AANA presents the latest episode of Marketing Dividends which features Adrian Weimers, Lexus Corporate Manager, who discusses luxury car marketing and how to adapt messaging to changing economics within the sector.

Weimers says that the reason for the renewed growth in luxury car sales has been because of increasing affordability.  Lexus has followed the model of brands in other luxury categories and created a lower entry price, allowing consumers to engage with the brand earlier in their life-cycle.

“In the past, you would have seen luxury cars predominantly being large sedans, but now they’re everything from a small hatchback to a small SUV.  As a consequence, we’ve seen an influx of people that have come from mass brands,” Weimers said.

“In fact, about 60 per cent of all the inflow into luxury car brands are from this segment.  The luxury car tax threshold starts at $65,000 and almost half the sales are less than that price point.  If cars are considered fuel-efficient, that threshold rises to $75,000, with about 75 per cent of sales below that price point.

“Australians have a perennial love affair with SUVs – without a doubt the luxury car market is booming because of this.”

Weimers talks about how Australia is one of the most competitive car markets in the world and how that influences Lexus’ marketing approach.

“I have counted 65 car brands in Australia, giving consumers around 350 models to choose from.  Car advertising focuses on the launch of new vehicles.  However these days you need to focus on winning top-of-mind share.

“20 per cent of our luxury car sales at the moment are to people aged 35 and under.  Most have grown up with luxury vehicles or luxury goods as an aspiration, so the desire to own luxury vehicles won’t diminish.  Whilst we wouldn’t target millenials specifically, I think that they are tastemakers and there’s lot that you can learn from them to shift and change your approach to presenting your brand.”

Weimers explains that Lexus has year-on-year sales growth and that long-term return on marketing investment has also increased by 10 per cent.

“You can split out marketing investment that drives short-term sales versus marketing investment that returns long-term brand equity, and that return on investment for the long-term brand equity has actually doubled,” Weimer added.

When it comes to digital, Weimers agrees that the path to purchase through digital has disrupted the path to purchase for car consumers.

“We have a lot of research that says consumers start with two brands.  You add, you subtract, and then you buy something that is completely different to what you started out looking for.  From a marketer’s perspective, you have to work out what the moments are that you need to win, and where you can change consumer’s direction.”

Looking to the future, Weimers discusses the launch of Lexus’ new coupe.

“We’ll be launching a new coupe, the LC500h, a halo car for Lexus.  We’ll also be going back to our roots; great cars and quality customer service.  We want to go back and reinvest to ensure that we do provide the best customer service in luxury cars,” Weimers saids.

This episode was jointly hosted by James Hier, CEO MEC and James Daggar-Nickson, Business Editor and Business Channel Manager SKY NEWS BUSINESS. The full episode, in addition to previous episodes, is available on AANA’s YouTube Channel.