Having developed the Lexus as a top-selling luxury car in the United States, Toyota Motor Corp. will sell the brand in Japan this month for the first time.
But can it lure wealthy Japanese away from their coveted German brands?
The Toyota name has long been an easy sell on its home turf, so the carmaker hasn't needed to market its high-end autos under a distinct name.
But with Japan's car market stagnating and its population aging, Toyota is looking for a new source of growth: older drivers looking to trade up and Japan's new breed of young professionals with disposable income.
So Toyota is hoping to replicate the success it had with Lexus in the United States, where it quickly rose from its 1989 launch to become an American status symbol. Toyota won't say how much is it investing in the Japanese launch, but competitors and media reports say it has spent hundreds of millions of dollars on 143 sumptuous Lexus dealerships -- with marble floors and plush furniture -- that are opening Aug. 30. Dozens more showrooms are being planned.
"This has been a dream of ours for years," said Toyota's new president, Katsuaki Watanabe, speaking at a glitzy media event on the site where Japan hosted the 1964 Summer Olympic Games.
But Toyota officials concede that Lexus won't be an easy sell.
In Japan, wealthy consumers tend to favor German engineering -- Volkswagen AG's Audi, BMW AG and Mercedes-Benz from DaimlerChrysler AG. Last year, industry officials said, imports accounted for 90 percent of the market for cars that retail at $50,000 and up.
"The premium European brands have more than 100 years of history behind them. Our history is much shorter," said Takeshi Yoshida, managing officer of Lexus product development. But, he added, "the Lexus brand doesn't have as much historical baggage as other brands."
Toyota's effort to conquer its own high-end market shows a rare weakness in the company's global firmament. It holds a 45 percent share of the Japanese market, and its share of the U.S. market is 12 percent and growing. It is the world's most profitable carmaker, with a market capitalization that is greater than General Motors Corp. and Ford Motor Co. combined.
The Japanese luxury market, however, has been elusive. Toyota sells high-end cars in Japan, but they haven't been typically associated with luxury.
In fact, many of the cars sold under the Lexus brand in the United States have been available in Japan for years under the Toyota name. The goal is to reintroduce some models -- including the GS, IS and SC -- with new features and more power.
The spruced-up versions will feature navigation systems, internal lights that automatically switch on when sensors detect the approach of the motorist and, in some cases, bigger engines. These models will sell at a considerable premium. The GS 350 sedan will start at roughly $46,580, about 28 percent more than the Aristo, an earlier model that had been sold in Japan. (By comparison, the 2006 GS 300 sells for roughly $43,000 in the United States.) Other Japanese carmakers will be watching this effort. Toyota's rivals also market luxury brands in the United States but not in Japan. Nissan Motor Co. sells luxury vehicles under the Infiniti brand while Honda Motor Co. sells the Acura brand.
Both say that they would like to import these brands to Japan but haven't done so yet. One reason, said Yusuke Sekiguchi, Nissan vice president of marketing in Japan, is the challenge of improving on customer service in Japan, where standards are already so high that dealers take pictures of customers who buy new cars, frame them and deliver them to the new car owner.
European rivals say Lexus's arrival in Japan could boost growth in Japan's long-stable market of roughly 300,000 luxury cars sold annually. That happened elsewhere: As Lexus grew to a top-selling U.S. brand in the past decade, Mercedes's U.S. sales almost quadrupled to 221,000, said Mercedes spokesman Masaaki Kawakami.
One big question: Will Lexus compete on price? Europe's carmakers charge far more for luxury cars in Japan than elsewhere, tapping into a long-held Japanese association between high prices and quality.
According to brokerage firm CLSA Asia Pacific Markets, a BMW 545i that lists for about $56,000 in the United States sells in Japan for nearly $84,000; an E-class Mercedes that sells for $56,900 here goes for $85,524 in Japan.
Foreign luxury-car manufacturers charge so much that Lexus can market its cars at a lower price and still charge a premium, said Chris Richter, a CLSA analyst.
"A large drop in luxury-car pricing in Japan is almost inevitable," Richter said. "That may substantially increase the size of the Japanese luxury-car market."
Toyota Motor Corp. President Katsuaki Watanabe said selling the Lexus brand in Japan "has been a dream of ours for years."