Lexus Set to Lose Top Spot in U.S. Luxury Market

Lexus Set to Lose Top Spot in U.S. Luxury Market

In the U.S., after an almost ironclad reign of more than a decade, Lexus is set to lose its position as the best-selling luxury car brand. And this news comes straight from the horse’s mouth.

Mark Templin, Lexus Division General Manager in the U.S., said that sales of the brand’s vehicles will drop to around 190,000 units during 2011, a fall of some 17 percent from last year. He said that the reduction in volume is largely attributed to the earthquake and Tsunami back in March, which severely hampered Japanese automobile production. All Lexus models sold in North America, bar the RX350, which is built in Cambridge, Ontario, Canada are sourced from Japan.

Dealers were down to about half their usual stock in June, resulting in overall sales plummeting by around 38 percent, however with production at plants in Japan essentially back to full strength, and RX production, bar the hybrid said to reach 100 capacity by September, things are apparently looking up.

“June was the trough, and we’ve turned the corner. We see the rest of the year being much better for us,” stated Templin, during an address to reporters in Chicago.

As Lexus sales have dropped, other luxury car makers, especially those from Germany, have been picking up the slack. In fact, by the end of this year BMW is on target to become the best-selling premium nameplate in the US, marking the first time it has beat out Lexus since 1997. While the latter sold 88,010 in the first half of 2011, the Bavarian automaker shifted some 113,705.

As to whether Lexus will regain the top spot, Templin said that wasn’t the brand’s focus, “whether we’re No. 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.”

That said, there are those, particularly industry analysts who think that in the coming years it might be harder and harder for Lexus to remain among the top selling luxury brands, citing an aging customer base and products that don’t resonate with younger buyers being two major factors for a decline in market share.

Aaron Bragman of IHS Automotive Insight, believes that even at full capacity, the brand will struggle to stay in the top spot. “Like Toyota, they’ve lost their momentum,” he says. “A a lot of their dealers are afraid they will become the next Buick.”

[Source: Automotive News]

  • lucifer

    They were on route of losing that title before the disasters – this just gives them a convenient excuse. & of course now they being #1 is not a big deal but the last 2 years when they were in danger they pulled out the incentives to keep the lead.