Lexus China Sales Up 24% Year-Over Year

Tragic Bronson

Sooner or later, China will be the better market for Lexus than North America. No dumb tariffs to deal with.

Tariffs in China have always been and will always be larger than in the USA. It is very different type of market.

However, due to the sheer size, Lexus has a good chance of significantly increasing Chinese market sales, to over US market, where they are capped at some 300k right now, which is pretty realistic number.

Tragic Bronson

Sooner or later, China will be the better market for Lexus than North America. No dumb tariffs to deal with.

Tariff is what prevents Lexus from getting even close to BBA, who produce mainstream products locally. So Lexus is getting close to NA sales despite the tariff.

To me a 300k per year target needs the following execution on their part:
>>2nd Gen CT, in 200 and 250h flavors, starting at RMB 200k. (+500 units/mo)
>>A more affordable RX hybrid that is at least RMB 100k cheaper than the 450h. (+500 units/mo)
>>Keep GX and LX fresh, redesign ASAP. (+1,000 units/mo)
>>A more affordable entry-level IS and an IS hybrid to account for loss of the GS, and it needs to grow in size considerably. (+500 units/mo)
>>LS LWB to make it relevant (+300 units/mo)

So in the best case scenario we have, by 2025:
ES ~6k/mo covering the range between ¥280k to 470k
NX ~5.5k/mo ¥300k-500k
RX ~4.5k/mo ¥400k-700k
UX ~3k/mo ¥230k-320k
CT ~1.5k/mo ¥210k-260k
IS ~1k/mo ¥270k-450k
GX ~1k/mo ¥ 600k-800k
LX, LQ, LS, & LC combined (and potentially LM) ~2.5k/mo ¥800k+

That's a total of 24k/mo on average. I'm expecting NX and RX to level off due to stiff competition and buyers having cheaper options (UX and CT). The goal is to optimize the pricing structure to maximize profit margins (namely moving base trim buyers to UX) Also my prediction for the UX is on the low side since Lexus buyers on average have a budget in the RMB 300k-350k range. Lexus is not a cheap brand like Cadillac and BMW, yet.

ssun30

August sales breakdown available.
#1 NX 5,116 (3,739 Gas+1,377 Hybrid)
#2 RX 4,376 (3,935 Gas+441 Hybrid)
#3 ES 3,705 (3,680 Gas+25 Hybrid)
#4 IS 2,858
#5 CT 1,068
#6 LX 636
#7 LS 471 (147 Gas+324 Hybrid)
#8 GS 291 (145 Gas+146 Hybrid)
#9 LC500h 25
#10 RC-F 19
#11 GX400 1

>>As expected ES had a weak month due to depletion of 6ES inventory and 7ES production ramp. Due to low availability of the 7ES, IS had a shocking month with 2,858 sold! That is more than the number sold from January to July combined. I hope this is a chance for people to appreciate the IS more, although with its meager rear legroom it will not do well in China anytime soon.
>>The NX and RX are gaining momentum. Although it can be clearly seen the RX really needs a more affordable hybrid. Also, NX could use a better pricing structure to move sales away from the base trim NX200 to better optioned 300 and 300h.
>>CT is holding on. 1068 may not sound like a lot, but that is 1/3 of the Mercedes CLA, the sales leader in compact segment. It is not a star but a consistent seller, so I see no reason to kill it and not build a 2nd Gen.
>>LX continues to have a strong showing. China will overtake U.S. as its second largest market this year. It is crazy how good the LX is business-wise for Lexus, with a selling price higher than the LS and even the LC but the cost of a Land Cruiser. GX was taken off the market for half a year now. It could really need another facelift ASAP. There is no reason to sell one GX a month when they could easily sell a thousand. I say this because Toyota sells over 11,000 Land Cruisers (Prado and LC200) a month, which is more than the Highlander. So there is clearly a large market for the premium versions of these two vehicles. I will say this again: Toyota's lack of faith with their BoF product line and the resulting indecision to redesign or refresh is one of the biggest mistakes they've made in this decade.
>>LS keeps struggling despite Lexus offering incentives of up to RMB 150,000. Compared to original post-tariff-drop prices, now one can basically have the Executive Package plus Kiriko Glass for free. But LS still doesn't sell, and there is no reason it sells even worse than the 4LS, which is LWB. This basically proves my previous predictions of the 5LS: LWB is a must for China.

