90 Lexus Stores Plan $500 Million in Upgrades

Ninety of the nation's 200 Lexus dealers will spend $500 million on facility upgrades this year and next.

So says Dennis E. Clements, group vice president and general manager of Toyota's Lexus Division. He credits the investments as examples of the warm relations the Japanese luxury division has with its U. S. retailers.

Lexus dealers, most of whom have other franchises, “do things for us they wouldn't do for others,” Clements tells the Automotive Press Association in Detroit.

He adds, “Everyone in the industry says they work with dealers, but none has a model like Lexus.”

That model essentially is the customer first, the dealer second and the auto maker third.

Accordingly, Clements says Lexus makes sure its dealers and dealership sales personnel are adequately rewarded for their efforts, especially in customer satisfaction, an area where Lexus dealers reign supreme on surveys.

“We want customers completely satisfied,” he says. “For that to happen, we need our dealer to make a profit because profitability breeds more customer satisfaction.”

Clements says he's “forsaken” sales to make sure demand exceeds supply.

“Although some of our competitors play heavily in the incentive game, we don't think that's consistent with an aspirational brand,” he says.

The industry's average vehicle days' supply is 50-60. For Lexus, it's 20.

Clements sees more good times ahead for Lexus in particular and the luxury car market in general.

“We see the market climbing nearly 24% by 2005,” he says.