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Sunday, June 7, 2009

Lexus Slowly Losing Sales Crown to BMW?




Since 2000, Lexus have been the best selling automotive luxury brand in the U.S., still the largest luxury car market in the world by sales volume. But the bull run of giant Toyota Motor Corp's luxury arm could be slowly coming to an end.

German archrival BMW have been fighting back with a series of strong products and marketing campaigns and for the third month in a row, BMW have outsold Lexus. Total sales for the 5 months of this year for BMW is 76,819 units against Lexus 73,186 units.

Toyota is often quoted saying that Lexus is about providing an exclusive ownership experience and not about chasing sales volume. And that being at the top of sales charts is never the goal of Lexus. Everytime I read / hear about these quotes get an uneasy feeling that someone is trying to pull my leg in some "zen-like" Japanese way. I mean let's be honest with everybody - Lexus is a luxury division of Toyota Motor Corp for goodness sake. How is it possible for something under Toyota NOT be made to chase sales volume? Everything about the Big T's corporate mentality have always been conquering the sales chart. Details of every single Toyota model is closely researched, backed up with extensive list of survey data and every single model grade is created to expand its sales potential. There is not even an inch of space within TMC's corporate headquarters to consider for anything emotional / enthusiastic (think RWD, two-seater light roadster) but won't significantly raise the company's total sales.

I can understand when Ferrari / Lamborghini or even Rolls-Royce say that they are not interested in the volume game as the less they sell the better it is for their brand. But those rare exotics are handcrafted, with unfinished cars being pushed around in their jigs by artisans. Most Lexus models on the otherhand, roll out of Toyota's highly robotized plant in Tahara, Japan. You can't just slowdown the production / reduce shift hours in a mass production plant without significantly affecting your bottom line. Even Porsche needs to struggle to sell close to 100,000 units worldwide to stay afloat. Why else would they need something a hideous as the Cayenne? Same goes to BMW - having to plug every single available niche with oddballs like X6 and the new 5-series Gran Turismo in a bid to raise the group's total sales volume.

It is just very pretentious to be a mainstream luxury brand and then go on saying that you are not interested in sales volume.

But if one understands anything about Lexus / Toyota - one should realise that the biggest mistake one can do is to sit back and laugh at their little triumph over Big-T. Toyota might not have the best products but with its financial muscle and Japanese government backing them "indirectly," they can easily muscle their way through any market barriers to regain the top spot. Whatever Toyota wants, Toyota gets. Sooner or later they will achieve their aim, either with the current model or by the next model change. It's just a question how much effort and money do they want to throw in to achieve the goal. There aren't many manufacturer who can claim that kind of history in their business. Credit when credit is due - you have to take your hats off to the management of TMC. BMW is not going to hang on to this easily.

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