowering springs to improve handling while also offering a more aggressive stance to the car.

Styling modifications are limited to a set of 20-inch ultra-lightweight alloy wheels. The Challenge Extreme Edition package for the Audi R8 V10 is available through the APS of Brackley distributor for £45,000 (€51,000/$71,800), with VAT and fitting included.

By Dan Mihalascu

PHOTO GALLERY

VIDEO: A Wonderful Road Trip through Brazil in an Audi R8 Spyder V10

Truth to be said, any journey would be a blast if you were behind the wheel of sports car like the Audi R8 Spyder V10, but we can’t help but applaud the brand with the four rings for this beautiful, 2-minute long clip filmed in remote, untouristy parts of Brazil. Sit back, turn up the volume and enjoy the ride in the video right after the break.

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Audi: 38 Percent of all Models Sold in 2010 were Equipped with Quattro Drive

In 2010, the year that Audi celebrated the 30th anniversary of the quattro, it sold an impressive 437,792 quattro-equipped cars, or about 38 percent of its total production. The brand with the four rings said it sells more all-wheel drive vehicles than any other premium manufacturer in the world.

The most popular all-wheel drive Audi was the Q5 compact SUV, with 155,025 sales. The German company will soon add a hybrid version to the Q5 range, while a smaller SUV, the Q3, is due to be launched next month at the Shanghai Auto Show.

Aside from the Q5 and Q7 SUVs, the quattro system was also a popular choice among other models, ranging from the A3 to the A8. According to Audi, almost a quarter of all “A” series model sales in 2010 were vehicles equipped with four-wheel-drive,

“Quattro is one of the Audi brand’s greatest success stories, and today we are writing what may well be its most exciting chapter,” says Peter Schwarzenbauer, Audi board of management member. “As we move down the road toward electric mobility, we see entirely new possibilities for Quattro technology. The electric quattro of the future will be even more agile, safer and – above all – more efficient,” adds the executive.

Audi offers more than 130 quattro model variants if you take into account the different body types, engines and transmission options. The most advanced version of the quattro system, available in the RS5, A7 Sportback and the new A6, features a crown-gear center differential and torque vectoring.

By Dan Mihalascu

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