Lexus Europe Sales Up 7% in First Half of 2018

The UX and future CT will lead the way to breaking the 100,000 annual milestone for Lexus Europe.

It is hard for me to pin-point the reasons why the IS does not sell better in Europe. What can be done to change that?

Funny I'm reading this article now on Infiniti... to put it in perspective, Infiniti looks to have sold maybe 10% of what Lexus is selling, maybe around 3500-4000 units. Lexus has to be happy continuing to rise up and the hybrid strategy is looking brilliant with all the diesel issues...

mikeavelli

Funny I'm reading this article now on Infiniti... to put it in perspective, Infiniti looks to have sold maybe 10% of what Lexus is selling, maybe around 3500-4000 units. Lexus has to be happy continuing to rise up and the hybrid strategy is looking brilliant with all the diesel issues...

Infiniti arrived in Europe (under Ghosn) almost 20 years after Lexus. Even in the US Infiniti struggled compared to Lexus. Acura does not have the same aspirations as Lexus and Infiniti. It is almost impossible for any brand to reach "premium" status without heritage. Even Alfa Romeo, Maserati and Jaguar struggle, not because of lack of heritage, but because of "worse" products due to the R&D-Sales negative loop (no money for R&D, imperfect products, low sales, little profit, less money for R&D). In the luxury/premium market I do not recall any newly creating brand through any industry can has established itself among the old incumbents. The only cases it happened, was when products where 'innovative' or different. I would mention Apple and Tesla.

That said, it is not impossible, but a lot of rapid effort and investment is necessary. I am against such deceptive marketing, but it used and the most effective way of doing it, making a person subconsciously desire the product. That is the objective to achieve, every technique is possible if well implemented. Of course customer feedback has to be positive, at least the customer should not notice the deception.

Abraham Lincoln

You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

Levi

Infiniti arrived in Europe (under Ghosn) almost 20 years after Lexus. Even in the US Infiniti struggled compared to Lexus. Acura does not have the same aspirations as Lexus and Infiniti. It is almost impossible for any brand to reach "premium" status without heritage. Even Alfa Romeo, Maserati and Jaguar struggle, not because of lack of heritage, but because of "worse" products due to the R&D-Sales negative loop (no money for R&D, imperfect products, low sales, little profit, less money for R&D). In the luxury/premium market I do not recall any newly creating brand through any industry can has established itself among the old incumbents. The only cases it happened, was when products where 'innovative' or different. I would mention Apple and Tesla.

That said, it is not impossible, but a lot of rapid effort and investment is necessary. I am against such deceptive marketing, but it used and the most effective way of doing it, making a person subconsciously desire the product. That is the objective to achieve, every technique is possible if well implemented. Of course customer feedback has to be positive, at least the customer should not notice the deception.

They sold 800 units less than the way more expensive Maserati. UK sales are down 75%. Something is wrong. I agree that they wanted to get a small niche and know of the challenges. But the numbers in the article are really bad.

In contrast Lexus really has gotten it together in Europe especially compared to 20 years ago. The idea to drop diesels seemed crazy years ago but now is really taking off. Amazing courage and foresight here....

mikeavelli

They sold 800 units less than the way more expensive Maserati. UK sales are down 75%. Something is wrong. I agree that they wanted to get a small niche and know of the challenges. But the numbers in the article are really bad.

In contrast Lexus really has gotten it together in Europe especially compared to 20 years ago. The idea to drop diesels seemed crazy years ago but now is really taking off. Amazing courage and foresight here....

I think the only diesel model that reached Western Europe were the Lexus IS 220d and 200d (downsized version of the 220d).

And it made a lot of sense due to reliability (the 220d was the worst in Lexus history and forced them to come up with the 200d), performance and fuel economy.

Levi

It is hard for me to pin-point the reasons why the IS does not sell better in Europe. What can be done to change that? Is design the issue, that it looks boring simple with exaggerated accents?