As to the GX, it will never be able to sell well worldwide. It never sold well anywhere but in the USA. Not even in the Gulf countries.
This is because it ends up similar to the price of Land Cruiser V8, and who would want smaller car?

It wont help its case that new LC V8 will be even better.

Now LM might be different beast, since it is very different vehicle than LC.

As to the overall BoF line, they seem to be expanding it with their IMV vehicles... and since sales are good with these larger refreshes, I think they will continue to do this for foreseeable future (>10y generations).

ssun30

August sales breakdown available.
#1 NX 5,116 (3,739 Gas+1,377 Hybrid)
#2 RX 4,376 (3,935 Gas+441 Hybrid)
#3 ES 3,705 (3,680 Gas+25 Hybrid)
#4 IS 2,858
#5 CT 1,068
#6 LX 636
#7 LS 471 (147 Gas+324 Hybrid)
#8 GS 291 (145 Gas+146 Hybrid)
#9 LC500h 25
#10 RC-F 19
#11 GX400 1

>>As expected ES had a weak month due to depletion of 6ES inventory and 7ES production ramp. Due to low availability of the 7ES, IS had a shocking month with 2,858 sold! That is more than the number sold from January to July combined. I hope this is a chance for people to appreciate the IS more, although with its meager rear legroom it will not do well in China anytime soon.
>>The NX and RX are gaining momentum. Although it can be clearly seen the RX really needs a more affordable hybrid. Also, NX could use a better pricing structure to move sales away from the base trim NX200 to better optioned 300 and 300h.
>>CT is holding on. 1068 may not sound like a lot, but that is 1/3 of the Mercedes CLA, the sales leader in compact segment. It is not a star but a consistent seller, so I see no reason to kill it and not build a 2nd Gen.
>>LX continues to have a strong showing. China will overtake U.S. as its second largest market this year. It is crazy how good the LX is business-wise for Lexus, with a selling price higher than the LS and even the LC but the cost of a Land Cruiser. GX was taken off the market for half a year now. It could really need another facelift ASAP. There is no reason to sell one GX a month when they could easily sell a thousand. I say this because Toyota sells over 11,000 Land Cruisers (Prado and LC200) a month, which is more than the Highlander. So there is clearly a large market for the premium versions of these two vehicles. I will say this again: Toyota's lack of faith with their BoF product line and the resulting indecision to redesign or refresh is one of the biggest mistakes they've made in this decade.
>>LS keeps struggling despite Lexus offering incentives of up to RMB 150,000. Compared to original post-tariff-drop prices, now one can basically have the Executive Package plus Kiriko Glass for free. But LS still doesn't sell, and there is no reason it sells even worse than the 4LS, which is LWB. This basically proves my previous predictions of the 5LS: LWB is a must for China.

Thanks for this info, much appreciated!!!

spwolf

As to the GX, it will never be able to sell well worldwide. It never sold well anywhere but in the USA. Not even in the Gulf countries.
This is because it ends up similar to the price of Land Cruiser V8, and who would want smaller car?

This would be like saying an ES won't sell because there's Camry. Well, people buy 'overpriced Camry' called ES for a reason. There are more than enough people who are willing to pay over ¥600k for an 'overpriced Prado' so they don't look like a tourist driver. The GX didn't do well historically in China because the 4.6 was subject to a 40% displacement tax pushing its price to over ¥800k. They tried to rectify the problem with the GX400 but that didn't work well because it coincided with the boycotting incident that reset all Japanese brands overnight.

The resurgence of BoF in China is a natural result of the growth of wealth so more middle-class families want a vehicle that can do long road trips, and very fast growth of the private tourism industry. And this is a trend that only happened for less than five years.

The GX only needs a 3.5L V6 engine to thrive here as power is not very important. And there is no worry about the LC200 since it is only available with the 4.0L V6 at ¥600k, while the 5.7L V8 is more expensive than the LS. There is also a geographical preference towards the Prado in the South since roads are so narrow making the LC200 less maneuvrable. The LC200 has different buyer demographics compared to the GX.

