Lexus ES to be phased out? You’ve got to be kidding…

Lexus-ES300h-hybrid

Among this author’s many oddball geeky/nerdy automotive interests is following Motor Trend magazine’s annual Power List of the “Top 50 movers, shakers, heart-breakers in the mercurial world of autodom”, as they described it in 2008. This ritual goes back further than that, though, having started in 2005, and has been compiled by Todd Lassa since 2010.

Its latest 2013 iteration reminds us that “steady is the new up”, with less changes in the ranks and listings than at any time in recent memory. Yet, one of the handful of exceptions to that rule is Toyota Motor Company’s President and Chief Executive Officer Akio Toyoda, who rises from the #26 position in 2012 all the way to #3 this year, and is, in Lassa’s words, gunning for first. His passionate approach includes kudos for the successful Scion FR-S launch and for his cheerleading efforts in ensuring that nonsport models such as the Lexus GS and Toyota Avalon have a personality, as well as spearheading the company’s return to Le Mans and the FIA World Endurance Championship.

Also appearing on the list is Bob Carter, rising from #45 in 2012 to #34 this year, chiefly on the strength of his promotion last April to Toyota Motor Sales USA’s Automotive Operations Senior Vice President, a position that includes responsibilities for Scion and Lexus as well. Fortunately, Lassa affirms that, like corporate chief and scion Toyoda, Carter personally prefers sporty cars over Camrys, and goes on to suggest that Carter may become Toyota’s next American board member, an honor that other pundits have suggested for Senior Managing Officer of Toyota Motor Corporation and Chairman of Toyota Motor Manufacturing Canada Réal “Ray” Tanguay.

The third Toyota official on the 2013 list, and marking his first appearance in the #45 position is Lexus Product Marketing Planning Division General Manager Mark Templin. Talk of his “unenviably tough job assignment” and goals of growing Lexus outside North America, however, were overshadowed by the jaw-dropping suggestion that Lexus’s aims included “Phasing out best-selling ES. Let Toyota Avalon have the segment”.

So, was Todd Lassa (who also serves as Automobile magazine’s Executive Editor) merely playing armchair product planner and expressing a wish for a more enthusiast-friendly lineup of Lexus sedans? Or is Lexus planning to follow the current Mercedes-Benz and future BMW playbook of using rear-wheel-drive platforms for D-segment and larger models and front-wheel-drive platforms for C-segment and smaller vehicles going forward? This author reached out to Mr. Lassa and received the following reply:

The statement about RWD does NOT come from Mark Templin. Several sources have told me that Toyota will satisfy the Lexus ES market with the Avalon.

Interesting, and something this author has decidedly mixed feelings about. As implied above, going with rear-wheel-drive-centric mid-sized and larger models (with all-wheel-drive options for snowy climes) would cement Lexus’ status as a worthy Mercedes-Benz and BMW rival with an equal emphasis on handling and driving dynamics. On paper, this makes the front-wheel-drive ES an out-of-place throwback that is saddled with a reputation as a dull-to-drive, old folks’ retirement community conveyance. By the time the Lexus ES’s 5th-generation was launched in February 2006, it was a model built but unavailable for sale in its native Japan, and sold only in North America and a handful of Asian and Middle East markets. Its newfound success in China (where, at one point, it was the 4th-best-selling luxury sedan) was thwarted by Sino/Japanese tensions over the Diaoyu/Senkaku islands that sent all Japanese car sales in China plummeting just as the new 6th-generation ES made its move to the larger Toyota Avalon base – primarily to satisfy China’s longing for maximum rear-seat legroom in a luxury segment whose vehicles are usually chauffeur-driven.

In a way, though, it would be a shame if the ES goes away, for its newest iteration, arguably, wears the cleanest, most attractive and least overwrought take on Lexus’ new spindle grille and design language, and this author was quite pleasantly surprised by its driving manners and handling. Then again, similar kudos have been expressed over the new 4th-generation (XX40) Toyota Avalon which shares its underpinnings with the newest ES. And we’ll certainly admit that a top-of-the-line 2013 Toyota Avalon Limited is probably closer to the latest Lexus ES than any of the previous ones were to a Toyota Camry XLE V6. And Toyota could borrow a page from the Tundra playbook and slip a Platinum version of the Avalon above the Limited to even better replace the Lexus ES.

Yet, as with our previous story, this author remains skeptical of the rumor that Lexus would eventually kill the ES. It is, by far, Lexus’ best-selling sedan in the United States (and Lexus’ second-best-selling vehicle overall here). To put the numbers into perspective, the 5186 copies of the ES sold in the U.S. during January 2013 exceeds sales of the rest of the brand’s car lineup combined (we’re leaving the SUV and crossover RX, GX and LX lines out of this discussion). And, looking back at the 2012 calendar year, the 56,158 ES units sold in the U.S. are just a couple of thousand units under the sum of last year’s IS, GS and LS sales here combined. ES’s sales advantage, in fact, might have been even greater had it not been for the downtime due to the production changeover from the 5th to 6th generation model. Is Lexus really in a position to “throw away” sales numbers like those? Or does Toyota think that a combination of a better and more popular Avalon, a roomier Lexus IS and a vastly better-selling (and critically-acclaimed) Lexus GS might eventually make the ES redundant? At any rate, with the latest versions of the Lexus ES and Toyota Avalon siblings having been on sale for just a few months and foreseen to sell for 6 to 7 years in essentially their current state, there is still time for Toyota to let the market (and the company’s engineers, product planners and marketers) sort out what the best course of action is going forward.

A final footnote in this discussion is the decades-long, on-and-off rumors that the Lexus ES line would eventually be built in North America. These reached a new crescendo when the latest ES essentially became a higher-lux version of the built-only-in-the-U.S. Toyota Avalon amidst a strong yen/weak dollar currency exchange rate that would make North American assembly far more profitable. Among the latest of those predictions comes from Haig Stoddard of the respected WardsAuto industry journal, who in mid-December 2012 said he “expects Toyota to add production of a Lexus model at its Georgetown, Kentucky plant”, the precise location of Avalon production. This decision alone should have a large bearing on the Lexus ES’s future, and we should add that, since then, the newly-weakening yen versus the U.S. dollar is making the decision to move ES production to North America a less pressing matter.

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