One of the biggest grips I have with the IS is the lack of rear space and trunk space. The generation from 05 to 12 wasn't very roomy compared to the Germans, even when car sizes were fairly similar.

In addition, the European market until recently was very dependent on diesel models (good fuel economy, acceptable performance). However Lexus IS 220d and 200d weren't even close to that and the other model was the 250 was V6 gasoline which was very uncommon as Europeans prefer smaller engines prioritizing price and fuel economy over anything else (even in premium segments)

Lack of customization (close packages) was also very detrimental as Germans offer a lot of flexibility on how to customize your car but for Lexus adding a sunroof could mean a package of $10,000 just for a $1,500 package.

On top of that, Lexus brand wasn't as established as the other ones so winning customers only based on customer service, and design didn't warrant the same success as the LS430 back in the states.

Again I find it important to look at the progress in comparison to the main competitors, so I have looked up the German 3 numbers:

BMW: +1.2% (source: https://www.bmwblog.com/2018/07/12/bmw-group-achieves-its-best-ever-first-half-year-sales-result/ )

MB: -1.5% (source: https://news.best-selling-cars.com/...benz-posted-record-sales-for-first-half-year/ )

Audi: -1.8% (source: https://www.volkswagenag.com/en/news/2018/07/Audi_sales_June_18.html )

In other words: Lexus has turned the tides and gained market shares in Europe!

My guess is that Lexus will be focusing a bit more on the largest market, Germany. Here the sales slipped: -13%
But what can be done? Germans are extremely loyal to their own car brands. If I was Lexus, I would advertise the hell out of the fact that you can drive in all German cities with good conscience, whereas the German competitors still put most of their eggs in the diesel basket.

LDeleuran

Again I find it important to look at the progress in comparison to the main competitors, so I have looked up the German 3 numbers:

BMW: +1.2% (source: https://www.bmwblog.com/2018/07/12/bmw-group-achieves-its-best-ever-first-half-year-sales-result/ )

MB: -1.5% (source: https://news.best-selling-cars.com/...benz-posted-record-sales-for-first-half-year/ )

Audi: -1.8% (source: https://www.volkswagenag.com/en/news/2018/07/Audi_sales_June_18.html )

In other words: Lexus has turned the tides and gained market shares in Europe!

My guess is that Lexus will be focusing a bit more on the largest market, Germany. Here the sales slipped: -13%
But what can be done? Germans are extremely loyal to their own car brands. If I was Lexus, I would advertise the hell out of the fact that you can drive in all German cities with good conscience, whereas the German competitors still put most of their eggs in the diesel basket.

Comparatively, Volvo and Alfa Romeo also show growth.

Lexus needs to play Acura game in EU if they want sales numbers. Essentially this means they need cheaper models with up to 2.0 liter engines both petrol and hybrid. I strongly believe 2.5 hybrid limits their sales quite a bit, it's a big engine for some critical markets but yet they do not get the performance over bigger fees compared to 2.0 turbo diesels which are cheaper to register each year with same fuels efficiency and better mid acceleration.

UX will show how sales can grow quite significantly.

Lexus does not have the badge to afford making and selling mediocre cars.

mediumhot

Lexus needs to play Acura game in EU if they want sales numbers. Essentially this means they need cheaper models with up to 2.0 liter engines both petrol and hybrid. I strongly believe 2.5 hybrid limits their sales quite a bit, it's a big engine for some critical markets but yet they do not get the performance over bigger fees compared to 2.0 turbo diesels which are cheaper to register each year with same fuels efficiency and better mid acceleration.

UX will show how sales can grow quite significantly.

I thought hybrids weren't as good with small capacity turbos?
Do the Germans have any turbo hybrids?

mediumhot

Lexus needs to play Acura game in EU if they want sales numbers. Essentially this means they need cheaper models with up to 2.0 liter engines both petrol and hybrid. I strongly believe 2.5 hybrid limits their sales quite a bit, it's a big engine for some critical markets but yet they do not get the performance over bigger fees compared to 2.0 turbo diesels which are cheaper to register each year with same fuels efficiency and better mid acceleration.

