agent Entrepreneur logo
MenuMENU
SearchSEARCH

Lexus Chief Predicts Weak Sales

November 2, 2011
3 min to read


NAGOYA — The head of Toyota Motor Corp.'s Lexus brand said global sales of the upscale vehicles will likely fall short of last year's total, with the brand set to lose its long-held status as the No. 1 luxury car in the U.S.


"We would have ended up at the same level as last year, but now we're probably going to be short," Lexus marketing and product planning general manager Karl Schlicht said in an interview.

Ad Loading...


He blamed the likely fall on a combination of natural disasters in Japan and Thailand, a stronger yen against the dollar and tougher competition in the luxury market, reported The Wall Street Journal.


In 2010, Lexus sold 410,000 vehicles globally, of which 229,000 were sold in the U.S. That was down from the brand's all-time peak global sales of 518,000 vehicles in 2007, including a record 329,000 in the U.S.


Last month, its U.S. Lexus Division's sales fell 14.2 percent from a year ago to 18,092 vehicles. Through Oct. 31, total U.S. Lexus sales were 153,739, down 16.2 percent from the same period a year ago, compared to BMW AG's 246,888 vehicles.


Mr. Schlicht, the first non-Japanese manager to run Lexus, acknowledged the division is likely to relinquish its longtime position as the top-selling luxury brand in the U.S.


"To be honest, the competition has gotten stronger, but I don't think it's fair to say we lost the crown this year just because of that," he said, noting production lost due to Japan's March earthquake and the current flooding in Thailand.

Ad Loading...


Mr. Schlicht said there are no plans to move production of Lexus vehicles from Japan to markets such as the U.S. to cope with the yen's surge to recent all-time highs.


But he indicated that could happen eventually if the Japanese currency stabilizes at the current elevated levels or strengthens further.


"Clearly [Toyota] management understands that if this persists or gets worse we may have to move some production" offshore, he said.


Currently, all Lexus models are made in Japan with the exception of some RX crossover sport utility vehicles sold in North America, which are produced in Ontario, Canada.


A higher yen erodes the value of dollar-denominated profits and makes Japanese exports less competitive overseas.

Ad Loading...


Mr. Schlicht said the fall from No. 1 in the U.S. will give Lexus some "breathing space" to prepare for new cars, such as a remodeled GS midsize sedan, noting the brand hasn't introduced a full-size sedan since 2007.


"In some ways, it's kind of a relief that allows us to change the brand direction a bit and refocus on the next generation of cars without having that heavy burden" of being the luxury sales leader in the U.S., Mr. Schlicht said.


The GS, due in showrooms in February, will showcase edgier styling—such as a new front grille with spindles—and a sporty ride, which Toyota hopes will help the brand appeal to younger drivers.


Noting that the average age of Lexus buyers is older than competing brands globally, Mr. Schlicht said the brand is positioning itself to broaden sales beyond the baby boomers that have been its core demographic.


"We're trying to target a different kind of buyer to prepare for the next generation," he said.

Ad Loading...


While the U.S. is by far the biggest market for Lexus, Mr. Schlicht said that he is encouraged by positive sales trends in China, Europe and Japan.


He noted that the new CT hybrid compact has done well in Europe and Japan, and said China was on track for a record year before the natural disasters disrupted supply.


Last year, Lexus sold 53,000 vehicles in China, 33,000 in Japan and 31,000 in Europe—its top three markets outside of the U.S.


Mr. Schlicht also said Lexus needs to broaden its lineup with more sporty two-door vehicles and hinted a successor to the discontinued SC coupe may be on display at the North American International Auto Show in January.

More Industry

Group photo of men outside storefront.
Industryby Hannah MitchellMay 28, 2026

Pennsylvania Dealership Under New Retailers

The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.

Read More →
Hallway with lockered wiring and computer
Industryby Lauren LawrenceMay 28, 2026

Battery Storage Takes Priority Over EVs

U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.

Read More →
Gray-scale photo of a line of Mini cars in a dealership parking lot
Industryby Hannah MitchellMay 27, 2026

Auto Dealers Feel Better But Not Great

A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.

Read More →
Ad Loading...
Closeup photo of the front of a white car
Industryby Hannah MitchellMay 21, 2026

New-Vehicle Sales Picture Relative

A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.

Read More →
Nissan logo on front of building
Industryby Lauren LawrenceMay 21, 2026

Auto Group Acquires Third Nissan Rooftop

Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.

Read More →
Couple talking with auto salesman next to new car inside dealership
Industryby Hannah MitchellMay 20, 2026

April Less Affordable

Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.

Read More →
Ad Loading...
Wooden people figures of different colors in a row, similar to board game pieces
IndustryMay 20, 2026

Building an Extraordinary F&I Agency

Work to determine your specialized talent, because that fact will determine everything about your agency’s future.

Read More →
Ingredient card, policies and procedures, fixed operations, variable operations, data security, audit
Industryby Jim GantherMay 19, 2026

Recipe for Compliance

The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.

Read More →
Photo of new Chevrolet Bolt parked on a beach
Industryby Hannah MitchellMay 14, 2026

EVs Getting More Attractive

A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.

Read More →
Ad Loading...
Benchmark bar graph showing April 2026 EV Sales
Industryby Lauren LawrenceMay 14, 2026

EV Sales Drop in April Following Surge

North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.

Read More →