In 1998, Lexus took on BMW at its core discipline. How did that go?
In 1998 the Lexus brand had only reached its ninth birthday. Up until then it had two cars on sale in the Euromarket, the LS400 saloon and the GS300. With the LS200, Lexus extended its range into BMW 3-series territory. Was it a Good Thing? While consistency can be a bit tedious in the arts, in business it is generally a positive attribute. In some ways, Lexus had consistency nailed down. All their cars have been screwed together by black-belt, Olympic level robots and technicians.
The LS400 itself had already become a legend for quality. Intended to be the world’s best car until the next one came along, a case can be made that it is still the world’s best car when all measurable parameters have been balanced. In a more shallow way, Lexus did not manage consistency, not the kind valued by people who value consistency for its own sake and are utterly unwilling to see the many levels consistency can operate on.
What the IS200 is is not only a sports saloon that aimed to be a better 3-series than the 3-series, but part of a longer argument about what a crushingly competent high-end car maker could be. It’s an existential question, at bottom.
What was the IS200? “This new small Lexus, apart from looking to cement Toyota’s luxury brand in Europe, has the mettle to punch a hole in the German monopoly on rear-wheel-driven fun. And it looks the part,” wrote Horrell, P. in Car, October 1998. Appealing to my innately conservative inclinations (my radicalism has Burkean grounds), a straight six engine powered the IS200 and its power landed on the road via the wheels near the boot.
Such was the confidence of Lexus that they specified 2.0 litre swept volume, producing 155 hp via variable inlet valve timing and not a 2.5 or a 2.7 or a turbo. A 3.0 litre did turn up later on – and that was it for engines barring another 2.0 litre. (In contrast counting the number of engines available for the E-36 BMW 3-series requires a law degree. Ten? Eight?).
The Lexus’ initial 2.0 unit had 144 lb ft of twist action and a power-to-heft ratio of 122 bhp per tonne. How heavy? 1355 kg. The E-36 had a curb-weight of 1130 kg. It could achieve a maximum speed of 134 mph and consumed petrol at the rate of 29.6 mpg.
Car’s Paul Horrell summed it (the car) up as follows: “Given that Britain is both the best market for Lexus in Europe, and place where ‘prestige’ saloon market is the most clearly demarcated from the unfortunate mass-market horde, we’re likely to see a lot of IS200s on our streets. If it lives up to its on paper promise, it should shake up the class very nicely indeed.”
Honest John today calls the car “exquisite”, standing out from the Rover 75, BMW E-46 and Jaguar S-Type launched the same year. “Well equipped, reliable and rated highly by owners. Controlled rear-drive handling, rewarding manual gearshift and decent ride, ” HJ says. The quibbles involved the mediocre (not terrible) fuel consumption and (oddly) the fact that it held its value. Question mark. Scrunching brow.
So, in isolation, the case is clear the IS200 is a good machine, well-made. But? “But,” they say. Do they? Yes, running alongside that glowing praise is the lingering suspicion the IS200 was ‘merely’ a copy of the E-36. It is pretty clear that the IS200 has the same recipe as the E36 (and the Opel Rekord, for that matter).
But what do you do if the class leader has x, y and z qualities – do you (1) replicate them, do you try to (2) excel in other areas, or (3) select x,y and z and exceed them?
That glib pub-bore point, “it’s just an E-35* knock off matey” overlooks the twisting difficulty of the three alternative paths to gain market entry in a market as tightly fought at the premium executive. It had to be like an E-36 for the same reason the E-36 was like it was.
I’m going to ignore the boring fact the IS200 had a life in Japan as Toyota Altezza – as a Lexus, the IS followed path (1) because (2) and (3) would not work. To excel in other areas (path 2) is usually not possible because the other areas are less important or less relevant almost by definition. The market leaders lead because they match the customers’ needs by being good at x, y and z. If you want to lead the market in soap, don’t try selling hairspray, hairspray won’t clean your mitts.
