Lexus Asia Forum May 23, 2002 1. In a word: EXCELLENT Milestones: #1 Luxury Nameplate in U.S. two years in a row Lexus vs. the competition State of Lexus.

Lexus Asia Forum

May 23, 2002

1

In a word: EXCELLENTMilestones: #1 Luxury Nameplate in U.S. two years in a

row

• Lexus vs. the competition

State of Lexus USA

2000 2001 2002 YTD206,037 223,983 75,164189,423 213,127 76,040205,614 206,638 68,694193,009 158,934 45,178189,154 172,083 54,77643,778 44,532 21,830

1995Lexus 79,334BMW 93,309Mercedes 76,752Lincoln 150,814Cadillac 180,504Jaguar 18,085

• Sales by model YTDLS 8,290GS 5,425ES 22,654IS 5,873SC 5,491RX 24,178LX 2,806

State of Lexus USA

GX LaunchNovember 2002

State of Lexus USA

• J.D. Power and Associates Awards

VDI Vehicle Dependability Index Best Overall Carline*IQS Initial Quality Study #1 LS 430

#1 ES 300#1 RX 300

CSI Consumer Satisfaction Index Best Overall Carline**APEAL Automotive, Performance,

Execution and Layout#1 LS 430#1 GS 430#1 ES 300

SSI Sales Satisfaction Index #3 Carline

*1995 –2001. Lexus has been ranked first every year since brand was eligible.**1991 – 1995, 1997 – 2001

Brand TV: “Garage”

Brand TV: “Skid”

Brand TV: “Wind God”

New Brand Print Look for Lexus

Minority Report TV: “Warehouse”

“Lexus Minority Report sports car stands out as theMOST STRIKING CONCEPT AT THE SHOW!…”

- New York Times

“This is the kind of car you dream about; the kind of car you lust for…”- Denver First News (NBC)

“Those Lexus people continue to surprise us…”- Motor Trend

Minority Report Card Gets “A” for Ads- Adweek

“This futuristic Lexus movie car is arguably the MOST EXOTICfour-wheel vehicle at the show.”

- Popular Mechanics

Lexus ‘Minority Report’ Concept…Another Reason to Envy Tom Cruise- NBC.com

Spielberg’s ‘Minority Report’ Cruises Lexus into Leading Role- Ohio News Sun

Lexus Cast by Spielberg- CNN.com

Tom Cruise will forsake Porsche to pilot this specialty Lexus in an upcoming Spielberg flick

- Autoweek

Going to the Big Screen…Lexus in 2054- Ft. Lauderdale Auto Show Program

Lexus ‘Minority Report’ Media Coverage...Lexus ‘Minority Report’ Media Coverage...82 MILLION MEDIA IMPRESSIONS!82 MILLION MEDIA IMPRESSIONS!

Minority Report Release Dates

• USA June 21• AUSTRALIA June 20• HONG KONG July 4• INDIA August 2• INDONESIA July 10• JAPAN December 7• MALAYSIA July 4• NEW ZEALAND June 27• PHILIPPINES June 26• SINGAPORE July 4• SOUTH KOREA July 26• TAIWAN June 29• THAILAND July 5

The Lexus Brand Project

What is it?

An effort to gain clarity, focus, and competitive advantage at a time of

great strength.

How Extensive Is It?

It will affect everything Lexus does internally and externally.

It will influence every touchpoint, creating a mantra for all Lexus employees and

the brand as a whole.

It Is Not a Replacement for the Lexus Covenant

Or Our Promise

The Passionate Pursuit of Perfection

But It Will Rejuvenate These and Give Them New Clarity.

Where We Began…

• Since launch of Lexus the brand had lost some of its focus

• Quality/service gap closing between Lexus and competitors

• Lexus seeking a way to deepen consumers’ appreciation for the brand

• The brand needs to establish a stronger emotional connection

• Stake out a clearer positioning in consumers’ minds – explore the possibility of “owning luxury”

Lexus can leverage these cultural trends and existing associations to clarify its

position in the market as the brand that does luxury best.

Where We Started

• Dealers: There is a strong yearning for help in forging stronger emotional bonds with customers

• Culture: In the world of luxury a new spirit and new meanings of luxury are evolving

• Customers: Lexus is already seen as a younger brand that embodies this new luxury spirit

A Six-Month Process

• Dealer Roundtables (4 roundtables, 47 dealerships)• Dealership Visits (32 dealerships, 250+ interviews)• Management Interviews (15)• Operational Team Interviews (32)• Expert Panel Interviews (10)• Consumer Research (12 small groups: NY, LA,

Minneapolis)• Dealer Ideation Session (43)• Steering Committee Ideation Session (18)• Competitive Research

Priorities of Affluents Are Changing

Being interesting•Eclectic & textured•Pursuing passions•Being intelligent•Appreciating the

moment•Being introspective•Personal growth

Being grounded•Family focused•Having balance•Embracing

simplicity•Being resourceful•Comfort•Connecting with

something largerSource: Affluence Study, 2001Source: Affluence Study, 2001

And How They Experience Luxury Is Evolving

ProductProductss

ExperienceExperiencess

ServicesServices

““I’ve arrived”I’ve arrived” ““I’m interesting”I’m interesting” ““I’m free”I’m free”

Source: Affluence Study, 2001Source: Affluence Study, 2001

…All of Which Are Changing Consumer Expectations of Luxury Brands

• Luxury is a “comfort break” in their lives• Luxury products and experiences should

“nourish the spirit” as well as provide physical comfort

• Luxury brands should save time, energy and stress

• A luxury brand should offer activities, products and services that help bring people together

• Anything that a luxury brand does to free consumers from marketplace worries is seen as very valuable

Source: DYG Dialog, March 2002Source: DYG Dialog, March 2002

PeoplePeople

•RespectfulRespectful

•PamperingPampering

•Good Good communicatocommunicatorsrs

ProductsProducts

•QDRQDR

•QuietQuiet

•ComfortComfort

•Luxurious Luxurious interiorinterior

ProcessesProcesses

•EffortlessEffortless

•Stress-freeStress-free

Source: Dealership InterviewsSource: Dealership Interviews

Lexus Has a Firm Foundation of Substance

And Is Also Beginning to Deliver Symbolically

To Others• I define my own

success• This is for me• I’m self-confident• My opinion of myself

doesn’t depend on others’ opinions of me

• My priorities are different

• I’m down-to-earth

To Myself• I’m developing my

potential• I’m simplifying• I experience life• I seek stillness in

my busy world• I’m accessible• I’m real

Source: Curious Company Research, 2002Source: Curious Company Research, 2002

What Does Lexus Say About Me?

Our Opportunity

Source: Curious Company Research, 2002Source: Curious Company Research, 2002

The substance and symbolism in the Lexus brand is already well aligned with the values that modern affluents are seeking from their

luxury brands.

The opportunity is for Lexus to gain a competitive advantage by more strongly

asserting ownership of evolved luxury and its core values.

The Opportunity: Evolved Luxury

We can stake out a new agenda in the luxury automotive category, and thereby set ourselves apart from

traditional rivals with outdated values. In doing this, Lexus will define where

luxury is today, not where it was yesterday.

Launch: October 2002

QUESTIONS