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> Customers would be confused if Toyota took a new mid-range Lexus, kept the pricing, but branded it as a Toyota Avalon (the highest end Toyota sedan model in US).

I'm confused. I can't tell what point you're trying to make here. The Lexus ES and Toyota Avalon already are basically the same car, modulo some styling changes and about a 10% difference in base price. This clearly isn't causing Toyota much trouble, because they've been doing this for a long time.




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