World: Lexus’ key potential growth market is still the US
* See the Premium brands US sales over the last 3 years by clicking on the title! *
Yesterday Mark Rechtin from Automotive News wrote a very interesting article about Lexus’ potential worldwide, so I thought I’d mention it here and add a few bits and pieces. Lexus started as a US-only brand in 1989 and by 2000 it recorded its one-millionth vehicle sold in the US and ranked as the #1 premium brand there. Since then it has expanded worldwide into 86 countries including Japan where it launched in 2005. With China the biggest car market in the world now and Russia and Brazil on fire, you’d expect Lexus’ biggest growth potential would reside in one of these countries… Not so.
Lexus global product marketing chief Mark Templin said “China will be enormous, and India and Brazil are growing like crazy, but they’re not comparable to the US types of numbers.” So the biggest opportunity remains the United States for Lexus, which had managed to be the best-selling premium brand for 11 straight years up until the acceleration and tsunami crisis brought it down to #3 in 2011 when BMW took a short lead over Mercedes.
Lexus peaked at 329,177 sales in 2007 but dropped to 198,552 in 2011. Sales are up 23% so far in 2012, but Mercedes is up 12%, leading the pack by just 1,849 units over BMW, up 10% year-to-date but a huge 45% in November. BMW could still claim the premium crown for the 2nd year running by the time 2012 comes to an end… Back to Lexus for whom getting back to 300,000 annual sales represents a 60,000+ sales potential.
This year the Lexus GS (+443%) and ES (+33%) have pulled the brand up in the US, however Jim Lentz, CEO of Toyota Motor Sales USA, says “We have been stuck in a vise between Mercedes and BMW with their currency advantage. With the strong yen and soft euro, they have shown they are willing to spend on incentives.”
See the Top 3 premium brands sales in the US over the last 3 years below.