Lexus Not Aiming for Top Luxury Brand Title
Lexus’ objective is to focus on its customers and retain its top J.D. Power quality and customer satisfaction ratings rather than be the No.1 luxury brand, a top executive says.
BIRMINGHAM, MI – Lexus is not getting caught up in a U.S. luxury sales race that has BMW and Mercedes-Benz aggressively vying for the top spot, a top executive says.
BMW and Mercedes “seem to be in this focused battle for No.1,” Tim Morrison, says at a media event here. “Our focus is to continue the J.D. Power rankings we have, which is No.1 to the customer.”
Lexus currently holds the top spot in J.D. Power’s Initial Quality Survey, Vehicle Dependability Survey, Customer Satisfaction Index and Sales Satisfaction Index.
BMW led 2011 U.S. luxury sales with 247,904 units, according to WardsAuto data. Mercedes placed second with 245,173, while Lexus was third with 198,552. Through August, Mercedes set the pace with 168,463 deliveries, followed by BMW with 164,636 and Lexus with 150,604.
Lexus for years was the top-selling U.S. luxury brand, besting Mercedes and BMW from 2005-2010. But last year’s earthquake and tsunami in Japan slashed Lexus inventories, leaving BMW and Mercedes to battle for the top spot.
Morrison says Lexus is more concerned about its own brand and keeping customers satisfied.
But with inventories now near normal, the brand is looking to grow sales with a number of new or refreshed vehicles, including the LS flagship luxury sedan shown to media members here.
For the ’13 model year, the LS gets new sheetmetal and a number of other refinements, including increased body rigidity and improved steering.
The LS lineup is powered by a 4.6L V-8 producing 359 hp and 367 lb.-ft. (497 Nm) of torque. The sedan comes in four configurations: the LS 460 base model, LS 460L with an extended wheelbase, LS 600 hL hybrid and the first-ever performance-oriented LS 460 LS F Sport.
Lexus currently offers F Sport versions of its CT, IS, GS, LS and RX models. On the LS, Morrison predicts the F Sport will account only for about 10% of the 2,000 units the auto maker projects it will sell monthly.
But he says the LS 460 F Sport, which features a throaty exhaust note, more aggressive-looking sheetmetal, sporty interior, lower ride height and sport-tuned suspension, will help attract new customers to the Lexus brand.
“F Sport is changing our image,” Morrison says, noting F Sport models tend to attract more young male customers than do other Lexus offerings. “The buyers in that segment are looking for more driving dynamics and like to hear the (exhaust). It won’t be huge volume, but I’ll take some.”
Even with new models such as the ’13 LS and the expanding stable of F Sport nameplates, Morrison isn’t projecting huge sales growth this year, noting the luxury segment has not kept pace with rebounding non-luxury segments following the global recession.
During economic downturns, the luxury segment generally is more resilient than non-luxury segments, because most wealthy buyers retain the means to buy new vehicles.
Circumstances are different in today’s market, however, as non-luxury buyers contending with aging vehicles are purchasing new models out of necessity, while luxury consumers are wary about European economic woes and a still-shaky U.S. economy, Morrison says.
“Luxury customers are insulated (from economic fluctuations), but the lower-end (luxury segments) are a little more affected,” he says. “Before, in markets like Las Vegas and California, a lot of people were using home equity to get into luxury. But those days are gone.”
According to WardsAuto data, non-luxury light-vehicle sales through August climbed 15.1% to 8,542,490 units, while luxury-brand deliveries rose 12.4% to 1,136,787.
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