• Apr 26, 2011
Lexus has been the king of luxury car sales in the U.S. for over a decade, but Toyota's high-end brand will likely lose its crown in 2011, due at least in part to the March 11 earthquake in Japan.
Certainly, Lexus was already facing a great deal of pressure from rivals like BMW and Buick, but Automotive News reports that Toyota VP and Lexus Group Manager Mark Templin says dealers are down to a 30-day supply of most models, and that vehicle shortages will be felt as early as this week. The problem is that some key components from Japan come from plants that are still shut down as a result of the March 11 earthquake and tsunami. The Lexus CT 200h is reportedly close to sold out due to the issues.

Further complicating matters is the fact that Lexus ramped up the leasing business three years ago, and those customers will soon be bringing back their luxury rides in large numbers. That's good news for dealers looking for products to sell, but it's bad for customers who may not have the ability to purchase a new Lexus model.

The automaker is looking to ease this issue by offering six-month lease extensions. At the same time, Templin knows many customers will simply purchase their lease vehicle outright, and he's asking dealers not to gouge those customers. The fear is that a shortage of models will result in more demand than supply, which could then jack up the price of Lexus models to unreasonable levels.

Since the automaker appears to be out of the running for the 2011 luxury sales crown, it seems natural that Lexus will come back with a vengeance in 2012. But Templin says the automaker may never again grab the sales crown, since luxury car makers are aiming down-market to improve corporate fuel economy averages. Templin opines that it won't be long before a luxury car maker hits 500,000 sales in a year.

[Source: Automotive News – sub. req.]


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  • 19 Comments
      styxmiko
      • 3 Years Ago
      1. First of all Lexus will not lose the luxury sales crown ...WHY because it never had it!!! unless it crowned itself like Napoleon did. 2. Even when they were new the Lexus line liked prematurely dated and mundane...not what you would call a design fit for a luxury brand. 3. If it would not be for the lack of taste of the American Lexus buying puublic, lexus wouldn't even exist as a brand. 4. Bad reputation from the endless recalls from toyota affected directly or indirectly the lexus brand 5. Buick with its fresh and very good looking designs and superior quality took a big slice off of the lexus sales. 6. The earthquake is just making their situation worse.
      cpmanx
      • 3 Years Ago
      OK, let's get the pedantic stuff done with first. You are both right about the Richter Scale. The intensity of shaking is a straight logarithmic scale: a magnitude 9 quake is 10 times the shaking intensity of a magnitude 8 quake. The *total energy*, however, scales as the 1.5 power of the shaking amplitude: a magnitude 9 quake is 10**1.5 (or about 32) times as energetic as a magnitude 8 quake. But of course, neither of these has anything to do with the falloff of Lexus sales. The brand has a stale product line (many near-simultaneous intros several years ago means several aged vehicles now), dull styling (just look at that painful GS concept at the NY Auto Show), and a stunning decline in cachet. My 73-year-old mother--hardly a car nut or social snob--recently sniffed that the people who buy Lexuses today are a lot like the people who used to buy Cadillacs. She did not mean that as a compliment.
      avinash Machado
      • 3 Years Ago
      Not surprising.
      Audidodee
      • 3 Years Ago
      "Lexus was already facing a great deal of pressure from rivals like BMW and Buick" Yeah. Right. Like people actually cross-shop Lexus and Buick.
      John
      • 3 Years Ago
      Really? Lexus was stumbling well before the quake. Toyota's lapse in quality along with major recalls started the trend of slipping sales for Lexus. Lets talk about stale models, and the median buyer's age creeping up. Lexus has tried twice with Luxury Hybrid autos (CT and HS), both of which are underwhelming as vehicles, and the sales show just that. There are plenty of competitors out there with better products. Lexus always had quality and realiability on it's side, now they are on par or below with the competition as well as having uninspired designs, driving manners, and overall image. BTW Buick is crossed shopped with Lexus. If not every auto mag/site is way off base to compare the ES350 to the LaCrosse...
      MPG-Linked-In
      • 3 Years Ago
      Lexus was losing share LONG before the quake. How convenient to use a disaster of this magnitude to cover your failures as a company. Why not sell all those cars that are sitting stateside on the dock and at dealers before crying about a supply issue? Pathetic and this clown should be fired for making such a piss-poor excuse.
      Hazdaz
      • 3 Years Ago
      Sure... its the earthquake that has made you guys lose the title. Uh huh. Yup. Corporate spin is corporate spin.
      • 3 Years Ago
      [blocked]
      :)
      • 3 Years Ago
      I guess building boring looking girly cars and covering up huge service issues had nothing to do with it? Hmmmm
        Dest
        • 3 Years Ago
        @:)
        And still beating everyone except Mercedes :)
      rmkensington
      • 3 Years Ago
      The autoextremist had an article about this recently. They were already losing their market share to BMW & Mercedes. AE said that Mercedes was within about 5000 cars of Lexus which is pretty significant. This was pre-earthquake too. http://www.autoextremist.com/
      • 3 Years Ago
      [blocked]
      Fardinand7
      • 3 Years Ago
      Should be interesting to see the impact of the new models that are gunna roll out then, new design, new interior.exterior what will the market do indeed.
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