Lexus October 2018 Sales Report

The new ES sold less this month than the old one did in September? Was the old model on a discount runout perhaps?
The LS better than September but missing their target of 1000 per month - need the Limitless!

At this point, IS sales are reaching niche-model levels. Hopefully Lexus has some way to fast track the development of the 4IS. RC sales are so low... hopefully the refreshed model and a strong advertising campaign will help.

All SUVs were negative for the month of September... yikes. Refreshes for GX and RX would really help about now. Lexus' decision to bump out the 4RX refresh until 2019 was unfortunate.

https://www.wardsauto.com/industry/toyota-honda-october-sales-dip-despite-record-light-truck-results

At Lexus, sales fell 4.6% on 22,716 deliveries.

In a twist of the narrative for most brands this year, it was light trucks that upended the brand’s result, not cars. Lexus car deliveries were flat, up 0.6% on a DSR basis, but light trucks fell 7.0% due to losses at all nameplates.

The LX large SUV posted the biggest drop, down 40.5% on 377 deliveries, but the typically strong NX and RX CUVs also fell, down 11.5% and 1.2%, respectively.

Both models’ hybrid variants posted good results, however. The NX hybrid, with 656 deliveries, was up 232.0% from October 2017 and the RX hybrid, with 1,416 sold, rose 101.7%.

Among cars, only two models, the new ES midsize sedan and new LS flagship, posted increases. The ES achieved a 29.5% increase on an adjusted basis vs. year-ago, while the LS boosted that model’s results 144.8%.

Through October, Toyota’s U.S. vehicle sales were flat, down 0.2% on volume of 2.015 million. The Toyota brand was up 0.1% while Lexus was down 2.6%.

That's interesting that the normal NX/RX were down but the hybrids were up, and that Honda's bright spot was their EVs. I wonder if the EV mass market is actually finally materializing.

Ian Schmidt

That's interesting that the normal NX/RX were down but the hybrids were up, and that Honda's bright spot was their EVs. I wonder if the EV mass market is actually finally materializing.

Lots of environmental news last month... "11 years to save the world," etc. That correlation might be far fetched, but I wonder if that could be fueling some of the changes?

The thing I don't fully understand but have been meaning to post is that a month or two ago, I read an article talking about how auto-related pollution increased significantly and it was due to emissions released during coal burning. The article pointed out how there is starting to be a measurable impact from electric cars and it's stressing the power grid, requiring more and more coal to be burnt to power it. If I recall correctly, it seemed to indicate that the burden of electric cars is just as bad of a pollutant as ICE cars, and possibly worse.

I wish I could dig it up.

Right. I just saw a similar article about how carbon emissions from electricity generation in the US were way down from 2005 due to a combination of conversion from coal to gas and lower demand due to more efficient appliances and light bulbs. It seems entirely reasonable that significant EV adoption could reverse that trend and actually make things worse.

Going a little further off topic, I see nuclear power as being a necessity in the coming decades. It's sad that despite so many people seeing this coming and warning about it, any plans for expanded nuclear capacity are at least a decade off.

The gadget Elon Musk really needs to put money into is the Mr. Fusion.

& finally the GX & LX shows there real age on the charts, guess when we can have the next generation of both?!!!

Gecko

Lots of environmental news last month... "11 years to save the world," etc. That correlation might be far fetched, but I wonder if that could be fueling some of the changes?

The thing I don't fully understand but have been meaning to post is that a month or two ago, I read an article talking about how auto-related pollution increased significantly and it was due to emissions released during coal burning. The article pointed out how there is starting to be a measurable impact from electric cars and it's stressing the power grid, requiring more and more coal to be burnt to power it. If I recall correctly, it seemed to indicate that the burden of electric cars is just as bad of a pollutant as ICE cars, and possibly worse.

I wish I could dig it up.

coal plants are easy power up again and can provide quick additional energy... for anything else, you have years of development time.

Also, it creates pollution close to us vs oil being far away.

Nevertheless, it will even itself out in the future. I cant see EVs not being a benefit to the society.

