• Jul 25, 2010
2010 Mercedes-Benz E350 Sedan - Click above for high-res image gallery

After a decade at the top of the U.S. luxury vehicle sales charts, Lexus may soon be unseated by the previous leader, Mercedes-Benz, as well as BMW. While Lexus sales have been recovering this year from the dismal first half of 2009, Mercedes-Benz has been climbing even faster.

One possible reason for this disparity is the string of recalls Lexus has been hit with this year, including accelerator pedals, floor mats, leaking gas tanks and defective valve-springs. Another reason is the sales strength of Mercedes' updated bread-and-butter vehicles, including the new E-Class.

In June, Lexus sales were up just 2.7 percent compared to 25 percent and 15 percent for Mercedes and BMW respectively. Unless Lexus cleans up its act quickly and manages to convince customers that its quality problems are behind it, Toyota's premium brand could fall behind both German brands.



Photos by Drew Phillips / Copyright ©2010 Weblogs, Inc.

[Source: Bloomberg]


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    • 1 Second Ago
  • 64 Comments
      • 4 Years Ago
      Don't forget the bland styling. From a distance their flagship sedan LS looks like a Camry.
      • 4 Years Ago
      Lexus' price range runs right up there with BMW and AUDI. MB is usually more expensive.

      Thing is, its still a luxury price range and people buying new cars/ leasing in that range can afford any car int hat range they want. It comes down to personal prefference.

      Thing is, LEXUS hasn't introduced anything groundbreaking in a long time. TheLS460 is long in the tooth. The LS600 is way too expensive when you could get an S400, and the HS models met with lukewarm approval.

      Add Toyota reliability issues and a brand new SUV recalled (Lexus') and you've got a disaster on your hands. Lexus is gonna end up like GM.
      • 4 Years Ago
      Really?

      Did we all forget about Cadillac? Not a single mention thus far?

      I think the people who bought Lexuses in the early 90s or at least the type of people who bought Lexuses were the value-conscious people who noticed that Lexus offered a more economical luxury car. These people now probably buy Cadillacs and Hyundais and Ford Tauruses and Toyota Avalons or maybe even they buy more pedestrian cars now since even a mediocre car now a days is a good car (think of the Chevy malibu, it's a great car but its competition is insane, the Fusion, Accord, Sonata, Camry - how can you win against that?). In the mean time, Lexus is falling out of vogue. BMW and Audi have brand identity crisis. And Mercedes is making conquests from all three while retaining its already sizable fan base.
      • 4 Years Ago
      I had not idea Lexus was the leader in this segment - surprised, very surprised.
        • 4 Years Ago
        they are #1 in the US because they are cheap, the rest of the world doesn't care about Lexus.
        • 4 Years Ago
        They've been #1 for 10 years straight now, so Lexus is going to try really hard to hold onto their streak. It's almost a perfect 3 way tie so far this year in sales so it's definitely going to be interesting.
        But with the IS and ES both being old now it's probably harder than usual to sell quite as many units. Once they roll out updated models they'll probably regain a sizable lead in sales again.
      • 4 Years Ago
      I doubt Lexus's quality reputation is the cause of their slip. They're resting on their laurels of quiet, cushy and geriatric admiration, while the competition is getting more reliable, more serious and just plain more. Another ignored part of the equation is Hyundai's latest foray into the luxury market. Think Lexus circa 1989, the came onto the market and stole a lot of the stayed luxury brands' thunder, with a well thought and reliable car, that undercut the competition. Now that Lexus is the stayed brand, Hyundai is set to take their place and even sales from the German. Hyundai's got a good template on how's it's done, but they haven't left out the dynamics either. It's 2010 and car manufacturing isn't about reliable anymore, that has to a given now-a-days. If you plan on overtaking the competition, you have to be better or just as good with a cheaper price tag.
        • 4 Years Ago
        Couldn't disagree more.
        Although you'd never know it by reading Autoblog and the buff books (Road & Track, MT, Car and Driver), the reason Lexus overtook Mercedes and BMW in the first place is because of QUALITY. Reliability, that is. The German luxury brands have been overpromising and underperforming on this point for decades. That left an opening for Lexus, Acura, and Infiniti to offer an upscale product that is actually more reliable than an average car.
        Most luxury car drivers are not the kind who buy vehicles based on zero to sixty numbers, skidpad grip and lap times. They want a car that's *better* than average, and that includes build quality and the feeling of richness. Lexus came in with better build quality and richer feeling interiors.
        Although you Generation Xers don't realize this, before Lexus came to market, the average Benz had all the interior charm of a coal bin; hard plastics, drab dashes, and spartan interiors. Lexus countered with cabins rich in soft touch leather and more aesthetically appealing hues and the Germans followed suit when their sales dropped.

