Lexus to lose top spot in U.S. luxury car market

2011 Lexus RX 450h

CHICAGO, July 8, 2011 - Toyota Motor Corp's brand Lexus will end its streak of 11 years as the top luxury brand in the U.S. market due to lost sales in the aftermath of the Japan earthquake and tsunami, said Mark Templin, Lexus Division general manager.


Templin said Lexus U.S. sales will fall about 17 percent to around 190,000 vehicles in 2011.

The United States is the biggest market for Lexus.

All Lexus models, except the RX 350 crossover sport utility vehicle, are made in Japan.

Templin said the Cambridge, Ontario plant that makes the RX 350 will be back at full capacity in September.

Most Japanese plants assembling Lexus models have already returned to full strength.

However, the RX 450h hybrid SUV will not be at full production until October. The hybrid is typically 15 percent to 20 percent of RX sales in the U.S. market.

Lexus U.S. sales fell 38 percent in June as dealers ran out of key products. At the end of the month, dealers had about half their normal stock.

"June was the bottom of the trough, and we've turned the corner. We see the rest of the year being much better for us," Templin said, speaking to reporters at a Lexus media event in Chicago.

Lexus sales tumbled 18 percent in the first half of 2011 to 88,010, and German rivals BMW and Daimler AG's (DAIGn.DE) Mercedes-Benz sprinted by.

BMW's sales rose 13 percent to 113,705, and Mercedes-Benz climbed 7 percent to 110,926. If 2011 full year results end as expected, it would be the first time that BMW has outsold Lexus in the U.S. since 1997.

Templin shrugged off the significance of losing the luxury sales crown, and when asked if Lexus could reclaim the top spot in 2012, he said.

"Whether we're No. 1 or not, I don't care. We've never focused on that. We won't change our plan midyear because someone else is selling more cars than us."

BUICK SYNDROME?

Industry analyst Aaron Bragman of IHS Automotive Insight said on Friday the slump at Lexus goes deeper than a shortage of vehicles. He suggested that Lexus could suffer from the same stigma as did General Motors Co's Buick brand for the past several decades: old people's car.

Bragman said it would be "quite a challenge" for Lexus to reclaim No. 1 in luxury sales in 2012 even with full production because its lineup is not as alluring as it once was and it relies heavily on two models, the RX 350 and ES 350 sedan, a spinoff of the Toyota Camry.

The RX so far this year accounts for 45 percent of Lexus U.S. sales and the ES sedan 19 percent.

"Like Toyota, they've lost their momentum. They have an aging buyer base, and a lot of their dealers are afraid they will become the next Buick. Their new products haven't resonated with younger buyers."

The median buyer age for Lexus is in the mid-50s, and Templin said he is comfortable with that because it is a result of high loyalty.

Sportier models such as the IS sedan and CT hybrid sedan are attracting younger owners, said Templin.

[Source : RUETERS]