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Amid Comparisons To Buick, Lexus Concedes Luxury Sales Title

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#1 ·
Amid Comparisons To Buick, Lexus Concedes Luxury Sales Title
Left Lane News
July 11, 2011
by Nat Shirley

With significant lost sales in the wake of the devastating Japanese earthquake and tsunami , it is all but certain that Lexus’s 11-year reign as the top selling luxury brand in the U.S. will come to an end. Whether the brand will rebound to the top of the sales charts in 2012 and beyond is far less definite, leading one analyst to suggest that the brand is on its way to being the Buick of yore.

Lexus U.S. sales are projected to fall to by about 17 percent to 190,000 in 2011, said Lexus Division general manager Mike Templin. A difficult first half saw Lexus selling 88,010 vehicles as arch rivals BMW and Mercedes-Benz moved 113,705 and 110,926 units, respectively. That gap will likely prove too great for Lexus to overcome during the second half of 2011.

However, the difficulties at Lexus may extend beyond supply shortages caused by the devastation in Japan. Industry analyst Aaron Bragman of IHS Automotive suggested that Lexus could face “quite a challenge” to reclaim its sales crown due to an increasing perception that the brand builds vehicles best suited to septuagenarians.

Demand for Buicks is up 34 percent this year to 93,599 units. Buoyed by a pair of new premium sedans, the General Motors unit is quickly shedding its image as a stagnant brand for ever-aging buyers. By contrast, Lexus sales are down 24 percent through the first six months of 2011.

Full article at link.
 
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#7 ·
NOT good for Lexus but the analogy to past Buicks is dead on. The best term for Lexus in today's Lux market is "stodgy"....or maybe "stale". Friends of mine who can afford ANY car they want just turned in the wife's 2009 RX for a totally loaded Enclave. She is over the Lexus thing and cannot say enough about the Enclave.
 
#6 ·
"Luxury"

I dunno. I don't get the comparison of Buick to Lexus. Personally, I think Lexus is a higher end brand to Buick.
Not to say the latest crop of Buicks isn't good, I just think a direct comparison is something of a stretch.

.
 
#9 ·
Of course it's higher end than Buick. The flagship Buick sedan is priced the same as the entry level Lexus - and I don't mean the ES. Throw in the $22k Verano next year and I won't be surprised if sales would double even Mercedes.

BMW has an all new lineup (probably more Lexusy than any BMW lineup before it) and some very attractive lease offers, not hard to see why they're #1.
 
#10 ·
I think Buick's price point is still well below Lexus's. Plus, with the introduction of the Verano, that price gap will only increase.

Lexus's cheapest model, the CT, is $30,000. The ES starts at about $37,000, or about ten grand more than the LaCrosse, which makes sales comparisons tricky, despite what Buick will like us to think whenever it promotes how the LaCrosse outsold the ES.

That's not to mention that the GS, LS, LF-A, LX, and GX are all well outside the range of Buick's pricing.
 
#30 ·
Buick price point isn't ''well below'' Lexus.

First of all LaCrosse isn't $27,000.LaCrosse Average Transaction Price is in the mid-$30's so the sales comperison are far from''tricky''.

The other thing is that most of Buick and Lexus(RX,ES) volume comes from the same product category .Those other Lexus model generate very little volume.
 
#13 ·
Buick is playing the luxury value game, they are claiming to offer the same level of rifinement, quality, luxury as Lexus but at a much lower price point. Thats how you have to rebuild a brand that had the horrible perception Buick had/has.

They are playing the Hyundai game and its working, they are getting the sales to put Buick back on the map.
 
#18 ·
You can play the value game, so long as you have something to "hide" the fact that it's a value. Marketing. PR. Perks. Extras. Super high levels of service.
Buick remains a price level below Lexus at nearly every corner. And I don't believe Lexus has a significant "Lexus tax" for buying a Lexus either -- compared to similar "Mercedes/BMW Taxes."

Buick has made headway, but is still significantly behind. At best, it needs to truly identify its competition -- most likely the Acuras and Hyundais.
Lexus is too far ahead and has a 20 year headstart and name recognition. What Lexus has today is the proverbial bump in the road. Much of their lineup is old and/or aging. In 2 years, can we say the same? Especially when the Buick lineup will be old/aging?

Lexus has true aspirations to be a global luxury player. Can we say the same for Buick? Or is Buick even the right brand to be GM's global luxury player?
 
#26 ·
I agree with the premise of the article, which is that due to the Japanese diasters Lexus will probably fall behind BMW and MB. I don't know that I'd really put Buick in the same ring, however. Buick is upscale, but BMW, Mercedes, and Lexus are luxury. It's all debatable though I suppose.
 
