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Toyota's Lexus Widens Luxury Sales Lead Over Mercedes, BMW

November 3, 2010
3 min to read


Toyota Motor Corp.’s Lexus, buoyed by consumer discounts, beat out Daimler AG’s Mercedes-Benz and Bayerische Motoren Werke AG’s BMW brand in October to lead monthly U.S. luxury-auto sales for the first time since May, reported Bloomberg.


Lexus sales rose 8.1 percent to 21,091 vehicles, the Toyota City, Japan-based automaker said yesterday in a statement. On Nov. 2, BMW reported a 17 percent gain to 19,272 and Mercedes posted an increase of less than 1 percent to 18,351.

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Lexus, the top-selling U.S. luxury brand since 2000, is being challenged this year as Toyota copes with record recalls and as Mercedes and BMW benefit from new models. Lexus more than doubled average incentive spending in October to $2,152 a vehicle from $923 a year earlier, according to TrueCar.com, an auto pricing website.


The Toyota unit has been “much more aggressive than they’ve ever been,” Jim O’Donnell, president of BMW’s North American unit, said in a telephone interview. “We’ve now got Lexus joining the fray where they’ve always stood on the sideline and sort of watched.”


U.S. sales for this year through October totaled 183,529 for Lexus, 178,080 for Mercedes and 176,736 for Munich-based BMW, the global leader in luxury-vehicle deliveries.


The totals don’t include non-luxury models such as BMW’s Mini cars or Stuttgart, Germany-based Daimler’s Smart cars and Sprinter vans.


Toyota’s incentive spending and increased advertising in October helped boost Lexus sales, Jesse Toprak, vice president of industry trends at Santa Monica, California-based TrueCar, said in a telephone interview yesterday.

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“They clearly want that No. 1 spot for the year,” he said. “Don’t know if that necessarily is going to happen. Looking at the historical sales in December, Benz tends to do quite well. I think it’s going to be a photo finish.”


The Toyota unit used “moderate incentives” to help trim inventory, Mark Templin, U.S. group vice president for Lexus, said on a conference call yesterday.


The automaker enhanced incentives on 2010 models in particular in anticipation of higher volume than actually occurred, he said. As a result, “I think we’ll carry out our 2010 incentives for remainder of the year,” Templin said.


Mercedes has been helped this year by a 53 percent jump in sales of its redesigned E-Class, introduced in 2009. The Daimler unit boosted average incentive spending 9.4 percent in October to $4,389, according to TrueCar.


“They are coming out with a lot of attractive lease deals,” Toprak said.

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Mercedes isn’t planning to increase incentive spending at the end of the year, Michael Slagter, vice president of sales for the brand’s U.S. unit, said in an interview.


“We’ll be competitive and do what we need to do to be competitive in the market,” he said.


BMW’s October gains were held back by lack of inventory of the new X3 sport-utility vehicle, which is reaching showrooms late this year, O’Donnell said in the Nov. 2 interview. Sales of the redesigned 5 Series rose 62 percent to 4,925, helped by the arrival of the sedan’s all-wheel-drive version that makes it more competitive with the Mercedes E-Class, he said.


The 5 Series still has room for sales growth, Jessica Caldwell, an analyst at auto-information website Edmunds.com in Santa Monica, said in a telephone interview. “It’s probably going to take a little bit more time to catch on.”


BMW’s average incentive spending fell 34 percent in October to $3,179, TrueCar said.

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