To try path (3) would mean the possibility of overkill – a car that was 10% more BMW-3 series than the 3-series would not be the 3-series. And that was what happened to the E-46, a car with the very same brief as the IS200. The E-46 is reckoned to be the 3-series where the Three lost its way. In the very same year as the E46, Lexus offered a car as good as the E-36. That makes sense. It’s almost as if Lexus knew that the law of car evolution would lead the Three into its Later Elvis years.
This is fine and large but does not address the question asked at the start, about the nature of a crushingly competent high-end car maker. Which level of consistency did Lexus want? Why did their cars (the LS400, two iterations of the GS and the IS, not to mention the lovely SC) all seem so different and what was so wrong with that? Well, they were quite visually different which had to do with Toyota’s mothership demanding these cars could be sold as Toyotas in some markets. Bother.
If Lexus was to compete with Mercedes they needed some vertical affinity-kind-of-consistency even if it was really irrelevant. Who would have thought that a factor in buying Car X was its resemblance to the cars in the showroom you would not buy? What Lexus seemed to do was to over-estimate their potential customers.
It turns out that when people bought a small Benz it was because it was like the big Benz they really wanted, and that car had a lineage going back to the Holy Roman Empire.
The IS200 actually did well enough – and twenty years later looks very smart still. It’s so right-sized, that car. Apparently Lexus misjudged the value of consistent styling even as they got every thing else right. That, not the red herring E-36 thing, is the key. In isolation the IS200 is very fine but it really needed to be a scaled down LS400. Would that have been enough?
**” You mean E-36, you berk.”
Driven To Write 
Like the original IS200, IMHO only criticisms that can be leveled are it are the fussy rear end due to the circular pair of boot lights and not aping enough of the BMW 3-Series E36/E46 as a non-German alternative.
The latter would define as ranging amongst other things from the lack of a 2-door coupe and 6-cylinder diesels above to the 2.2-litre 4-cylinder units, up to not producing a more direct M3 analogue with the 276-320 hp 3-litre JZ Twin-Turbocharged engine used in the 4th generation Toyota Supra (and Japanese-only versions of the 2nd generation Lexus GS under the Toyota Aristo name), along with not producing either tuned 3-litre JZ or detuned JZ twin-turbo units to cover the gap in the range between the existing 217 hp 3-litre and 276 hp 3-litre JZ twin-turbo.
Can sort of see the need for the IS200 to be a downscaled LS400, though what would have been the best way to go about that would better the Japanese E36/E46 approach taken with the IS200? Would it have been better off with a V6 over an inline-6 or if feasible a lower-displacement V8?
Perhaps the point to note is not the few engines in Lexus´ IS range so much as the dizzying range offered by BMW and other European makers. That is something of a regional specialty. I agree with the point about the lack of diesel engines and a coupe. Toyota is a huge corporation. And I don´t believe anyone makes cars better for the money. What is peculiar is the way they manage their brands´ platform sharing. They must be a record holder for badge-engineering and Lexus deserved a system where it got unique sheet metal in all cases. At the same time, a good car is a good car and if it is a Lexus in the UK and a Toyota in Japan, so what.
Aside from those additional rear lights in the boot lid* that Bob mentioned, the first generation IS200 design was a masterpiece of restraint and careful detailing. Current Lexus designs are overloaded with detail and are just trying too hard to be distinctive, IMHO.
Does this militate against their premium positioning? I suspect so, particularly at the upper end of the range, where many potential buyers do not want to draw undue attention to themselves. I’m reminded of an occasion when my former employer,an American bank in London, thought it would be a good idea to provide a separate entrance at its HQ for its high net worth private clients (with visible signage). Most of these clients refused to use it and the idea was quickly abandoned. I suspect that this desire for discretion it most prevalent in Western Europe and may be much less significant elsewhere, so I am writing from a Euro-centric viewpoint.
* Was this a late addition to the design, to accommodate rear fog lights that were mandatory in certain markets? I’m sure I’ve seen the occasional photo of an IS200 without these lights.
In the era of the E36 fifty percent of BMWs sold were Threes and two out of three of them had four cylinder engines. Maybe it was not so much of a good idea to offer a two litre six as the only engine in the IS if it was to compete with the Three. It surely didn’t help that the engine seriously lacked power and bite.