UX will show how sales can grow quite significantly.

That depends on the market, turbo diesels are dying breed now, ever since the recalls their market share is dropping heavily, hence the drop in BMW/MB/Audi sales in Europe.

LDeleuran

Again I find it important to look at the progress in comparison to the main competitors, so I have looked up the German 3 numbers:

BMW: +1.2% (source: https://www.bmwblog.com/2018/07/12/bmw-group-achieves-its-best-ever-first-half-year-sales-result/ )

MB: -1.5% (source: https://news.best-selling-cars.com/...benz-posted-record-sales-for-first-half-year/ )

Audi: -1.8% (source: https://www.volkswagenag.com/en/news/2018/07/Audi_sales_June_18.html )

In other words: Lexus has turned the tides and gained market shares in Europe!

This is great, thanks for compiling. Still something how these brands sell more in a month in Europe than Lexus does in a full year.

krew

This is great, thanks for compiling. Still something how these brands sell more in a month in Europe than Lexus does in a full year.

Lexus will never be able to sell those numbers in Europe, it is not even present in every country and a lot of people do not know Lexus exists. Europe is very fractioned, there is no unified market, every country is completely on its own, so it is very hard for new brand to do more, especially luxury brand.

Their constant rise on the heels of NX is awesome though. It makes dealers viable, it makes their business profitable and it leads to expansion of dealer network. This is the most important part. After recalls, we had really hard time at dealer level in Europe since sales were so low that it was very hard for dealers to be profitable.

Lets hope UX becomes half of the success that NX is, and it will be great for Lexus.

Another super interesting thing is that Russia is a lot of Lexus European sales, with model mix complely different from European, and more aligned with USA... where hybrids barely sell and big trucks sell awesome.

Guys,
Do you think that Lexus may needs old brand as jaguar, Alfa romeo or even Maserati to merged with it so it can gain the heritage needed?
Note that this move already done by Audi before

LDeleuran

Again I find it important to look at the progress in comparison to the main competitors, so I have looked up the German 3 numbers:

BMW: +1.2% (source: https://www.bmwblog.com/2018/07/12/bmw-group-achieves-its-best-ever-first-half-year-sales-result/ )

MB: -1.5% (source: https://news.best-selling-cars.com/...benz-posted-record-sales-for-first-half-year/ )

Audi: -1.8% (source: https://www.volkswagenag.com/en/news/2018/07/Audi_sales_June_18.html )

In other words: Lexus has turned the tides and gained market shares in Europe!

My guess is that Lexus will be focusing a bit more on the largest market, Germany. Here the sales slipped: -13%
But what can be done? Germans are extremely loyal to their own car brands. If I was Lexus, I would advertise the hell out of the fact that you can drive in all German cities with good conscience, whereas the German competitors still put most of their eggs in the diesel basket.

Nice numbers....

The fact is Lexus will grow but let us all remind ourselves Benz/Audi/BMW is like GM/Ford in Germany. They are used from everything from taxi/fleet to trucks/vans etc. No different than in Japan where Toyota has 50% of the total market share.

Also what Lexus needs is higher performance, not just hybrids. They really need to bump the F marque up a level to make some real noise. Germany would respect that.

So only Lexus & BMW have positive mid year numbers

maiaramdan

Guys,
Do you think that Lexus may needs old brand as jaguar, Alfa romeo or even Maserati to merged with it so it can gain the heritage needed?
Note that this move already done by Audi before

IMO no, because Jag, Alfa and Maserati are already regarded as 2nd fiddle to Benz.

@peterharvey, I agree with you that now "on the current days" they are 2nd fiddle to Benz, but they still have a great heritage even in motorsports
Alfa and Le Mans 24 is Synonymous

If they are dropping from the mid 2000 for Jaguars and from late 90th for Alfa this not means that they don't have amazing history