#32 · (Edited)
I have to say this... I've owned two Lexus' one an IS250, I got rid of it because when you opened the sunroof, the rear view mirror shook violently! If a GM car did that the media would destroy it! I did love the look of the car and still do. I also owned an LS460 and it drove like a Cadillac of yore, meaning a boat. The "self parking" feature was a joke, as was the dash, which was soft touch plastic, it had no leather or even "leatherette" stitching as even the much maligned Cadillac CTS has. Sorry, but I was left less than impressed with either car. PLUS, when I had either car in for service, I was given an RX for a loaner. That vehicle is made for women plain and simple. it even has a place for them to put their purse!! And of course it was always a base model with no Nav or anything fancy. I would have much rather had a base Enclave than that thing. It truely felt like a Camry wagon.
All I'm saying is other than the "perception" of Lexus, I've had their small car, and their Largest, most luxurious car, and I think they are very lacking currently. Plus their service isn't what it used to be! Oh yeah, and let's not forget the resale value of both sucked!!!
 
#36 ·
Who is our Lexus competitor? Buick or Cadillac? If Lexus is luxury and compared to Benz and BMW does that then imply that Buick goes up against Benz and BMW? I'm just not sure where Cadillac fits in right now or what Buick even is at the moment... They're nice but what exactly is the bullseye we're shooting at? I'm not being sarcastic, I seriously don't know.. Is Cadillac being hurt by Buick and gmc? Buick seems to get all of the comparison press in the luxury market these days.. gmc and it's 'denali' thing seems to steal some of Cadillac's thunder in the SUV arena. Are Cadillac dealers happy about this?

And what about Hyundai? A lowly 'base brand'.. What happens when they come out with their new 'luxury' models. Do we compare Chevrolet to Hyundai still? Or is Hyundai a Cadillac competitor or Buick or?? Which one is the Real luxury crossover?.. the SRX, the Enclave or is that the Acadia? Or do 'base brands', 'mid brands' & 'luxury brands' all just add up to pretty much the same thing these days...

How about this, what if Lincoln should fail and Ford adapts Hyundai's strategy of offering 'ultra lux' under 1 brand... Ford and Hyundai - competing with Benz and BMW. Will Chevrolet offer a premium line to compete with Ford and Hyundai? Maybe the lines have been forever blurred....
 
#52 ·
Who is our Lexus competitor? Buick or Cadillac? If Lexus is luxury and compared to Benz and BMW does that then imply that Buick goes up against Benz and BMW? I'm just not sure where Cadillac fits in right now or what Buick even is at the moment... They're nice but what exactly is the bullseye we're shooting at? I'm not being sarcastic, I seriously don't know.. Is Cadillac being hurt by Buick and gmc? Buick seems to get all of the comparison press in the luxury market these days.. gmc and it's 'denali' thing seems to steal some of Cadillac's thunder in the SUV arena. Are Cadillac dealers happy about this?
As others are saying, Cadillac competes with Tier I luxury brands. Those would include Lexus, BMW, Mercedes-Benz, Audi, Jaguar, etc. Buick on the other hand is upscale, entry luxury, whatever you opt to call it. Brands that compete with them (and ATPs agree with my personal sentiment) include Acura and Volvo, for two. I post this often but whenever I do it seems appropriate for discussion's sake.

2010 Upscale/Luxury Brand ATP
BMW - $52,083
MB - $48,382
Cadillac - $48,312
Audi - $43,668
Lincoln - $43,074
Lexus - $42,902
Infiniti - $42,334
Acura - $37,538
Buick - $36,512
Volvo - $35,671


And if you look at the way I color coded them, you'll notice an interesting phenomena. While it's not always fair to classify luxury brands into the three tiers we always talk about, in ATPs there are clearly three classes. That doesn't reflect sales numbers or other items, but it's curious nonetheless.

And what about Hyundai? A lowly 'base brand'.. What happens when they come out with their new 'luxury' models. Do we compare Chevrolet to Hyundai still? Or is Hyundai a Cadillac competitor or Buick or?? Which one is the Real luxury crossover?.. the SRX, the Enclave or is that the Acadia? Or do 'base brands', 'mid brands' & 'luxury brands' all just add up to pretty much the same thing these days...

How about this, what if Lincoln should fail and Ford adapts Hyundai's strategy of offering 'ultra lux' under 1 brand... Ford and Hyundai - competing with Benz and BMW. Will Chevrolet offer a premium line to compete with Ford and Hyundai? Maybe the lines have been forever blurred....
Hyundai is an interesting case, and they may just end up trying to a Volkswagen model, selling mainstream vehicles (Golf, Passat) to upscale (CC) to luxury (Touareg, Phaeton) in various markets. You bring up the luxury Ford angle should they pull the plug on Lincoln, something I've entertained myself in fact (like selling a lux'd out Falcon near 5-Series prices and a production Galaxy lux'd out to Equus/LS or 7-Series/A8 prices).

