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Lexus About To Be Dethroned As Luxury Market King

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On: Sat, Jul 30, 2011 at 8:51AM | By: Chris Weiss


Lexus About To Be Dethroned As Luxury Market King

For 11 years, Lexus has enjoyed a role as the United States' leader in luxury car sales. Maybe it's because Lexus compares favorably to other options, maybe it's because you don't exude such an image of douchery in a Lexus as, say, a BMW, or maybe it's just because us Americans love us some Japanese automobiles. Whatever the case, Lexus has long been king.

But Lexus' reign is about to end. And all it took was a natural disaster of record proportions to bring it crashing down.

According to Reuters, Lexus' sales are set to slide some 17 percent down to 190,000 vehicles during the course of 2011. While Lexus was able to weather the 'Great Recall Debacle of 2009-2010,' it couldn't quite weather... the weather. March's earthquake, tsunami and power problems are still being felt in Japan and all but one of Lexus' vehicles are built on the island. Production has been pushed well off schedule and dealers here in the United States have run out of certain models to sell. Dealers stocks are about half of normal levels.

Meanwhile, European competitors have already passed Lexus in terms of half-year sales and are on schedule to finish the year well ahead of Toyota's luxury brand. It will be a race to the finish line between BMW, which sold 113, 705 vehicles through June, and Mercedes-Benz, which sold 110,926. Both numbers compare quite favorably to Lexus' 88,010 and it's clear that a German will be king of U.S. luxury. Both brands are up in year-over-year sales.

Lexus Division general manager Mark Templin downplayed the significance: "Whether we're number 1 or not, I don't care. We've never focused on that. We won't change our plan midyear because someone else is selling more cars than us."

Yeah, automakers tend to only care about titles when they're winning them and writing press releases about it.

Templin added an optimistic note: "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."

So perhaps it will be back at the top next year. However, some analysts feel that Lexus' problems run deeper than temporary tsunami setbacks, speculating that the brand has grown stale with a less attractive product line and aging consumer base.




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