Toyota shot themselves in the foot with the IS’ detailing . Those fishbowl rear lights looked like aftermarket items for dubious backyard tuning and the interior showed that not even Toyota could do miracles if they had to look after production costs. The materials used were sub standard particularly on the dashboard and centre console where they did a vain attempt to hide this in a cheesy design with infantile instruments looking like one of those brash G-shock watches and a centre console looking like a ghetto blaster.
These glitches compared very unfavourably to the stylistically confident A4 or Three.
Lexus thought it was a USP to offer the six as standard. Not that I rate Car´s aesthetic judgement so highly, but they liked the instruments so much they were on the opening double-page spread. The little reversing lights had a jokey quality to them unsuited to the car´s general demeanour.
To answer Bill, by mini LS-400 I mean Lexus should have scaled down the styling to fit the IS package.
Maybe they had a USP with the six. Then at least they should have made sure the engine had serious power at 325/328 performance levels
Alfa managed to make BMW take their 156 dead serious as an E36 competitor, not least by offering 320 power at 318 prices with vastly superior equipment levels.
After a year or so with my first 156 I got so infuriated by my dealer that I seriously considered buying another car (it took me another five years to actually do that..). The IS200 would have been a possible replacement, but those cheesy rear lights and the horrible interior, particularly that cheapskate dashboard, immediately threw the Lexus from the short list. There were so many details clearly targeted at five-year-olds that I wondered who on Earth was meant to buy that car. The Alfa at least allowed grown-ups to be seen in it at daylight without the need for camouflage, something that couldn’t be said of the Lexus.
Dave, Richard, fair comment about those tail lights, although I wonder if they are “aftermarket” looking only with the benefit of hindsight? At the time the IS200 was released, they were quite novel and, I think, proved to be the inspiration for similar aftermarket items to fit crusty old Fiestas and Corsas etc., which now prejudices our perception somewhat.
Interestingly, there’s still a few aftermarket tail lights available for this model, such as the LED ones below, that actually look more “OEM” than the originals:
I don’t know who actually started the trend for fishbowl rear lights. The fact alone that the backyard tuning brigade immediately took them to their heart is indication enough that Lexus targeted the wrong customer base with these details.
Who would like to sit in a car that had its aftermarket modifications supplied by the manufacturer? Perhaps they should have made available W203/Mondeo B4Y-style lights as an optional extra…
Having reviewed the interior of the 1998 Lexux IS200 I can say two things. No, three. One, you can´t say the IP is nice and you can say it´s not terrible. Two, the E-46 BMW interior is equally average to unimpressive. Three, the mediocre interior is a let-down. The 190E, for example was made of bullet-proof stuff. Even if there were even fewer toys you had the same quality as in a E and and S. Still, I won´t write off the Lexus for its lights or its dead ordinary interior.
I beg to differ. The E46 interior is unobtrusive but infinitely better made of much better material than the IS’.
I don’t dismiss the IS because of its rear lights. I disliked it because it targeted a customer group I don’t belong to of which the cheesy lights and the nasty interior were an expression. The strip of hard shiny plastic running around the instrument panel (and around the ovoid – of all things- ventilation outlets) painted the worst naff colour of creamy gold with glitter effect alone would be enough to disqualify the interior. This interior was meant to be something between an Arcade game and a Wurlitzer box, nothing I’d consider to spend my time behind the wheel in.
Richard, I feel you are being far too harsh here. The E46 had a very fine cabin, with superior ergonomics.
This really was the culmination of all that BMW had learned about cabin design, before it ripped up the rule book and introduced iDrive.
Clarifaction: it´s the E36 that I am critical of. I know the E-46 quite well. It´s much, much better and rock-solid.
It was a good thing that they entered that market, and I always thought that the IS 200 was a nice design in its own right, detailing apart – I didn’t make the ersatz BMW 3-Series connection. A colleague had one and liked it, although it got through its front tyres every 9,000 miles or so (cue distinctly unhappy fleet manager).
