"It's very simple when you have one market," said Schlicht, who was interviewed last week at Toyota Motor Corp.'s offices in Nagoya. "You have multiple regions now--like Europe wanting one direction, Japan another and China coming on. That gets more complicated."
He said the aim of progressive luxury is to strengthen an identity of smart luxury--where social responsibility and green credentials count as much as, if not more than, raw engine power and conspicuous consumption.
The Lexus CT 200h hybrid, which went on sale this year, is the first result of the new push into progressive luxury, said Schlicht. Fine-tuning the car's suspension to provide a sporty ride--despite mustering only 134 hp--underscores the priorities.
He said progressive luxury will be spelled out in future models through:
-- More expressive, daring designs.
-- Aggressive application of hybrid technology.
-- Advanced use of onboard telematics.
-- Expanded use of F and F Sports packages, following the IS-F and IS-F Sports performance variations. For starters, the sporty packages will be added to the CT and RX ranges.
The F packages deliver a specially tuned or completely different engine, transforming the base model into a "real sports car in every sense of the word," said Schlicht. The F Sports trim is a lower-rung option offering the standard engine with sporty tuning of the suspension.
Lexus also is exploring new niches after tapping the entry-level luxury segment with the CT.
A top priority is a coupe to fill the void left by the discontinued SC, Schlicht said. Other possibilities include new SUV variants. But going smaller than the CT is unlikely, he said.
"There are new segments developing as we speak, segments within segments," said Schlicht, who joined Toyota in 1986. "I think there's lots of potential future markets."
Meanwhile, Schlicht said Lexus probably will keep its crown as the top-selling luxury car maker in the United States this year for the 11th straight year. But he wants to wind down as soon as possible the aggressive incentives that helped deliver those results.
Lexus sales climbed 8 percent to 201,769 vehicles through November, putting it on pace to best BMW in car sales. But to get there, Lexus had to pile on incentives after the brand was stung by multiple recalls, covering a wide variety of items that included floor mats, brake cylinders, valve springs and vehicle stability controls.
"The impact is huge on our dealers," Schlicht said. "They did an incredible job to sell what they did."
He defended the incentives as necessary and having minimal impact on residual values.
"We don't think we've gone over the top," Schlicht said. "If we saw any damage to our brand, our company is mature enough not to chase No. 1 just for the sake of No. 1."