After more than nine years of selling its cars and sport utility vehicles in the United States, Lexus has become the nation’s best-selling luxury brand, outselling Mercedes-Benz, Cadillac, Lincoln and BMW for the last two months.
The Lexus division of Torrance-based Toyota Motor Sales U.S.A. Inc. not only outsold its competitors in July and August, but had its best sales months in its history. It sold 14,673 vehicles in July, and then immediately topped itself when it sold 16,949 vehicles last month.
“It’s been quite a 60 days for us,” said Irv Miller, vice president of sales and dealer development for the Lexus division. “Our sales are up from last year on virtually every car line.”
In the first eight months of 1998, Lexus sold about 100,000 vehicles, beating the number of Lexus cars and SUVs sold in all of 1997 by nearly 2,500 vehicles. Year to date, Lexus sales are up 54.6 percent.
Analysts say that while Lexus has done a good job of building its reputation as a quality automaker, it has been aided by problems at other luxury auto companies.
Sales at the Cadillac Motor Car Division of General Motors Corp. were hurt by the United Auto Workers strike this summer, which limited supply of all its vehicles most notably the Cadillac Seville, which competes with Lexus’ GS 300 and GS 400 sedans. The redesigned Seville had been selling well before the strike halted production of the cars.
The strike, which ended July 28, “slowed down the momentum (the Seville) had, just because of product availability out there,” said Cadillac spokesman Dave Roman. “Now we’re trying to pick up again, but it did slow down.”
Analyst Eric Noble of Santa Ana-based AutoPacific Inc. said that besides the GM strike, Lexus was helped by the inability of Mercedes-Benz of North America Inc. to produce enough ML320 sport utility vehicles, which compete with Lexus’ newly introduced RX 300.
Mercedes has increased production of its popular SUV, but has struggled to keep up with demand both in the United States and Europe. “Mercedes could be selling twice as many of those as they are, if they had the production capacity,” Noble said.
Meanwhile, the Lexus RX 300 has been leading the division’s sales this year, accounting for about a third of Lexus’ year-to-date sales. In the first five months of the RX 300’s availability, Lexus has sold 23,609 of the SUVs; the company had expected to sell only 20,000 to 24,000 in the entire model year. The large demand has forced Lexus to increase production, and had limited its RX 300 supply to just nine days as of last week.
Lincoln Merrihew, an analyst at Agoura Hills-based J.D. Power & Associates, said he’s not surprised that the RX 300 is doing so well, because there are so few luxury SUVs available for purchase in the United States.
“Basically, it’s the right vehicle for the right time. People who are put off by the truck-like attributes of existing SUVs had nowhere to really turn until the RX 300,” Merrihew said, adding that the RX 300 is the only SUV available in the United States that is constructed like a car rather than a truck.
