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Looking at Lexus Sales in China

There’s an interesting article in Businessweek about how Lexus is performing in China — here are some quotes:

Lexus sold just a fifth of luxury leader Audi’s tally last year in the world’s biggest car market. It also trails BMW and Daimler’s Mercedes.

Although Lexus sales in China grew 61 percent, to 49,000 cars, last year, Audi sold 236,000, says J.D. Power and Associates.

John Zeng, a Shanghai-based analyst for J.D. Power, says Toyota is at a disadvantage because it imports all the Lexus cars it sells in China. Importers pay a 25 percent custom duty and a 17 percent value-added tax. There’s also a consumption tax, based on engine size, that can reach 40 percent.

Lexus’s underdog status is partly due to its later entry into China. It opened its first dedicated showrooms there in 2005, after beginning imports in 1993. Audi, the favored brand of Chinese bureaucrats, is owned by Volkswagen, which entered the market in 1985.

If I’m reading this right, Audi has been in the Chinese market for 27 years and sold 236,000 vehicles in 2010. Lexus, on the other hand, has been in China for 6 years and sold 49,000 vehicles in 2010.

The other key statistic: Lexus increased sales by 61% over 2009. That’s a number I would read healthy growth, but there’s no context — let’s look at some background numbers from Audi, Mercedes & Lexus (BMW includes Mini sales in their numbers and throws the whole thing off):

Audi Mercedes Lexus
2009 157,188 68,500 30,450
2010 227,938 147,670 49,000
% Increase 44 115 61

(I wasn’t able to find the Lexus 2009 sales figures, so I calculated from the article’s numbers.)

So while Lexus is clearly trailing Audi in total units, it did see 17% more growth — in fact, it’s Mercedes’ 115% increase from 2009 to 2010 that’s the real story here.

One final standout statistic is regarding worldwide sales from the article:

Globally, Lexus sales have failed to take off in major markets outside of the U.S. In Japan, sales reached 33,400 cars last year, about half the company’s original target when the brand was introduced there in 2005. By contrast, Lexus’s U.S. sales rose 6.2 percent in 2010, to 229,329. While worldwide sales rose 12 percent, to 410,000 cars, that’s less than a third of luxury car leader BMW’s deliveries of 1.46 million cars.

[Source: Businessweek]

ChinaSales Reports
  • Anonymous
  • March 30, 2011
We need time, and Lexus needs more ambition!
  • E
  • March 30, 2011
I agree that Lexus needs more ambition outside the US. Pretty much, a lot of Toyota and Lexus Japanese products overlaps one another. Some how Toyota needs to up one on the Lexus lineup by offering something unique over the Toyota products beside different color interior options... LS and the Crown Majesta GS and the Crown Royal/Athlete IS and the Mark X HS and the Sai ES and the Camry CT and the Prius <- I highly disagree but most regular consumers will view it this way RX and the Harrier (previous gen RX) <- yes the previous gen is still on the page LX and the Land Cruiser GX and the Land Crusier Prado
    am with you in that , but let's try another scenario what if TOYOTA goes to boxer engine RWD from SUBARU, and LEXUS remains with the ordinary engine types with LEXUS go more up market luxury and replacing the LX & GX from truck based to uniform body , deleting the ES , refine more the IS , GS & LS as a real competitor in the high speed high end 4 doors coupe with variant from each one of the 3 (sedan , coupe , cabriolet , 4wd ) , plus for just GS & IS ( GT & Station wagon). and TOYOTA stepping up also as near luxury brand (which was it's type in 80's) making sporty and luxurious vehicles with somehow mainstream prices as we know TOYOTA will make a 4 doors version of the FT , why not sell the FT as a COROLLA with it's variant and have a global wheel base to put in it also the CAMRY and all it's variant with , overseas selling to MARK-X , CROWN & MAJESTA as a topper. P.S. (HYUNDAI have EQUUS & GENESIS which i believe MAJESTA & CROWN much better if compete to them respectively , the only thing i think it make that leak is they don't wanna conflict with brothers from LEXUS) ------------------------------------------------------- (FreeSpirit) in the previous TLE releases
LEXUS needs to improve its line up. A lot of cars sold by Audi, BMW and Merc in the UK are estate, 2 door coupe and convertables + the sprots lines lime, M, AMG, S line etc. Quick look at BMW webpage shows 25 car variants, on Lexus UK, its hardly 7.
  • J
  • March 30, 2011
There's more than just having better lineup and uniqueness from its Toyota lineup. In Asia, brand name is very important. It says a lot about your status. The German brands have been associated with luxury and status. I've never seen so many Mercedes while I was in Hong Kong. Lexus is a late comer, but is catching up quickly. I believe Lexus needs to dis-associate itself from Toyota more. Also it needs to associate itself with the younger generation. The older generation has already been branded. I still think Lexus is doing good; just give them another decade.
  • J
  • April 7, 2011
There simply aren't enough models or engines in the line up. A basic problem to fix if Toyota had the focus to do it, which I'm not sure it has. Lexus was designed for the USA, and hasn't moved on from there. Each model (IS, GS, LS, RX, etc.) needs at least three hybrid engine options, low, medium and high power. Get to it Toyota!!
    • K
    • April 12, 2011
    Agreed, you've summed up one major issue -- hope we start seeing more engine options with the next generation of vehicles!