Lexus to sponsor Wallabies

LEXUS Australia has used the opening of its latest new dealership to announce it will become the official automotive supplier for the Wallabies.

GoAuto understands the deal, which was formally announced at this evening’s opening ceremony for Lexus Australia’s 24th retail outlet at Rushcutters Bay in Sydney, involves both an unspecified cash transaction and the supply of vehicles to both the Qantas Wallabies and the Australian Rugby Union (ARU).

In return, the arrangement, which will be followed by the naming of a number of Wallabies players as Lexus ambassadors, includes Lexus access to players, corporate hospitality and ticketing, with Lexus owners to be offered hospitality at local ARU matches as part of the brand’s Encore ownership program.

The naming of Lexus as ‘official vehicle partner’ to both the Wallabies and the ARU was announced by Lexus Australia chief executive Tony Cramb during tonight’s formal opening of Sydney City Lexus, which marks the return of Lexus to its spiritual home just a few blocks from the marque’s original Sydney dealership, on William Street.

However, Mr Cramb said the number of Australian Lexus outlets would remain at 24 for the remainder of this year as the brand undertakes a detailed review of its national dealer network.

Former Lexus Australia chief executive John Roca said last August the ambitious local expansion plan by Toyota’s luxury brand had been put on hold for two years until the arrival of the all-new CT200h, which has been officially confirmed for release as the first dedicated hybrid model for Lexus in Australia early next year.

Left: Lexus IS350. Below: Lexus Australia chief executive Tony Cramb.

However, Mr Roca said Lexus was still determined to expand from a then-current 23 dealerships to 38 within a decade to an eventual 48 – while maintaining the same number of dealership owners – to support what he expected would become the brand’s top-selling model thanks to a sub-$50,000 starting price for the Corolla and Prius-based CT.

Now, Mr Cramb says that although the renewal or replacement of existing dealerships would continue, the exact number of Australian Lexus dealers in the medium to long-term remains the subject of investigation, following a 12.5 per cent slump to just 5836 sales last year for the brand, which has bounced back with a 28.5 per cent sales increase so far in 2010.

Lexus bettered its 2009 forecast of 5500 sales, but remained well down on the 6700 vehicles it sold in 2008, when the global financial crisis struck, let alone its sales record of 8200, set in 2007.

“The expansion plan was really announced prior to the GFC and I think the GFC gave all of us an opportunity to sit back and have a look at the business in totality, so from our point of view it was a great learning experience for both Lexus and TMC, I’ve got to say,” Mr Cramb told GoAuto.

“We’ve probably learnt that the aspirational volume we’d set for ourselves at that point was nowhere near as important as taking care of our customers and looking after the quality of the dealers that we already have here in Australia.

“So I’d have to say that that dealer number and I guess the way we manage the dealer network is under review at the moment. We’ve kicked off an internal study to try to establish what the ideal number of dealers is.”

Mr Cramb said the opening of the new Rushcutters Bay facility demonstrated confidence in the brand, and comes in addition to the renewal or separation from Toyota retail outlets of Lexus representation in Perth, Wodonga, Blackburn, Hobart, Adelaide and Maroochydore.

The latter will effectively replace the Lexus dealership in Caloundra and, like all new or refurbished Lexus outlets, will feature the brand’s latest corporate identity.

“There’s plenty of action in terms of dealership facility expansion, (but) the internal study will establish just how many dealers we need once we really kick the franchise into gear,” he said.

“Rushcutters Bay is a magnificent dealership. Our first Lexus dealership in Sydney was just up the road in William Street so to a certain extent it’s very much a coming home for the franchise. Obviously it’s in a magnificent part of town from a luxury sales point of view and I think it represents the brand really nicely.”

Mr Cramb said Lexus remained on target to launch the CT200h hatchback here as its smallest – and first front-wheel drive – model here in the first half of 2011, but he was less bullish about the sub-$50,000 starting price targeted by his predecessor.

