How Toyota’s Lexus Overtook BMW In The U.S. Luxury Market
Toyota Motors ‘s (NYSE:TM) luxury brand Lexus ended 2015 as the third highest selling luxury vehicle brand in the U.S. auto market. The U.S. luxury market is the second biggest luxury market in the world, but its performance in 2016 has been sub-par. Apart from Mercedes-Benz and Lincoln, sales of the luxury brands of all major auto makers have declined on a year-over-year basis in this year. Lexus has met with the same fate, but its performance in the luxury SUV market has meant that it has overtaken BMW as the second highest selling luxury brand in the U.S.
Lexus ended 2015 with just over 344,600 units sold, a 10.7% year-over-year increase. BMW ended 2015 with 346,000 units sold, a 1.9% year over year increase. So far in 2016, Lexus has seen its overall sales decline by 4.7% while BMW has seen its sales decline by 9%. This has meant that Lexus is now the second highest selling luxury brand in the U.S. luxury market in 2016. However, if one breaks down Lexus’ sales performance in 2016, Toyota’s luxury brand has seen its car sales decline by 18.2% compared to 2015. The worrying thing for Lexus is that sales of almost all car models of the brand have declined in high double digit rates. In contrast, Lexus’ SUV sales have increased by 6.5%. Luckily for the brand, it has been able to grow the sales of its highest selling model the SUV RX by 8% and the sales of the SUV NX by close to 20% bring it close to being the second highest selling car model for the brand.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Toyota Motor
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