It also makes me feel like while Toyota's investment in hydrogen has seemed far fetched to some, it really might be our cleanest and most viable long term solution. It's unfortunate that there isn't more infrastructure to support it.

Theoretically, solar-powered sources pumping energy into the grid that supports EVs would also be clean, but it does seem to me that the coal burning required to power EVs doesn't make batteries as clean of a solution as many would like to envision.

The process of extracting the lithium and the battery rare components is much worth on the environment, that's why I pray asking the success of the solid state, at least won't be this harm, on the other hand the FCEV is less harm as they aren't 100% battery dependable so the battery whatever it's technology can stay way more

Gecko

It also makes me feel like while Toyota's investment in hydrogen has seemed far fetched to some, it really might be our cleanest and most viable long term solution. It's unfortunate that there isn't more infrastructure to support it.

Theoretically, solar-powered sources pumping energy into the grid that supports EVs would also be clean, but it does seem to me that the coal burning required to power EVs doesn't make batteries as clean of a solution as many would like to envision.

all of this is very long term anyway... by the 2030-2040 they have plenty of time to build new, cleaner energy. Problems are costs of expanding the grid, chargers, electricity generation... all of that spends energy, so........

Just to cap off this digression to EV, I would like to clear up some common misconceptions. TLDR: a lousy compliance EV needs to use very dirty electricity (I mean, pre-cold war era dirty) to be more harmful than the state of the art ICEV to the atmosphere. That's just the nature of power generation: modern fossil fuel power plants are incredibly efficient that ICEs cannot hope to compete. FCVs make more sense for an average nation with average carbon footprint. BEVs are unbeatable in a nation with low carbon footprint in the electricity sector (like France and Canada).

EDIT: Too long. So I just put the conclusion here.

@ssun30, thanks a lot bro for those info but
1) the 20% enviromental clean advantage will need upgrade for the electric grid for every country as this will be extra load and can make electric shortage as what happened in France because of the BEV

2) still after all those years, the nuclear power is not safe and any small fault can lead to another Fukushima or Chernobyl

3) the rare materials used in Li batteries

4) the recycling process which will make like double the pollution of creating the battery itself

5) the limited mileage in comparison to the other variants from Gasoline, Diesel, Natural Gas or even Fuel-Cell

6) the long refueling time in comparison to the variants from Gasoline, Diesel, Natural Gas or even Fuel-Cell

7) the accidents, floods safety and we saw 2 teslas and 1 Nissan in my mind that burned after got crashed in the battery place

So honestly the normal Ni-MH hybrid is much more safe and good / safer on the planet for the long run until the solid state start being produced or until there is enough refueling bases for the FCEV

@ssun30 Thanks for the detailed backgrounder!

@maiaramdan Nuclear power can be 100% safe; modern reactor designs exist that are fail-safe and cannot enter a "runaway" state. However, thanks to a very effective scare campaign in the 1970s and the resulting legislation/regulation nobody's been able to get a license to build one of those designs.

A Japanese company, I think Toshiba, has a working prototype of a fail-safe self-contained nuclear power plant about the size of a large refrigerator that could power an entire neighborhood for 20 years before major maintenance. I'd be thrilled to have one of those in my neighborhood, but I know I'm a serious outlier there :)

@Ian Schmidt , I know this info as I was working before in safety systems for nuclear reactors, but sir it won't ever reach 90% (+) you will have another problem which is the nuclear wastes after period of time for every reactor

Wow ! The Es sales are doing great! The Ls sales are doing good , the sales over all are lower than last years around this time , because of no Ct sales , well next year is looking great
And I am sure Toyota planned for this .

Gecko

Lots of environmental news last month... "11 years to save the world," etc. That correlation might be far fetched, but I wonder if that could be fueling some of the changes?

