Lexus Trying to Tie a Red Bow on 300,000 in 2014 Sales

Luxury brand celebrating 25th anniversary.

by on Nov.25, 2014

Jeff Bracken, head of Lexus, said the brand would sell 300,000 units in the U.S. this year.

Just weeks after suggesting Lexus would sell more than 300,000 vehicles this year, the brand’s top executive revealed how it will make that number: it’s launching its annual, year-end sales drive, which made December into one of the most, if not the most important months on the auto industry’s marketing calendar.

Through October, Lexus has seen its sales increase 14.3%, outpacing the growth of other luxury nameplates in a strong market. Jeff Bracken, the head of the Lexus Division, told the Automotive Press Association in Detroit that Lexus will kick off its annual sales drive next week. But he also noted that rivals such as BMW and Mercedes-Benz have copied Lexus sales tactics.

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“We thought we owned the red bow,” said Bracken. “But now I’m not so sure.”

Bracken added that the week between Christmas and New Year’s Day has become one of the busiest of the year in dealerships as they chalk up substantial sales numbers throughout the holiday period. Lexus also reserves part of its incentive budget to support the year-end sales push, which utilizes subsidized leases and other promotion to attract customers.

Lexus, however, doesn’t spend as much as its competitors, Bracken said.

“Our German competitors spend more,” he said, adding that while he is keeping an eye on the ambitious plans of domestic luxury brands such as Lincoln and Cadillac, the Germans still set the competitive tone in luxury segment.

Bracken also noted the U.S. market is critical for Lexus, which is celebrating its 25th anniversary this year. The Lexus brand is sold in 90 different countries around the world and it will sell more than 500,000 units this year. But the U.S. accounts for more 60% of the total. Customers in the U.S. have a major influence on the Lexus product strategy.

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During the last quarter century, the Lexus product range has grown from two models to 10 models today.

Bracken hinted that more vehicles will be added to the Lexus product portfolio in the future. Lexus showed off the LC-F2 Roadster in Los Angeles last week and Bracken said he was inundated with questions about whether it will emerge as a production vehicle in the not too distant.

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For right now, the LC-F2 is a concept vehicle, Bracken said. Lexus also plans to unveil one and perhaps two vehicles at the North American International Auto Show in Detroit in January. Lexus also shifted its product philosophy and expects to make its vehicles more “emotional” and more performance oriented in an effort to appeal to younger consumers, Bracken said.

The original LS400 was designed to appeal to Baby Boomers who were roughly 56 years old when the first Lexus appeared 25 years ago. The goal now is to retain its customers in the Baby Boomer generation and make inroads among younger buyers from Gen X and Gen Y.

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Lexus also plans to stick with its core philosophy of offering excellent customer service, which has defined the brand from the very beginning and earned top honors in customer satisfaction from J.D. Power & Associates 16 times during the past 25 years.

However, while its Lexus is certainly interested in growing its sales volume, it has no plans to offer a near luxury vehicle, selling for less than $30,000, added Bracken, who noted that Toyota already has that space well covered.

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