While more local CT200h details are expected to be revealed the Australian International Motor Show in Sydney this October, Mr Roca previously said the CT would likely replace the IS250 (priced from $55,900) as the top-selling Lexus model in Australia.

“CT is going to be a terrific opportunity for us,” he said. “Obviously pricing hasn’t even been discussed at this point in time, but it does give us an opportunity to add some significant volume to the franchise.

“We’ve got some terrific vehicles in our range but from a volume perspective IS and RX are our predominant vehicles and CT will be our third pillar, which will give us a bit more stability for the ongoing future of the brand.

“If you look at the market, the downsizing trend is really apparent not just on the passenger side but the SUV side as well, predominantly for economy reasons and emissions. So the market appears to be moving in that direction as well so the timing couldn’t be better.

“We haven’t even started our pricing discussions yet with TMC, but that (sub-$50K), is certainly where we’re aiming at. Our desire is to position it below the IS, but where it ends up … “The CT is locked in for Australia, hopefully positioned beneath the IS.”

Apart from a number of model-year upgrades in 2010, Lexus will this year also finally launch the 3.5-litre IS350 which Lexus Australia today confirmed would have a 3.5-litre V6 developing 233kW for a specific output of 67.4kW per litre – higher than its naturally-aspirated competitors and the highest of any petrol engine in the Lexus range.

“We have the gap in the IS product line-up at the moment between the 250 and the IS-F,” said Mr Cramb.

“The IS250 is unbelievably well received by customers but if there is a criticism from some customers it is the capacity of the engine and the IS350 will resolve that.

“We’re the only right-hand drive market to receive it and we had to fight pretty hard, so it’s terrific to be able to bring that car to market here,” said Mr Cramb, who ruled out any prospect of the diesel-powered IS220d being sold in Australia.

Mr Cramb described 2010 as a year of consolidation for Lexus in Australia, and attributed much of the brand’s sales increase to last year’s 50 per cent tax allowance for small business.

“I am very pleased with the way that we’ve started this year,” he said. “In fairness a lot of it is a carryover from orders we received at the end of last year through the investment allowance. A lot of the deliveries have come through that way but the start has been good.

“We see this year as a year of consolidation, to be honest. We’ll do a few more than we did last year but not many.

“This year is about stabilising the business, making sure dealer profitability is sorted out, making sure our own business model is improved and developing our way through to the future.

“We’ve got some fairly big plans and this year it’s important to batten down the hatches and get ourselves organised.

“Throughout the past year, Lexus has quietly gone about its business. Lexus has weathered the past 12 months well and with the product we have on the way it’s only going to get better for our business and dealers.”

The new Lexus Australia chief said his company’s sponsorship of the Wallabies and ARU was a logical one for the brand, and would not come at the expense of other financial backing, including of the Spring Carnival horse races.

“Lexus sees its support of the Wallabies as a mutually beneficial relationship,” he said. “The Wallabies are much like a team of our engineers, all striving to achieve their best and deliver a play or a vehicle that is perfect.

“Although perfection is virtually unattainable, it’s the pursuit that binds Lexus and the Wallabies as a team. For Lexus the end goal is delivering a vehicle and service that exceeds customers’ expectations. For the Wallabies I'm sure it’s standing there at the Rugby World Cup in New Zealand next year holding the Webb Ellis Trophy."ARU deputy CEO Matt Carroll said the Lexus deal was an ideal way to kick off the Wallabies’ 2010 international season.

“Under coach Robbie Deans, our young Australian side is poised to make the transition from potential to performance,” he said. “That drive for excellence is in keeping with the way Lexus goes about its business.

“We have high hopes and high expectations for the Qantas Wallabies heading into 2010, and looking towards the horizon, of a successful Rugby World Cup campaign in 2011.

“At ARU we are delighted to have come to an agreement with a motor vehicle company as respected in its field as Lexus. I'm sure Lexus will find the Qantas Wallabies an equally good fit. We are both focused on success and integrity.”