Lexus Aims for Younger Buyers as Sales Decline

Lexus has held the luxury sales crown for nine straight years, easily besting its Japanese and American rivals and leapfrogging the Europeans. But in today’s ever-changing market, nothing is a given…

According to data from Automotive News, Lexus’s sales thus far in 2009 have suffered worse than the European luxury brands. While BMW and Mercedes-Benz have fallen about 29 percent so far this year compared to 2008, Lexus sales have tumbled 34 percent. Through the year, BMW has sold 93,563 vehicles–about 3503 more vehicles than Lexus– while Mercedes sold 85,130, just 4930 less than Lexus. Acura and Cadillac still trail the top three, with Acura trailing Mercedes-Benz by approximately 34,000 vehicles.

Lexus executives admit that the company has been too dependent on its wildly successful RX crossover, a vehicle that trounces its competitors in sales. The officials want to see more convertibles, coupes, and smaller cars like the HS make it into Lexus’s lineup. Such variety, they say, is what helps bolster sales of BMW’s lineup.

With the introduction of the IS convertible, Lexus is headed in that direction. The success of BMW’s 3-series has made its lineup one of the most mimicked, with automakers like Cadillac planning entry-level nameplates with convertible, coupe, sedan, and wagon body style offerings just like the Bavarian automaker’s models. With the IS convertible, Lexus hopes it can successfully cut into a market the 3-series has monopolized.

One of the key issues Lexus has is its aging demographic. While the median age of BMW buyers through April this year was 46 (with 25- to 49-year-olds scooping up 3-series models), Lexus’ average buyer is 53. Lexus General Manager Mark Templin says Lexus attracted plenty of 45-year-old buyers when it was introduced to the U.S. market 20 years ago (and they have remained faithful), but Toyota’s luxury division has struggled ever since to capture younger buyers.

By introducing vehicles like the IS convertible and the HS dedicated hybrid, Lexus hopes to attract buyers as young as 25. As part of its “youth movement,” Lexus will add greener, sportier, less-expensive models, place more emphasis on product training, and try to be a leader in telematics technology.

“To stay on top is a continuous battle, and that starts with training,” says Michael O’Brien, chairman of the Lexus dealer council. “We have to make sure we can take it from the salesperson and put it in the consumer’s brain.”

Lexus executives see understanding technology as a way to connect with younger buyers. This week, Templin says Lexus will begin “the most comprehensive dealer training program ever” for the HS, as it educates dealers and salespeople about the numerous technologies in its new luxury hybrid.

But Templin isn’t too concerned about taking the top spot back from BMW.

“I’m not worried where we are right now,” he says. “As the year goes on, we will gain share and sales due to the new product. It’s our goal to be the best, not the biggest.”

Source: Automotive News