The thing I don't fully understand but have been meaning to post is that a month or two ago, I read an article talking about how auto-related pollution increased significantly and it was due to emissions released during coal burning. The article pointed out how there is starting to be a measurable impact from electric cars and it's stressing the power grid, requiring more and more coal to be burnt to power it. If I recall correctly, it seemed to indicate that the burden of electric cars is just as bad of a pollutant as ICE cars, and possibly worse.

Its not that people care about the environment, its that gas prices are up, so people are switching over to the MPG friendlier cars. End of the day, if weighing the pocket book vs. the environment, the bottom line always wins.

Lexus is bleeding bad and it's just going to get worse, it's only a matter of time when they will drop below 20k units a month. They are at the point that not even a good product will help them make sales better. They would need generations of good products in order to convince people to consider them.

Hopefully they've learned their lesson that you have to be the leader in technology if you want to play in top tier luxury market. Then things like the flagship skipping cycles or entry cars not being good enough to push through the whole cycle should have been addressed by now. It's a lot deeper than that really

mediumhot

Lexus is bleeding bad and it's just going to get worse, it's only a matter of time when they will drop below 20k units a month.

Indeed, an Automotive News commentary piece notes that Lexus' U.S. streak of 8 consecutive months of sales declines is the 5th-highest in the industry, exceeded only by Genesis (10 months of consecutive decline), Jaguar (13 months), Smart (22 months) and Fiat (30 months).

Lexus is still undisputedly the king of crossovers, despite its crossover lineup looking more and more vulnerable as competitors catch up. They are very slow with their crossover lineup expansion and is risking launching the LQ and next-gen LX into a weaker global economy. They are still plagued with the culture that they need to see a real demand before green-lighting any expansion. That's the true crisis lying ahead.

And the car division is on a downward spiral to the point it's almost a lost cause. One of the most confusing thing about them is misinterpreting lack of competitiveness as lack of demand (or using the latter as an excuse). The premium subcompact car segment is certainly not dead: BBA still sell comfortable four digits in the segment. And Lexus just let the CT die because they think there is no demand for it. No, it's a very vulnerable hybrid-only product that easily dies with low gas price. It's the lack of a compelling lineup that killed CT's sales, not the lack of demand for small premium cars. Similar thing goes for the IS and GS. No they sell badly not just because of weakening demand, but they are fundamentally uncompetitive. Now that the damage is done I would just say they should downsize the car division and shift maximum focus to crossovers instead.

Now it's almost a year after the launch of the LS and it's clear at this point they went in the wrong direction. The 5LS is a confused product that doesn't know what it wants to be. We had fears a year ago they missed the mark and the poor numbers prove our fears true.

The bright side is that they are marching ahead in Europe, JDM, and China. In particularly they are defying the automotive market crisis that's brewing in China posting record highs during an era of record lows.

ssun30

Lexus is still undisputedly the king of crossovers, despite its crossover lineup looking more and more vulnerable as competitors catch up. They are very slow with their crossover lineup expansion and is risking launching the LQ and next-gen LX into a weaker global economy. They are still plagued with the culture that they need to see a real demand before green-lighting any expansion. That's the true crisis lying ahead.

And the car division is on a downward spiral to the point it's almost a lost cause. One of the most confusing thing about them is misinterpreting lack of competitiveness as lack of demand (or using the latter as an excuse). The premium subcompact car segment is certainly not dead: BBA still sell comfortable four digits in the segment. And Lexus just let the CT die because they think there is no demand for it. No, it's a very vulnerable hybrid-only product that easily dies with low gas price. It's the lack of a compelling lineup that killed CT's sales, not the lack of demand for small premium cars. Similar thing goes for the IS and GS. No they sell badly not just because of weakening demand, but they are fundamentally uncompetitive. Now that the damage is done I would just say they should downsize the car division and shift maximum focus to crossovers instead.

Now it's almost a year after the launch of the LS and it's clear at this point they went in the wrong direction. The 5LS is a confused product that doesn't know what it wants to be. We had fears a year ago they missed the mark and the poor numbers prove our fears true.

The bright side is that they are marching ahead in Europe, JDM, and China. In particularly they are defying the automotive market crisis that's brewing in China posting record highs during an era of record lows.