All three of these brands would be something of outcasts from the norm of having one brand for volume and one brand for luxury.

The HS has been an epic flop. It's expensive, doesn't look very good, the interior is low rent, it's not particularly fast or agile and the mileage isn't amazing. What is the point? The CT's sales woes though seem to be solely a supply issue. It's sold out almost everywhere and if you go on the CT forums, people are tired of waiting for their model to be made. Others have to settle for trim levels, colors and options that aren't what they wanted simply because that's all that is available. Month after month since introduction it tops "shortest day in inventory" lists. Compared to the HS the CT is a lot cheaper, looks a lot better, has a much nicer interior, handles decently and the mileage is very good. It's just slow.

The supply issue affects Lexus a LOT more than Toyota since every Lexus model aside from the RX is made in Japan. The inventory they've had on the ground is a lot less than normal and discounts are few and far between - unlike Toyota or the German competition.

ES is still more genuine than the Lacrosse (real wood, soft leather, standard projectors and alloys, no fake stitching, no stripper base model to cheapen the line). It's also essentially end of cycle since a new one will follow the Camry later this year. That ES is rumoured to set the bar high considering what the Camry is expected to be (which may be just more fluff and hype by Toyota). Also while the SRX sales are excellent, I don't think its stealing many RX sales, since RX sales are higher than ever despite the introduction of the SRX and several new German competitors.
This is a quality post, sir. :clap:
 
#39 · (Edited)
Even without the Tsunami, I'm sure this would have happened this year anyway considering the product blitz by BMW, Mercedes, and Audi. All have brought many attractive and compelling cars to the market. Lexus has introduced new products over the past couple of years that have been either hit or big miss..which basically describes a lot of new vehicles coming out of the rest of Toyota Corp. these days.
The lineup is either old(the GS, and the just discontinued SC) or aging(IS, ES, and LS).

I think one of the problems is Toyota's obsession with hybrid models and continued platform sharing with existing hybrid Toyota models like the Prius and Camry because it's cheaper. At least GM has an excuse with FWD models for Cadillac because it didn't have any money to push for more RWD models until after bankruptcy. Toyota wasn't bleeding money and could've afford to invest to keep the brand fresh.

But the biggest problem with Lexus is design. Boring designs that just don't attract the buyers who would pay what Lexus asks.

Toyota/Lexus can't sell cars simply based on prior quality rankings anymore. It needs hire new designers, create more autonomy between the three brands, and invest into a new RWD platform, and only come out with Hybrid models on the bigger RWD vehicles or it will continue it's "Old GM"-style descent.
 
#43 ·
Hyundai announced that there will be no premium stand alone brand in the vein of Lexus or Acura
Ahh.. ok.

Cadillac's competition is Tier 1 luxury (BMW, MB) , Buicks is entry luxury (Acura, entry Lexus models)
So it's pretty much like Admiral said, Buick takes on the entry Lexus which is like Acura etc... Cadillac takes on the upper model Lexus that's like Benz and BMW..?

I guess my confusion lied in my lack of understanding in how Lexus was set up with Tier 2 (mid brand/lux) and Tier 1 (ultra lux brand) so to speak.. Kind of two things rolled into one name. Always learning I suppose.. :eek:
 
#46 ·
Some are questioning why Buick is being mentioned in this article as a genuine competitor to Lexus, though their ATP's are considerably lower.

The answer is simple: Because those who had traditionally purchased from the Lexus brand over the past 10-15 years are now both considering the purchase of, and in many cases are purchasing competitive Buick models. You know, those same people (demographic) who purchased both Buicks and Oldsmobiles in decades prior. Buick is simply re-capturing some of its lost market share.

Remember, this is an article explaining why Lexus is losing its title. One reason is the strength of entries from both BMW and Mercedes Benz, companies who have always been considered on par (or better) with Lexus. Another reason is the loss of sales to a brand that is considered (and is) a tier below Lexus. That brand is Buick, who does offer genuinely competitive models (LaCrosse, Regal, Enclave) to a segment that Lexus has dominated for more than a decade... And offers them at a discount... Buick may be considered a tier below Lexus, and that's fine. But they are definitely contributing to the loss of Lexus' luxury car sales crown, even if Buick itself is not considered a "luxury" brand...
 
#48 ·
Buick may be considered a tier below Lexus, and that's fine. But they are definitely contributing to the loss of Lexus' luxury car sales crown, even if Buick itself is not considered a "luxury" brand...
Sorry to say it but it is an earthquake that caused Lexus to lose their crown, not Buick. Buick has improved quite a bit but has a l-o-n-g ways to go. At present, Buick is more in Acura or Lincoln territory, but definitely not Lexus.
 
