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News - Market Insight - Market Insight 2024Market Insight: Five-figure sales for LexusSales of Japanese premium brand Lexus are growing – but all is not what it seems25 Mar 2024 By PHILIP LORD PREMIUM car brand Lexus has received many accolades for product quality but never quite reached the popularity of German marques in Australia, although 2023 sales figures – and those tipping into 2024 – make it appear as though the Japanese manufacturer is finally about to have its day in the sun.
Going on last year's sales figures, industry statistician VFACTS shows Lexus sold 15,192 vehicles in 2023, representing a 1.8 per cent market share and up a solid 114 per cent on 2022.
The 2023 figure also put Lexus around just 3000 units away from pipping Audi, approximately 9000 less than Mercedes-Benz and 11,000 fewer sales than BMW, itself stealing the crown from Benz for the first time in more than a decade.
So far, 2024 is also looking strong for Lexus with 1882 sales to the end of February, or 54.5 per cent up on the first two months of last year, further narrowing the gap with Audi (2228 sales, down 26.5 per cent) and Mercedes-Benz (2401 sales, down 26.8 per cent).
BMW remains stronger than ever, with 3312 sales, up 31.1 per cent.
For Lexus, the NX medium SUV, RX large SUV and UX small SUV were the big improvers in 2023 – and that is before volume from the new LBX light SUV (on sale this month), and large GX of-roader (due in June) takes effect.
So how did Lexus get there, and will it continue to grow sales – seemingly at the expense of Audi and Mercedes-Benz?
Speaking to GoAuto at the LBX launch in Sydney last week, Lexus Australia chief executive John Pappas cautioned that the figures had to be taken in context and went as far as to say the brand was not expecting to increase sales over 2023.
“The 2023 year was an extraordinary one for us and the industry, fulfilling delays from the previous year. We had a catch-up from the previous year on orders we could fulfil due to supply limitations,” Mr Pappas explained, adding that while the brand’s volume baseline is expected to improve, supercharged sales numbers are not expected in 2024.
“This year, when you look at our year-to-date sales versus last year you think, ‘You’re well above it, you should do 15,000 or more’; In actual fact, last year (January-February 2023) we had some different things going on: some cars were in runout and so on.
“The key point is that our baseline of sales has increased, it is sustainable. It will continue to have tree-ring growth. We’re not planning to do more than we did last year.
“We’re resetting our baseline this year, was about 9000, now this year to well above 10,000, up to about 15,000. We don’t get hung up on sales numbers and records, we focus on the experience side.”
Mr Pappas added that the wait times that have affected many brands should become much less of an issue for Lexus by June.
“Reducing customer wait times is a big focus. For 90 per cent of our models, by mid-year, we’ll be back to normal lead times, that is, two to four months.”
Mr Pappas added that getting production for Australia was still tight for some Lexus models, citing the example of the new Lexus LBX light SUV.
“We think we’re going to be slightly tight (on supply) to start with," he admitted.
“For the first 12 months, we’ve been allocated about 1500 LBXs. We have just over 300 customer orders now."
Mr Pappas confirmed the much anticipated next-gen Prado-based Lexus GX for a June release will also be throttled on supply.
“That car is going to be tight. We’ve got 1500 allocated over the first 12 months. We’ve already got over 500 orders. We’re embarking on a six-month waiting period, months before it has released.”
Mr Pappas also pointed to how too much volume too quickly can have an impact, that higher volumes could risk the quality of the ownership experience – that is, the interactions with dealers.
“It’s not about hitting a volume target of 14,000 or 15,000 or whatever, it’s whatever is sustainable. You’ve got to be careful not to deteriorate that experience. You’ve got a certain footprint as well – a certain number of dealers. Otherwise, the experience can go the other way, you don’t want to do that.”  |
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