Lexus President: Earthquake Injury and Its Luxury Vehicle Leadership

Mark Templin, vice president and general manager of Toyota's Lexus division, said that the Japanese super earthquake in March this year caused an inventory shortage. Coupled with the original sales advantage relative to other luxury car brands has been weakened and even reversed, Mark Templin believes that the history of Lexus’ dominance of the US luxury car market for decades will eventually be finalized.

The strong earthquake caused the suspension of various components in Japan, and the assembly plan delayed the backlog. From this week, especially to May, Lexus dealers will feel the pressure of stock shortage. At the New York International Auto Show 2011, which opened last week, Mark Templin pointed out that dealership stocks are becoming tight, with almost all models maintaining only 30-day inventory levels. A few models, such as the CT 200h compact hatchback hybrid, are close to being sold out. Lexus has taken remedial measures such as extending the lease period for this purpose, but with little effect.

In 2010, Lexus, BMW and Mercedes-Benz ranked the top three luxury cars in the United States with 229,329 cars, 220,113 cars and 216,448 cars respectively. However, Lexus was ahead of BMW's 19,473 cars in 2009. The annual growth rate of 6.2% is also significantly lower than BMW's 14%. By February 2011, Lexus had sold its monthly sales of 13,814 vehicles to the fourth place after BMW, Cadillac and Mercedes-Benz. The original advantage has finally turned from weakening to reversal.

Mark Templin believes that in the long run, because Mercedes-Benz and BMW are more aggressively obeying fuel efficiency regulations, Lexus may forever fall out of the top-selling luxury cars. However, on the other hand, he stated that "growth for growth" is meaningless because laws and regulations replaced demand as the main driver.