#56 ·
Having served as a general manager for a dealership that sold pre-owned, off-lease Lexus cars and SUVs, it is clear to me why Buick is quickly becoming Lexus' worst enemy. Lexus' bland styling, ho-hum and very few new product and shrinking draw to younger buyers has put it in a serious bind. I think its fair to compare Buick to Lexus, although Buick does have some ground to cover in terms of going further up market and product offerings.

Buick is what Lexus should be right now...a growing, prospering luxury brand that buyers are excited about and want to know what's next!
 
#61 ·
Wait 'til the eAssist LaCrosse hits the market. 36 mpg highway is going to be extremely attractive to the near luxury market whose buyers pride themselves on making smart decisions. The ES cars won't be able to compete with those who have the slightes interest in economy.
 
#82 ·
The first Range Rovers were not luxury vehicles, Lincoln started this class in 1998 with the same formula we have now!
 
#83 · (Edited)
^ That may be true, but doesn't change the fact that these vehicles share a bit too much in both sheetmetal and components w/ their "lesser" brethren.

Now, that doesn't mean that the 'Lade isn't a very fine vehicle for what it is, but for the next gen, I'd like to see GM go with a more distinctive design.

Btw, germeezy, if the Caddy RWD flagship comes to fruition, I'd like to see a sport-oriented crossover built on that platform either to take place of the BOF Escalade or to be a whole new model.
 
#85 · (Edited)
Lexus is a barely two decade old brand that made its name building an imitation Mercedes (actually it was probably better back in the day).

Then they started building better Buicks to slot under the imitation Benzes.

Finally they made a few imitation BMWs because it was what all the cool kids were doing.

Circa 2010 all three of those brands got back on their A-game.

Now exactly why would someone buy a Japanese Mercedes, a Japanese BMW, or even a Japanese Buick when you could actually buy a Mercedes-Benz, BMW, or Buick? This is considering that the real thing is usually the same price and cheaper.

I (and others) see Lexus as a soul-less, but safe, alternative to real luxury brands. This even includes Buick (+ Oldsmobile) which wrote the book on entry-level luxury decades before the ES/RX twins existed.

Imitation Mercedes


A Better Buick (bleh)


Imitation BMW




Just my opinion. Lexus is a feat of brand building worthy of respect but it ain't without problems.
 
#87 · (Edited)
1) I'll believe it when I see it. My heart has been broken on Zeta too many times to trust at this point.

2) Buick needs a variant to push sales volume in the $50k Genesis/Equus sector. Cadillac will have the smaller, more "Cadillac" CTS in the $50k sector by then, so the Omega Buick won't compete directly. Buick also needs this car because, while the new LaCrosse has helped rehabilitate the brand, it isn't a proper flagship car. For Buick to solidify their return to legitimacy, they need a flagship. Omega provides that opportunity.

3) With the Buick pushing Omega's sales volume, the GM will have enough ROI potential in the program to let the Cadillac version go all-out and blow our minds.

If Buick doesn't get a version, GM will be way too tempted to compromise on the Cadillac, sacrificing its luxury legitimacy in order to scoop up the volume needed to get a good ROI on the program. And Cadillac will remain a Tier-2 brand as its flagship will be yet another "in-betweener".

An Omega Cadillac needs an Omega Buick. Both being proper flagships for their brands.
I know you posted this in the Cadillac thread but I thought I'd address it here.

I agree with most of this. I'd like to see a re-engineered VF Commodore with enough refinement for Buick, but a Caprice-based Buick would work too (I don't know about the market for both in the near future).


Admittedly Lexus does have a clear brand identity. They are the poster child for dedicated dependability, outstanding customer service, and amazingly smooth, refined automobiles. They do in some regards build imitations, but the brand has been able to get past that, unlike say Infiniti.
 
#86 · (Edited)
The fact that Buick is being spoken of as a "luxury brand" in articles that talk about Lexus, M-B, and BMW is proof that the Buick brand is back and that good things are happening.

Are the comparisons fair? As many of you have pointed out, Lexus has vehicles that are not only at Buick's end of the market, but the high end, too.

Thing is, Lexus's sales volume is right where Buick sits. And Buick is grabbing more volume in the segments that pay Lexus's bills, by offering as good or better cars with way better styling than Lexus does for less money. No contest.

They don't need Buick to climb to the upper echelons of the market...that's why they have Cadillac. And Cadillac needs the pressure Buick is providing to make sure they finally become an honest luxury car brand again.

So lineup-to-lineup, the comparisons between Buick and Lexus, M-B, and BMW aren't really fair. But if you look at where the volume is for those 3 foreign brands, bringing Buick into the discussion makes more sense.

I do hope Buick gets a Genesis/Equus-fighting Omega-based RWD flagship model in the $50k neighborhood. With that, the full Astra/Verano/GTC repertoire, and Encore, Buick's legitimacy will be sealed.

I'm just so happy to see Buick gaining sales momentum and image again, with the 200,000 unit mark for '11 in sight.
 
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