Lexus pursues hybrid theory
25 January 2019
Author: Sean Keywood
The premium brand believes it is backing the right powertrain for the fleets of today. Sean Keywood reports.
Lexus is hoping new models and a focus on hybrid technology will help it to increase its presence in the fleet sector.
The brand has just launched the ES, its new executive saloon, which in contrast to the segment's mainly rear-wheel drive, diesel-powered norm, is front-wheel drive and exclusively hybrid.
Arriving soon after the hybrid-only UX SUV, it could be further evidence that with diesel car sales in a slump, Lexus has the right powertrain at the right time - a view taken up by general manager for fleet services Stuart Ferma.
He told Business Car: "The new ES enables us to target local businesses and company car drivers who may be new to the Lexus brand as well as hybrid technology.
"ES and UX are key to increasing awareness and sales into businesses and fleets. However, in the current market we are experiencing more businesses approaching us wanting to learn more about hybrid technology.
"With a reputation for quality and reliability, and un-paralled award-winning customer service, the extra product increases the appeal."
With the hybrid drivetrains it offers achieving lower official CO2 emissions than diesel rivals, Lexus is particularly bullish about their prospects with user-choosers.
Ferma said: "Cost is an increasingly important factor for business users. Independent data confirms that company car drivers can save up to £5,000 BIK over three years compared to similar products in the segment.
"Combine this with distinctive styling, class-leading whole life costs and an award-winning network driven by customer service, and it provides an increasingly compelling message to fleets."
According to Ferma, it is not just the ES's hybrid powertrain that has business driver appeal; its front-wheel drive layout is also an advantage, differing from its predecessor, the GS, and its smaller sibling the IS.
"The IS and GS use hybrid powertrains, but the ES now provides us with more choice to appeal to the business user," he said.
"It benefits from extra interior space all round due to the front wheel drive configuration, which business users may find more appealing."
With its focus on conventional hybrid, Lexus is not only setting itself apart from rivals' diesel ranges, but also from its nascent plug-in hybrid offerings.
Speaking at the European launch of the ES, product manager Sebastien Weckering - who agreed the model would mean new opportunities for Lexus in fleet - explained that while plug-in hybrids could potentially offer savings if used properly, Lexus did not see them as the chief rivals for its conventional hybrid cars, with the higher purchase price of plug-ins counting against them.
He said: "We start at £35,000, with a CO2 figure of 100g/km - that is competitive for BIK tax, allowing us to be relevant against the biggest share of the market, which we make diesel, then petrol, and then plug-in hybrid.
"I believe a couple of months ago there was a press release from Mercedes introducing a new plug-in hybrid E-Class, but it is £47,000. I think Volvo have a plug-in hybrid also, but it starts from £57,000."
At the launch, a Lexus spokesman said that if Lexus did subsequently think plug-in hybrid was the way to go, it would be simple to do - but added that the time was not yet right.
"When you've got hybrid, going plug-in is relatively easy," he said.
"So for us, if there was a swing in the market, in this segment or any other segment, where plug-in really did become a thing we had to have, we could have plug-ins relatively quickly.
"But we have got to sell cars today and tomorrow, and what most people really want is an affordable car for today and tomorrow. We believe that what we are offering now is the best option for that."