If there's any place that has a taste for cars like USA it will be China, and I mean the more developed part of it. I know this doesn't make any sense, but it has been the case after we no longer have to deal with outdated cold war shitboxes. On the other side of the coin is the less developed areas that has similar preferences to Europeans.

ssun30

This would be like saying an ES won't sell because there's Camry. Well, people buy 'overpriced Camry' called ES for a reason. There are more than enough people who are willing to pay over ¥600k for an 'overpriced Prado' so they don't look like a tourist driver. The GX didn't do well historically in China because the 4.6 was subject to a 40% displacement tax pushing its price to over ¥800k. They tried to rectify the problem with the GX400 but that didn't work well because it coincided with the boycotting incident that reset all Japanese brands overnight.

The resurgence of BoF in China is a natural result of the growth of wealth so more middle-class families want a vehicle that can do long road trips, and very fast growth of the private tourism industry. And this is a trend that only happened for less than five years.

The GX only needs a 3.5L V6 engine to thrive here as power is not very important. And there is no worry about the LC200 since it is only available with the 4.0L V6 at ¥600k, while the 5.7L V8 is more expensive than the LS. There is also a geographical preference towards the Prado in the South since roads are so narrow making the LC200 less maneuvrable. The LC200 has different buyer demographics compared to the GX.

If there's any place that has a taste for cars like USA it will be China, and I mean the more developed part of it. I know this doesn't make any sense, but it has been the case after we no longer have to deal with outdated cold war shitboxes. On the other side of the coin is the less developed areas that has similar preferences to Europeans.

GX never had any audience, unlike ES... it is very different.

With next gen LC being considerably better vehicle than current one, I do trully wonder if there is a case for GX as it is today. It works in USA because it is almost 40% cheaper than LC... in the rest of the world, it is same price as LC.

September sales breakdown available.
#1 NX 4,324 (3,218 Gas+1,106 Hybrid)
#2 ES 3,791 (3,785 Gas+6 Hybrid)
#3 RX 3,150 (2,836 Gas+314 Hybrid)
#4 IS 2,402
#5 CT 752
#6 LX 488
#7 LS 446 (134 Gas+312 Hybrid)
#8 GS 245 (136 Gas+109 Hybrid)
#9 LC500h 17
#10 RC-F 14
#11 GX400 2

Total sales is at 15,631, up 37% Y2Y. September is traditionally a weak month, plus the Chinese auto market is shrinking so don't compare the numbers to August directly.

ES is still struggling with delivery, in particular the hybrid. This means IS gets another strong month.

ssun30

September sales breakdown available.
#1 NX 4,324 (3,218 Gas+1,106 Hybrid)
#2 RX 3,150 (2,836 Gas+314 Hybrid)
#3 ES 3,791 (3,785 Gas+6 Hybrid)
#4 IS 2,402
#5 CT 752
#6 LX 488
#7 LS 446 (134 Gas+312 Hybrid)
#8 GS 245 (136 Gas+109 Hybrid)
#9 LC500h 17
#10 RC-F 14
#11 GX400 2

Total sales is at 15,631, up 37% Y2Y. September is traditionally a weak month, plus the Chinese auto market is shrinking so don't compare the numbers to August directly.

ES is still struggling with delivery, in particular the hybrid. This means IS gets another strong month.

Shouldn't that be ES #2 and RX #3?

Joaquin Ruhi

Shouldn't that be ES #2 and RX #3?

I misread the RX numbers as 3,836 gas variants sold. I forgot to change the order after fixing that.

ssun30

...¥600k ... ¥800k.

It always confuses me at first that both the yen and yuan use the same symbol. First thought was that ¥600k was about $6k usd and wondering how that could be overpriced... Then it clicks in my head that it's closer to $90k usd.

I really want to meet those RC-F owners. Must be an extremely exclusive club of 100 people who appreciate that glorious V8.

And of course, I think I've seen two or three GS-Fs out there. Must be extra exlusive considering importing the GS-F is going to cost ¥1.5M, just slightly below the LX and 50% more than a top tier LS or 20% more than the LC Structural Blue.

