Lexus Unlikely to Remain #1 in U.S. Luxury Sales


Lexus USA General Manager Mark Templin

Mark Templin, general manager of Lexus USA, has told the Automotive News that due to earthquake-related vehicle shortages, he does not expect Lexus to retain its position as the #1 luxury car manufacturer in the USA for an eleventh year:

Lexus dealers will begin to feel shortages of cars this week, and definitely in May, as a result of the March 11 Japan earthquake.

Mark Templin, general manager of Lexus Division, said dealers have a tight 30-day inventory across all model lines. Some models, such as the recently launched CT 200h compact hybrid hatchback, are nearly sold out.

Lexus is acting to retain customers, such as allowing customers to extend their concluded leases by two six-month terms. Given the high lease traffic from three years ago, a record number of Lexus customers are coming off lease this summer.

The expectation is that many of the Lexus owners coming off leases this year will likely purchase their vehicles, as the residual value will be higher than the off-lease price — Templin is explicit that dealerships won’t take advantage of the situation and start “gouging customers.” A standup move, in my books.

No question about it, the next six months are going to be a difficult time for Lexus (especially with the CT 200h starting off so strong), but this was an unavoidable situation caused by a terrible natural disaster — there’s not much that can be done.

As for the future:

Longer term, Lexus likely may not be the best-selling luxury brand ever again, as Mercedes-Benz and BMW move further down-market to hit fuel economy targets.

“It’s being driven by regulations, not demand. It won’t be that long before some [luxury brand] is selling 500,000 cars a year,” Templin said.

“If we do that, we have to grow our dealer network, or ask our current dealers to expand even more, and I don’t want to do either,” Templin said.

“If you are in the business to grow volume for volume’s sake, you stop being special. That’s not what we are about.”

Due to parent company Toyota, Lexus is in an unique position — unlike BMW & Mercedes, they don’t need to balance out their lineup with smaller eco-friendly models in order to meet government fuel regulations. Soon enough, both German companies are sure to see some brand dilution due to subcompact models and their price-points. Lexus, on the other hand, doesn’t need to introduce anything smaller than the CT — which might just be an advantage down the line.

[Source: Automotive News (Subscription Required)]

Comments


  • JVX

    Just heard on NHK news that parts needed for manufacturing won’t be restored until summer. I’m interested in seeing next quarter sales figure. I’m hoping for a speedy recovery in Japan.

  • http://www.facebook.com/RDS.Alphard Yong Thian Ding

    Well , even with lots of issue … Toyota group still manage to have a very nice sales , even they’re not 1st in Sales on paper but it’s still the 1st in my mind .

  • Pgr3boy

    I don’t care, as long as the LS is #1 selling in the USA? Because I know the LS is #2 worldwide, it only trails behind the S-class, so this means LS outsells the 7 series and A8!!

  • http://www.facebook.com/profile.php?id=717185464 Мохамед Абдулрахман Рамадан

    i think it is a good thing

    i even thought that Watanabe San and the old high stuff was wrong in compete of sales and forgot the core of what make Toyota

    the handling , the variety of sports car , the good design
    for god sake just any one see the trio (CHASER,CARESTA,MARK-II) in the early 90’s and how strong and sporty and unique design was offer

    Moral : if Toyota wanna came back to game it must came back to it’s roots

    which means good design rear wheel drive family sporty sedan

    just remember that toyota have in a decade ago

    COROLLA -AE (RWD) small family category (American)/ class C (European)
    CORONA,PROGRES (RWD) class D (European)
    CRESSIDA,CHASER,CARESTA,MARK-II (RWD) medium family category (American)/ class E (European)
    Crown Large full-size family category (American)/ class S (European)
    plus
    MR-2 coupe/ cabrio
    CELICA coupe
    SUPRA coupe
    SOARER coupe

    that’s whats make TOYOTA
    hope AKIO san listen or read

    ————————————————–
    (FreeSpirit)

  • PG

    Well, Lexus was taking a bashing sales-wise even before the quake, so they probably would have lost the sales crown anyway.

    Apart from that, MB and BMW going downmarket doesn’t necessarily have to mean that they will lose some of their brand cache, at least as long as their small cars offer higher quality than competing cars. Just look at the European market where they manage to do both, maintain their reputation and sell downmarket vehicles.

  • http://lexusenthusiast.com krew

    True enough — Lexus would have been in tough to keep their #1 position in
    the US even without the earthquake, but it would have been a much closer
    race, especially if the early success of the CT 200h was to continue.

    You do bring up a good point regarding the Mercedes & BMW European lineup,
    but it’s a different mentality in North America. Whereas the smaller city
    cars are a necessity in Europe due to road sizes and congestion, there’s no
    real demand here. Remains to be seen, of course — I’m a huge proponent of
    A-Segment cars, I just don’t think the general public shares my enthusiasm.

  • http://lexusenthusiast.com krew

    From my perspective, I believe Akio shares your viewpoint. I’m sure we’ll
    see more and more cars along the same line as the FT-86/FR-S.

  • FooFoo

    Luxury is luxury. A small car can be more expensive than a mid-size if it is built better. It just an excuse of loosing no. 1.

  • http://lexusenthusiast.com krew

    I didn’t mean it as an excuse — I was just trying to find a silver lining.
    :-D

  • lexusjoe

    Toyota/Lexus was a better company when they were BEHIND GM in sales. I don’t think Lexus NEEDS to be #1 anyway. As long as they remain “unique” and “special”, thats good enough for me. Dealers are OUT of CT’s, LX’s GX’s and almost sold out on LS’s in the northeast area.
    As far as Mark Templin warning about “gouging”, believe me, the unscrupulous New Jersey dealers will “gouge” and take advantage any way they can, thru tricks, gimmicks,etc

  • http://motorbikediaries.com Brendan

    “If you are in the business to grow volume for volume’s sake, you stop being special. That’s not what we are about.”

    Well said. Very informative. Thanks.

  • http://www.facebook.com/profile.php?id=717185464 Мохамед Абдулрахман Рамадан

    and that what i like about Akio than previous managers

    he have the TOYOTA soul

  • lexi

    S-class sold V6 engine in other countries not like LS they don’t sell V6 engine. Maybe LS build a V6 engine hybrid??? maybe they’ll sell more LS variants… what ya think Lexus???

  • http://lexusenthusiast.com krew

    I wouldn’t be all that surprised to see a V6 LS introduced with the
    next-generation — though I have doubts that will reach North America.

  • Pgr3boy

    God forbid the LS to have a V6, why would you do that? People who buy this class of cars don’t really care about small engines..

    When I think of Lexus LS things such as V8, ultra smoothness and a silent V8 engine.. Putting a V6 will automatically downscale the car

  • http://lexusenthusiast.com krew

    Well, I would like to see an LS with a V6/hybrid, similar to the GSh — but I do think that there needs to be a pure V6 LS available if only to compete with the Mercedes & BMW engine options.

    As much as I like the power of a V8, I’m all for having more engines in the lineup.