That said, some of their other models did borrow rather heavily from M-B, especially the RX 300, which looked like a copy of the M-B ML. No matter how well-engineered the cars are and or excellent the dealer service is, it’s a bit of an odd / timid sales proposition to say ‘We can build cars similar in design to those made by the brands you like, but better’. I took a look at their current range of saloons, coupés, SUVs (and a hatchback) and they seem rather bland / similar to each other.
Re the Honest John assessment and the cars holding their value – they just mean that you can’t get one on the cheap, which I guess is seen as a negative point in a buyers’ guide.
I wonder how Infiniti are doing, these days.
From where I am sitting, a car´s ability to hold its value is first and foremost an advantage and only secondarily a disadvantage. If you have the money to buy the car, you get more of your money back. If you are too poor to afford a car with strong residuals your poverty is exacerbated by the fact you lose more of your money.
Good residuals relate to more repeat customers which translates into higher initial transaction prices. Lower rediduals eventually kill a car company. Look at what decades of poor resale values did to Citroen and Peugeot who eventually quit the market sectors where people refused to buy the cars for fear of losing a lot of money very quickly. Lancia in the UK and Alfa Romeo too are examples where cheap-to-buy second hand means slow poisoning.
Of course, a company can overdo the pursuit of high residuals by making the car a bit too expensive to buy in the first place. Mercedes tended in that direction until the mid 90s. And some companies bend over backwards to avoid anything that damages resale value and still fail. Ceteris paribus, it is easier to fail by neglecting residuals than by overdoing the retention of residual value (I think).
About the way Lexus shadowed BMW and Mercedes: I don´t think they shadowed them enough and BMW and Mercedes and Audi already shadow each other anyway, don´t they? . Lexus wanted to joing that party and didn´t go at it with enough consistency. These days they do their own thing and have the hybrid tech as a USP. I think today Lexus is more consistent a marque than it was in the 1990s. The only thing really bugging me is the tag-line “experience amazing”. The first one, “the relentless pursuit of perfection” was a gem, simple and frank and very much a promise for the utmost attention to quality.
Instead of Infiniti I went to Lexus UK. I found the LC500 is available in a cream yellow colour. It only costs 88K. Much to my surprise, I have found someone selling a brand new car I´d really consider blowing a huge amount of money on. At the more affordable end, I´ve fancied a loaded Insignia, preferably with all-wheel drive. At the higher end of the spectrum the cars there leave me cold. That was until I saw the LC500 in yellow. I like it in the other hues but in yellow it is quite a stunnner. The rest of the range looks very homogenous, styling wise. It´d be nice if the LS saloon was a little calmer. Volvo´s S90 still wins the dignity prize and there is no second and third place either.
Infiniti have three vehicles: two crossovers (Q30 and QX 30) and a saloon (the Q50). It´s not a big range – call it focused. I find the saloon quite intriguing. Then again, I am the kind of person who would probably shop all over the place if I was buying new cars regularly. I´d give Infiniti a spin if I had a chance.
Yes – all that (and more) is true re residuals. I guess given the IS200’s age, it’s in to ‘buy, use and throw away’ territory by now – perhaps that’s their thinking (?).
Another way to keep residuals up is to restrict supply, of course, not that I’m implying that anyone would do that (your Honour).
I must say that I’d missed the LC500 – yes, it’s lovely; I’d have one in dark red, I think. My problem with both Lexus and Infiniti is that I’d love to own one, but there’s nothing in their ranges that’s suitable – nice brands, shame about the ranges.
I’ve recently started taking a shine to the Volkswagen SV. It’s completely irrational, as I have no need for a car that large. I just like it as an object – it looks useful and honest.
That´s hard to understand. Infiniti have a neat-looking saloon (didn they not have a coupe?) and Lexus have a Golf-sized hybrid and three saloons plus some CUV´s. What´s missing? A three door estate? A roadster?
Well, I suppose the CT hatch is okay(ish) – I’m not very keen and there’s nothing in the B-segment to compete with the A1. It’s odd – logically I know that they’re very fine cars, but I can’t seem to relate to them, somehow. Perhaps if I owned one, I’d come to appreciate it.
I can’t bear the CT hatch!