The extremely slow rate of LC sales gives me hope that I will be able to get a Structural Blue after a few years. China gets 100 of them in total. From what I've seen most LCs on the road are white or red, so I can keep my hopes up.

ssun30

September sales breakdown available.
#1 NX 4,324 (3,218 Gas+1,106 Hybrid)
#2 ES 3,791 (3,785 Gas+6 Hybrid)
#3 RX 3,150 (2,836 Gas+314 Hybrid)
#4 IS 2,402
#5 CT 752
#6 LX 488
#7 LS 446 (134 Gas+312 Hybrid)
#8 GS 245 (136 Gas+109 Hybrid)
#9 LC500h 17
#10 RC-F 14
#11 GX400 2

Total sales is at 15,631, up 37% Y2Y. September is traditionally a weak month, plus the Chinese auto market is shrinking so don't compare the numbers to August directly.

ES is still struggling with delivery, in particular the hybrid. This means IS gets another strong month.

those are very nice sales for Lexus... more ES are coming too.

btw, did I mention lately that NX has 3-4.5 month waiting period in Japan?

spwolf

those are very nice sales for Lexus... more ES are coming too.

btw, did I mention lately that NX has 3-4.5 month waiting period in Japan?

I really don't like how chinese sales analysts always misinterpret sales figures. Like when GAC Honda overestimated demand for the Accord and overdelivered to the dealers, the analysts said 'the Accord is making a comeback and showing the Camry who is the boss'. ES having only 3,791 sales is interpreted as 'the over-hyped king of premium sedan' and 'IS is the dark horse of the year'. It seems none of them cared to think about the fact all new vehicles need a ramp-up period (although to be honest, I really hope this gives the IS a chance to become a steady seller in China).

The NX doing great in Japan is a no-brainer. The NX doesn't have good competition in Japan so it reigns supreme in the 'large premium crossover' segment. I think it's a go-to choice for most families with a little extra wealth. The RX is too big for most customers and is a status symbol of mid-to-high management people, unlike in USA where it is a staple middle class family crossover. This 'vehicle tied to social hierarchy' thing is pretty interesting aspect of their culture, the best part is of course that there are very few 'badge whores' we all hate in China and US.

ssun30

I really don't like how chinese sales analysts always misinterpret sales figures. Like when GAC Honda overestimated demand for the Accord and overdelivered to the dealers, the analysts said 'the Accord is making a comeback and showing the Camry who is the boss'. ES having only 3,791 sales is interpreted as 'the over-hyped king of premium sedan' and 'IS is the dark horse of the year'. It seems none of them cared to think about the fact all new vehicles need a ramp-up period (although to be honest, I really hope this gives the IS a chance to become a steady seller in China).

The NX doing great in Japan is a no-brainer. The NX doesn't have good competition in Japan so it reigns supreme in the 'large premium crossover' segment. I think it's a go-to choice for most families with a little extra wealth. The RX is too big for most customers and is a status symbol of mid-to-high management people, unlike in USA where it is a staple middle class family crossover. This 'vehicle tied to social hierarchy' thing is pretty interesting aspect of their culture, the best part is of course that there are very few 'badge whores' we all hate in China and US.

Dont expect too much from these analysts, they are usually reactionary.

As to the NX, it is surprising that it has 3-4 month wait times this late... it means that demand worldwide is great and that they underestimated Japanese demand and now they dont have an easy choice to raise production so late in cycle. Usually in Japan, everything is front loaded, heavily.

Monthly update for Lexus wholesale figures in China, Oct 2018. Total numbers delivered is 15,666, of which over 40% are 7ES.
#1 ES 6,482 (4,294 Gas+2,188 Hybrid)
#2 NX 3,974 (2,854 Gas+1,120 Hybrid)
#3 RX 2,915 (2,624 Gas+291 Hybrid)
#4 CT 729
#5 IS 488 (ouch)
#6 LS 429 (120 Gas+309 Hybrid)
#7 LX 406
#8 GS 213 (152 Gas+61 Hybrid)
#9 LC500h 16
#10 RC-F 13
#11 GX400 1

ES strikes, sending competitors rout in despair.

Also, numbers for Toyota imports:
#1 Alphard 1,376
#2 Previa 326
#3 FJ Cruiser 118 (They still making these?)
#4 Tundra 54
#5 HiAce 39

*Only the Alphard, Previa, and HiAce are imported through official channels (Alphard by GAC and Previa/HiAce by FAW). Data for certain parallel ('grey') imports only count shipments that reached the shore this month.

