(Bloomberg) -- Lexus thinks it finally has a way to catch up with Mercedes in luxury-car sales: go into the high-end boat business.
Toyota Motor Corp.’s premium brand plans to start selling a 65-foot (20-meter) ultra-luxury yacht in the U.S. in the second half of next year. The vessel, announced at a boat show last week in Yokohama, will have room for 15 guests, three bedrooms with their own washrooms, plus separate quarters for crew. Executive Vice President Shigeki Tomoyama wouldn’t reveal the boat’s price, but said it will be comparable to others in its class. (Sunseeker’s 66-foot Manhattan goes for about $3 million.)
For Lexus, taking to the water is less about selling big, beautiful boats -- the market is tiny -- than it is about adding luster to a brand that’s lost some of its shine. Lexus hasn’t held the lead in high-end U.S. car sales for almost a decade. Meanwhile, mass-market automakers are closing the quality gap and the shift toward autonomous driving and vehicle-sharing threaten to turn cars into utilitarian people-movers.
“What this does is raise Lexus’ luxury quotient,” said Jaqui Lividini, founder of Lividini & Co., a New York-based brand strategy firm. “I mean, what’s more luxurious than a yacht?”
An image makeover at Lexus is probably in order. Since it ended an 11-year run as the U.S.’s top-selling luxury car brand in 2010, it’s been outpaced by BMW AG and Daimler AG’s Mercedes-Benz, which has been faster to shift toward the sports-utility vehicles that Americans love. In 2017, U.S. sales of Lexus sedans dropped by a quarter and the Japanese brand sold about 10 percent fewer vehicles than market-leader Mercedes.
To catch up, Lexus this month unveiled a new ultra-compact utility vehicle, the UX, at the Geneva auto show. It also added a three-row variant to its RX line of bigger crossovers, redesigned its flagship LS sedan and launched a sleek new sports car to draw people into dealerships, the LC coupe.
Aside from the new hardware, the company is also taking a different marketing tack, trying to recast itself as the purveyor of a luxury lifestyle, not just high-end cars. To do that, the company last year jettisoned the “pursuit of perfection” slogan it had been using for decades and adopted a new one: “experience amazing.” The new tagline is meant to appeal to wealthy consumers who, studies show, are spending less on stuff and more on activities.
Which brings us to the boat.
“If you look at boating, you’re not buying a shell, you’re buying an experience,” says Pamela Danziger, owner of research firm Unity Marketing. “There’s a whole lifestyle that goes along with it. So, to me, it makes a tremendous amount of sense.”
Lexus hasn’t unveiled its yacht design yet, but Tomoyama says most of the details have been worked out and it’s now in the production planning stage. A clue to how it may look is an early sketch the executive revealed at a Tokyo event last May, which appeared to show three decks and borrow heavily from the same swooping lines used in a 42-foot one-off concept yacht that Lexus put on display last January.
“Improving the quality of the cars themselves is important, but we also need to present car owners with a dream-like vision of the luxury lifestyle,” Tomoyama said at last week’s boat show. “A yacht is a very effective part of that.”
Like the concept craft, the new boat will be engineered by Toyota Marine, a business that’s been around since 1990, and manufactured by the Marquis-Carver Yacht Group in Pulaski, Wisconsin. But whereas the smaller vessel was made entirely of a carbon-fiber composite, the 65-footer will be made with a mix of materials that lowers costs.
Lexus isn’t the only carmaker dipping its toe in the water -- Mercedes in 2016 started selling its own limited-edition yacht and BMW has been playing with concept crafts since at least 2011 -- but the Japanese luxury brand is the only one that’s committed to mass production.
Robert Passikoff, founder of New York-based marketing consultancy Brand Keys Inc., says he likes the strategy of using big boats to sell more luxury cars.
“Just the fact that the boat is there may reinforce values that are important for the automotive category -- like speed,” he said. “It becomes more emotional, and you kind of go, ‘Well, I can’t afford a million dollar boat, but a $80,000 car? That I can afford.”’
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