Great post - all true.

One other thing that you nailed: There is already mounting pressure on consumer buying power and softening sales in the new market, but the impact on the auto industry will be much worse in 12-18 months as interest rates continue to rise and economic growth slows. Coincidentally, this is when Lexus will be launching refreshed GX, LC F, LS F and then later, LQ and LX. Just another instance of sitting on your hands for so long that they basically fall off. I can't believe how Lexus gets these things so wrong... it is shocking for the world's largest auto maker.

Lexus is a self-fulfilling prophecy. They subconsciously decide to kill off certain models and then blame everything else but their own product planning. It's amazing to me.

And welcome to Club Lexus, everyone. Your complimentary BMW test drive coupons are in your private messages ;-)

Ian Schmidt

And welcome to Club Lexus, everyone. Your complimentary BMW test drive coupons are in your private messages ;-)

I don't see any baseless ranting here. The negative comments are backed with proper, logical arguments. It could just be over-reaction, but most of the negativity doesn't go nearly as far as doomsaying.

Lexus made good decisions and bad ones. But it just seems they made a few too many bad ones given the size and resource their mother company has.

I made no accusations of baseless ranting, I was just having some fun with the general Debbie Downer-ism going on.

I've said it before, I'll say it again: I don't think there's deep planning going into what's coming out right now, for the most part. What comes next after the TNGA rollout is what's gonna be important. Revving the '19 LS well beyond normal to adjust pain points from reviews of the '18 is a positive sign, let's see what else they do. I expect the '20 ES to have much larger rear speakers, the way those threads are going...

ssun30

The bright side is that they are marching ahead in Europe, JDM, and China. In particularly they are defying the automotive market crisis that's brewing in China posting record highs during an era of record lows.

I have to think the biggest focus for Lexus right now is expanding into global markets at the cost of ignoring the American consumer. The UX is a great case in point -- only 20,000 annual sales are expected in the USA, while it's likely to become the top selling model in Europe.

The improvements Lexus can make in the USA are minor -- the ES is starting slow, but I have faith in that product. The RX is going to jump with its upcoming midcycle refresh. Despite low projections, the UX will add to the bottom line. I don't really see Lexus dropping below 20k units, but I also don't think we're going to see massive growth.

But in China, sales are rapidly increasing. Europe expects to hit 100k in sales next year. These are two huge markets, and Lexus is determined to establish itself in both.

ssun30

Lexus made good decisions and bad ones. But it just seems they made a few too many bad ones given the size and resource their mother company has.

There's something scary and smart about the continued lifestyle-ification of the Lexus brand. The longterm play is to make the vehicles secondary to the experience of owning a Lexus, whatever the hell that means. I also think Lexus believes all enthusiasts will be appeased with the introduction of the LS F & LC F. Whether that works out or not, I have no idea.

krew

I also think Lexus believes all enthusiasts will be appeased with the introduction of the LS F & LC F. Whether that works out or not, I have no idea.

Given that those will probably be $100k+ USD, I kinda doubt it. Sure, there's a halo effect, but they're unobtainable to the great masses. Granted, as a luxury brand, a new Lexus is generally out of most people's reach anyways, but I digress. I would say that a midrange option would entice enthusiasts, but the fact that the IS-F only sold 5k units in USA during its 7 year run is pretty discouraging.

At the same time I wouldn't underestimate the halo effect; people like to think when they're buying an IS or ES that they're just a few steps from an LS, and the cooler the LS is the better :)

Ian Schmidt

I made no accusations of baseless ranting, I was just having some fun with the general Debbie Downer-ism going on.

I've said it before, I'll say it again: I don't think there's deep planning going into what's coming out right now, for the most part. What comes next after the TNGA rollout is what's gonna be important. Revving the '19 LS well beyond normal to adjust pain points from reviews of the '18 is a positive sign, let's see what else they do. I expect the '20 ES to have much larger rear speakers, the way those threads are going...

No hard feelings. Just found the random CL comment out of place.