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Lexus, Infiniti luxury car brands test ways to fight Tesla, German rivals

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Detroit (Reuters): Japanese luxury auto brands Lexus and Infiniti are using the Detroit auto show to test new ways to regain momentum against Germany’s prestige automakers and Silicon Valley’s Tesla Inc.

Toyota Motor Corp’s Lexus brand unveiled at Detroit its “LF-1 Limitless” concept SUV model, signaling that Lexus may start to focus more on SUVs than its traditional large sedans.

The LF-1 proposed a blend of an aggressive, sleek profile with a system called ‘Chauffeur mode’ which allows the driver to take hands off the wheel and let the SUV handle most of the driving.

The LF-1’s also previews a futuristic navigation technology that anticipates where the driver is going based on driving habits and history, and provides hotel recommendations or other concierge services.

“We don’t want to be the ‘race car’ brand; we don’t want to be the ‘quiet ride’ brand. We want to be the brand which is emotionally connected with the customer,” said Cooper Ericksen, Vice President of US marketing for Lexus. The Japanese luxury brands are fighting to gain ground in the US luxury market as Volkswagen AG’s Audi brand and Mercedes-Benz have expanded sales, and Tesla has provided a fresh alternative to the established brands.

Last year the Lexus brand suffered a 7.6% slide in US sales last year. At Honda Motor Ltd’s Acura luxury brand, 2017 sales fell 3.9% from 2016. Nissan Motor Ltd’s Infiniti pushed up sales by 11.3%, mainly by selling almost twice as many sport utility vehicles as cars. However, Infiniti’s total 2017 sales of 153,415 vehicles put it behind the leading Germany luxury car brands, as well as Acura, Lexus and General Motors Co’s Cadillac brand. Lexus, Infiniti and Acura launched in the US market in the late 1980s and took advantage of quality problems at Audi and a lack of innovation at the then-leading luxury brands in the market, General Motors Co’s Cadillac and Ford Motor Co’s Lincoln brand.

Now, the structure of the US luxury vehicle market has changed. Four brands - Daimler AG’s Mercedes-Benz, BMW AG, Volkswagen’s Audi brand and Lexus dominate sales in the US luxury market.

Tesla, meanwhile, has gathered more than 400,000 orders for its Model 3 sedan, which is just starting to reach customers as the automaker tries to iron out production problems.

In Detroit, Infiniti showed a future sedan powered by a high efficiency gasoline engine. While the prototype is not electric, its exterior might appeal to customers of the Tesla Model S.

“We don’t look at Tesla and try to do the same idea of luxury, but there has been a natural evolution of luxury,” Infiniti’s executive design director Karim Habib said at the North American International Auto Show. 

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