        Now that Lexus has been hit with so many recalls in such a short period of time, their quality edge has been lost and that was the primary reason for their success. They have lost their way as a brand and are paying the price.
        • 4 Years Ago
        Lexus' quality/safety problems are a HUGE reason for their recent sales issues. "Image" is a major factor in the purchase of any luxury brand and when that brand is tarnished, for whatever reason, it can significantly impact sales.
      • 4 Years Ago
      This will probably be good for Toyota in the long run, they got too ambitious and the quality suffered.
      • 4 Years Ago
      This article incorrectly makes the argument that Lexus is losing luxury market share due to poor quality. Fact is, Lexus simply makes a bunch of boring old man sedans. All of their vehicles look nearly the same and simply do not inspire any excitement. All attempts at a decent looking coupe after the SC300 and SC400 have fallen flat. In fact, I was quite surprised to hear that BMW didn't already sell more vehicles than Lexus.

      I have full confidence in the quality and workmanship of Lexus vehicles. They simply don't make anything I find attractive. The IS comes close, but the coupe has that bizarre low cut roof with gun slit windows. While I love the mechanics and drive trains of Lexus, the huge deal breaker for me, as with most other luxury vehicles, is the sweaty leather and gawdy wood grain. I simply do not want leather in this Texas heat. And if I pay that much money for a vehicle, I should have a lot more choices as to interior fabrics and trims. I would love an interior of Alcantara or micro-suede. Also give me some brushed aluminum or carbon fiber interior trim. Why can't I have choices?

      • 4 Years Ago
      I'm sure the much-needed engine updates next year will give Mercedes a big boost.
      The C-Class is a great car in almost all aspects except that the engines could use some more power. That new 3.5L V6 can't come soon enough.
      • 4 Years Ago
      I hate the new E-Class. Massive rear overhang, pinched nose...it looks in places like it was designed by Salvador Dali. Same with the M-Class.

      And then they go and fuss up the styling further by giving the silly thing 4 fog lights.

      But it's definitely better and more interesting than what Lexus has to offer. I'd take a Buick over any volume Lexus any day.
      • 4 Years Ago
      This is just a gaffe. I'm far from a Lexus fan. In fact, I hate their existence. However, I highly doubt Mercedes or BMW will best Lexus for top standing for one reason alone: price. Lexuses are on average cheaper than a comparable (in fit and finish, not power and precision) Mercedes and BMW. And we all know well how Americans prefer comfort (in the name of cupholders and infotainment) over genius power.
      • 4 Years Ago
      Looks like the wheels came off "The Relentless Pursuit of Perfection."
      • 4 Years Ago
      @FT,
      Clearly you don't understand the car/leasing business. Just because a manufacturer isn't openly promoting a lease deal on a particular model does NOT mean it can't be leased. If a lease offer isn't being promoted it's often because that particular model isn't selling well, is being discontinued, replaced soon, etc. and therefore has a poorer resale value making it uncompetitive as a lease offer. Manufacturers try to only promote leases that will be attractive to potential customers. They don't want to scare customers off by advertising a "bad" lease deal.

      Also, you are mistaken if you think that most people who lease cars do so because of a tax advantage. That is simply not the case.
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