Tesla Motors Inc Mall Stores Strategy ‘Clever’: Lexus

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Tesla Motors Inc (NASDAQ:TSLA) is attracting the interest of some of the biggest luxurious automakers, with Lexus hopping on the bandwagon recently. Lexus thinks the company’s direct sales model is clever, and its executives are fascinated with it, says a report from Green Car Reports.

More appealing to younger buyers

In an interview with auto industry trade journal Ward’s Auto, Lexus U.S. chief Jeff Bracken talked about the EV manufacturer’s strategy, saying opening company-owned stores in shopping malls is “a clever one.”

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According to the executive, the Palo Alto-based automaker is attracting younger buyers who are primarily disinterested in visiting traditional franchised dealerships. Youngsters generally put in more research before visiting a dealership and are often younger than the salesperson at the store. Such a situation creates a sort of uncomfortable experience, however, Tesla’s mall stores may create a lower-pressure environment.

Lexus not to breach dealership model

Generally, Tesla Motors’ staff does not take commission for their work, and since electric cars are relatively newer and mysterious to most consumers, they give more information to customers and encourage serious shoppers to buy a car online. Auto dealers associations have never been happy with Tesla Motors’ sales model and have lobbied hard for banning direct sales.

Lexus has still not laid out any plan for mall stores, but anything planned would keep dealers as a “part of the solution,” according to Bracken.

Tesla viewed as a rival

Toyota’s Lexus could use mall stores to advertise their cars, attracting probable customers who will then be referred to a traditional Lexus dealership to buy the actual car.

Tesla is now being considered a legitimate rival by Lexus, and it is not the only brand to consider Tesla as a rival. Just a few weeks ago, the company’s U.S. marketing chief, Brain Smith, said spiking sales of Tesla’s Model S is the one reason sales of the Lexus LS full size-luxury sedan have dropped. Lexus has seen declining sales for quite some time because the current model is older than that of its rivals. The models were last updated in 2013, but a complete makeover has not been carried out since 2007.

On Monday, Tesla shares were down 1.43% at $204.04.

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