Bloomberg News

Toyota’s Lexus Says U.S. Sales Behind Target on BMW Rivalry

October 11, 2012

Toyota Motor Corp. (7203)’s Lexus, dethroned in 2011 as the best-selling U.S. luxury auto brand, said it may miss its U.S. sales target this year amid increased competition from Bayerische Motoren Werke AG. (BMW)

Sales in the U.S. are “slightly behind” their target, according to Kazuo Ohara, executive vice president for Lexus. The introduction of the ES model in August may help the automaker boost sales in the rest of the year, he said.

“Toward the beginning of the year, we’d targeted sales of 250,000 units, but to be honest, that’s looking to be tough,” Ohara said in an interview following a press briefing in Tokyo today. “We just recently introduced the ES, so we may be able to catch up toward the end of the year.”

Increased competition for Lexus in the U.S., the luxury brand’s largest market, adds to the challenges faced by Japan’s largest automaker. Toyota this week reported its biggest drop in China sales since at least 2008 and announced a recall for about 7.43 million Toyota-badged vehicles for a faulty power-window switch.

Toyota, which also lost its title as the world’s biggest carmaker to General Motors Co. (GM:US) last year, is targeting a rebound in 2012, forecasting sales -- including those of subsidiaries Hino Motors Ltd. and Daihatsu Motor Co. -- to rise 23 percent to a record 9.76 million units. Regaining market share for Lexus, which had led U.S. luxury sales for 11 years, is a priority because its vehicles fetch higher prices than Toyota-brand cars.

U.S. Sales

The annual target for Lexus sales in the U.S. is 46 percent higher than deliveries in the first nine months, which reached 170,990, according to estimates at research firm Autodata Corp.

BMW, based in Munich, topped the U.S. luxury auto market last year with 247,907 deliveries, followed by Daimler AG (DAI)’s Mercedes-Benz with sales of 245,192 vehicles. Lexus sales reached 198,552.

This year, Mercedes is leading the market with sales of 191,618 vehicles through September, a 13 percent increase from a year earlier. In the same period, BMW has expanded sales by 4.9 percent with sales of 186,397 units.

In China, Toyota deliveries tumbled 49 percent last month, as consumers shunned Japanese-brand cars after violent protests erupted in cities over the group of island known as Senkaku in Japanese and Diaoyu in Chinese.

Toyota and Honda reported damage to dealerships from fire, while TV footage showed overturned Japanese cars and window shields smashed by demonstrators in some cities.

Lexus has “no choice but to cut back” on sales promotions as they won’t have much impact in the wake of the anti-Japanese sentiment, said Ohara.

“I know the protesters don’t represent the whole of China and I’m sure there are customers who want to buy Lexus cars,” he said. “Think about the car getting damaged. The concern over this would lead people to refrain from buying our cars.”

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net;

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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