So ES had 2200 preorders and addit462611131.html
ts sold in first month of availability.
In contrast Lexus UX was more popular with 5500 preorders.
2/3 of Lexus ES buyers got the most expensive grade "Version L". 15%-20% got the digital sidemirror.
Most popular grade on UX was F sport with 80% of vehicles being that.
November sales of Lexus in Japan was 4700 units. UX shipping commences in December and ES in January.

http://www.namaxchang.com/article/462611131.html
http://www.namaxchang.com/article/462965495.html?seesaa_related=related_article

Good news keeps coming from Lexus China. 16,587 delivered this month marking a 28.6% increase. Right on target to the 160k goal for this year. Meanwhile the entire premium/luxury market in the country keeps struggling amid the auto market recession.

ssun30

Good news keeps coming from Lexus China. 16,587 delivered this month marking a 28.6% increase. Right on target to the 160k goal for this year. Meanwhile the entire premium/luxury market in the country keeps struggling amid the auto market recession.

do we know model breakdown yet?

btw is UX coming soon? What are the prices like compared to the NX, competition?

Most popular grade on UX was F sport with 80% of vehicles being that.

As of today every Lexus I had was an F-Sport model but honestly I didn't feel "right" into buying an F-Sport UX too because I don't like putting togheter the words "SUV/CUV" and "Sport" even though way more "automotive journalists" keep pushing the idea that these kind of vehicles can be somewhat some kind of sports vehicle immune to the laws of physics, that's why I don't feel right having said cars with "sports" accents and seats, harsh suspension to contrast the rolling body and - even if this is not the case on the UX - enormous rims.

I'd prefer Lexus to offer some appearance packet to improve the look of the car without having to resort to buying the F-Sport trim only to have different rims and details (I don't like the non F-Sport grills on some models like the ES for instance) and on the same hand being forced to have specific interior accents and colors.

On my CT 200h the F-Sport model basically is only a cosmetic enhancement because it doesn't offer anything other models have (still 3 drive modes, no specific front seats design, no specific dashboard and so on) and the only specific enhancement is the "F-Sport dampers" and stiffer suspension, but that's ok because as a result the car drives VERY well with zero body roll (I can't say how much better it is if compared with other trims though) but I don't understand why other models can be offered with an optional tuning for the suspension setup, like every other manufacturer does. Anyways pearl white exterior with the red leather interior to me is a killer combo for this car, so that's why I got this specific trim.

Obvioulsy this is my personal point of view and that's why I ordered a Luxury model (Version L in Japan), even if I'd have appreciated having the AVS suspension and metal covered pedals. :relieved:

spwolf

do we know model breakdown yet?

btw is UX coming soon? What are the prices like compared to the NX, competition?

As always model breakdown will follow two weeks after initial numbers are posted.

UX is for next year. No price info yet. Competitions include the X1L (yes they even stretch the X1), Q3L, GLA, and XC40, all four are made locally. Also no info on whether CT will be discontinued when UX lands.

ssun30

As always model breakdown will follow two weeks after initial numbers are posted.

UX is for next year. No price info yet. Competitions include the X1L (yes they even stretch the X1), Q3L, GLA, and XC40, all four are made locally. Also no info on whether CT will be discontinued when UX lands.

CT is staying everywhere but in the USA... dont worry about that.

Lexus EU has stated multiple times... and also volume wise, it makes no sense to limit it to EU and Japan only... it will sell great where Corolla Hatch sells ok.

krew

Lexus China Sales Up 24% Year-Over Year

New sales record set with December left to go.

View the original article post

Amazing keep posting good numbers this year, wonder what are the numbers of VAG compared to TMC Y2Y?

maiaramdan

Amazing keep posting good numbers this year, wonder what are the numbers of VAG compared to TMC Y2Y?

VAG sells 4m in china... overall they are growing little bit faster worldwide... a lot less profitable though.

And how about TMC numbers Y2Y ?

maiaramdan

And how about TMC numbers Y2Y ?

https://dailykanban.com/2018/11/ami...est-automaker-in-october-by-a-very-thin-hair/

Thanks a lot