Lexus Manufacturing Status Update

Lexus USA general manager Mark Templin gave an update on the state of Lexus manufacturing at a recent media event in Chicago — here are the salient details, as quoted from Reuters:

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.

This is the most definitive answer we’ve seen yet. The fact that dealerships were running at 50% capacity in June should have ended the argument as to why Lexus sales are down, but strangely enough, this isn’t the case at all — here’s another quote from Reuters:

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.”

No question, Lexus has lost a step with last year’s recalls and this year’s production woes, but I wonder about Mr. Bragman’s analysis, especially when it discounts the introduction of new updated models. It’s difficult to accurately predict what’s coming when, but there’s definitely the new GS in the pipeline, and I wouldn’t be surprised to see the next-generation ES some time in 2012 as well (and that’s just my “safe” bets — there’s certainly other possibilities as well).

This idea that Lexus is somehow comparable to Buick confuses me. There were so many fundamental issues with how GM handled Buick, and it went way beyond what’s happening at Lexus. Models like the CT 200h will go a long way in reducing the average Lexus buyer’s age.

As to whether the days of being No. 1 in the United States are over, here’s what Mark Templin had to say:

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 mid-year because someone else is selling more cars than us.”

Read the full Reuters Article

DealershipsIn the NewsJapanManufacturingUSA
Since new Camry is coming this fall (my displace picture is the new US Camry , while my FB Wall have posted a new JP Camry) , so I expect new ES can come in 2012 together with IS and GS .
    • K
    • July 15, 2011
    I feel pretty confident about the ES, not so much the IS. It's possible, but I wouldn't be surprised to see the IS & LS as the major launches in 2013.
Greatest news !Really awesome!)Thanks!
  • X
  • July 12, 2011
I really don't understand Japanese brands get bashed.. Lexus does everything better then any GERMAN garbage.. And more
  • W
  • July 12, 2011
Hopefully the new GS should help.
  • T
  • July 12, 2011
So the two Lexii in our house are Buicks?  Don't think so.  I would be happy to compare the longevity and durability of my like-showroom-new-condition 1996 LS with ANY Buick.  And I would be happy to race any Buick ever made with our 2006 GS 300 AWD--even in dry conditions, although I know I would smoke a Buick in snow or rain--especially now that we put on a set of Conti Contact Extreme DWS tires. (OMG) I think Lexus' big problem these days is that owners are discovering that a Lexus with 100k on the odo is just barely broken in and are not buying new as often.  It takes awhile for people to wrap their heads around the idea of an ultra luxury vehicle with even better durability than a Toyota pick-up. Lexus will survive.  Have you ever met a Lexus owner who doesn't just love their car?  Yeah, me neither.
    • K
    • July 15, 2011
    You raise a very good point about Lexus owners holding on to their vehicles, and why not when a model like the GS looked almost identical throughout its entire lifecycle. I think this is why we'll start seeing more frequent (and mostly exterior) changes with new Lexus models -- have to shorten the upgrade cycle.
  • T
  • July 12, 2011
I would still buy an IS over almost anything else out there. Lovely car!
  • R
  • July 13, 2011
Buick isn't a luxury brand anyway, it compares with cars like the Toyota Avalon..
recent GS spyshots from nurburgring