Koji Sato became head of Lexus in January after spending the last four years as the Toyota premium brand's chief engineer, a title he retains. Sato starts the decade facing the same mega-challenge as other automaker CEOs: How to prepare for the rise of electrified, autonomous, connected cars on a global level. Lexus's strength in hybrids puts it in a good position to meet current emissions standards, but regulators are demanding more. Sato outlined how he will steer the brand through these obstacles in an interview with Automotive News Europe Associate Publisher & Editor Luca Ciferri and Correspondent Nick Gibbs.
Addressing technology trends will be a huge challenge. How will Lexus look in 2030?
All the DNA of Lexus was in our debut model, the first-generation LS [from 1989], which was quiet, comfortable and well crafted. These three elements are our core. As we enhance our brand in the next 10 years, we want to always provide a better experience for our customers. In the past, people talked about the car based on its specifications: This car has this fuel economy, or this acceleration time. Today the customer really wants to have a better experience. That means we need to provide more emotional value, and that can't be measured.
How will Lexus increase the emotional appeal of its vehicles?
Our engineers are working hard on this. On one hand CASE [connected, autonomous, shared, electric] will have a big impact on the entire automotive industry, not just Lexus. But we still want to be unique and never lose sight of our brand direction to make sure we are not making a commodity. People have said that automated driving will make a car less enjoyable, but I don't think so. For example, later this year we will introduce our first-generation automated drive [based on Toyota's Automated Highway Teammate]. This development is always trying to determine how the customer feels about it. It's OK that everything is controlled by computers. I don't want to say it's easy [to manufacture], but anyone can do it. But, if the car enters a corner at high speed, how do you feel? We want to create a unique driving behavior, even if it's in automated mode. That helps us create our uniqueness.
What about electrification? That has raised similar concerns about turning the car into a commodity.
Electrified technology is the same. The current questions about electrified vehicles include: What is the range? What is the battery? This is common sense. But if you think about the future, we need to create additional value. Enjoyment is one. One example is the advanced traction control in the LF30 concept [revealed at the 2019 Tokyo auto show]. That is one of the key areas where we can create this unique vehicle behavior. We should never forget the fun-to-drive aspect. Some people will say the car will be a commodity, but we don't think so.
Will we see a car by the end of the decade with an electric motor in each wheel like the RF30 concept?
This concept hints at our direction by the end of 2030. We want to realize this car, but we know some elements present some technical difficulties. This is the challenge. We believe if we set the bar high, all the engineers will work to fill the gap. This is the style of Lexus.
Lexus launches its first EV, the UX 300e compact SUV, at the end of this year in Europe. Where else is this car going?
China, Japan and some Asian countries. But the main focus is Europe and China because of high demand and [emissions] regulations.
Why not the U.S.?
We sell UX in the U.S., but there is no plan to introduce an EV variant because there is no demand there and the regulation situation is different. Our fundamental strategy for electrified technology is "Right place, right timing, right price."
Lexus is launching its first autonomous-capable car this autumn. Which level is it?
It will start from Level 2 but it will have over the air (OTA) updates so that in the future we will update the level. Regulation as well as social concerns may affect what level we can produce in the real world, so we need to consider customers' expectations and how society will adapt.
Will the customer be asked to pay extra for the update?
It's not decided yet.
Will it use lidar?
Will automation be restricted to a specific vehicle or is it something that will roll out across your range?
Automated drive technology is not just focusing on the super high level. Our target is to expand it to a wide range of vehicles. It will be applied next year for the first-generation automated drive vehicle and after that we will roll out the technology to other vehicles.
Which car and which market will be first to get the technology?
We haven't announced that yet. [Lexus showed a LS sedan concept in 2017 that previewed its automated technology planned for 2020.]
The autonomous technology will be upgradable over the air (OTA). When do you plan to offer OTA?
It won't be this year, but sometime in the future. The car that debuts this autumn will be OTA-ready, but OTA itself will not happen this year.