Section 6. Strengthening Development and Sales Efforts in the Japanese Market

Item 2. Challenging the Market with New Brands and New Genres

The Harrier opens a new genre

Against the background of stagnant sales in Japan, TMC reassessed its product planning from many angles, which resulted in an initiative to understand market needs more rapidly. The concrete results of the new initiative were manifested in TMC's product rollouts of the late 1990s.

The Harrier, launched in December 1997, was an SUV derived from a passenger car, a formula pioneered in the RAV4. As a luxury crossover that combined a spacious cabin with high powertrain performance and quiet operation based on the basic performance of a midsize passenger car, the Harrier opened up a new genre.

Following its well-received launch in Japan, the Harrier was introduced into the North American market as the Lexus RX 300 in March 1998. A strategy targeting 40-something baby boomers paid off, making the RX 300 extremely popular among affluent females as well. In 1999, TMC sold close to 80,000 vehicles, equivalent to three times the original goal, catapulting the RX 300 to a position equivalent to that of the best-selling Lexus model in North America. Following TMC's lead, automakers around the world launched similar models, firmly establishing luxury crossovers derived from passenger cars as a new segment.

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