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Lexus sales up but Toyota's profits tumble

Wed, 13 Aug 2008

By Ben Whitworth

Motor Industry

13 August 2008 13:25

With spiralling fuel prices, luxury off-roaders may be seen as the devil on wheels in the UK’s current cash-strapped economic climate – which would explain why last month saw a sharp drop in SUV sales at BMW, Audi and Mercedes. But not at Lexus.

July 2008 sales of the company’s RX400h hybrid off-roader climbed 28 percent over the same period last year, rising from 223 to 285. And Lexus reckon it’s the only company to boast a sales hike in the hard-hit SUV market – its figures showed BMW suffered a drop from 833 to 613, over the same period, with similar declines for Mercedes (461 v 254), Land Rover (3350 v 2100) and Audi (412 v 274). The company is also working hard on its next RX, which will only be available as a hybrid.

So good news for Lexus – but cast a wider, international net and the picture is not so rosy. Last week Toyota announced it was axing 800 jobs at its Fukuoka-based Lexus production plant in Japan as America’s Lexus sales slumped a massive 25 percent in July compared to the same period last year. It’s the first time that Toyota Motor Kyushu, the Toyota-owned subsidiary that manufactures Lexus models, has instigated large-scale redundancies since it started production 16 years ago.

This came on the back of Toyota’s recent announcement that it expected its global vehicle sales to drop by 350,000 – around 3.5 percent - for 2008, the first time in seven years that Toyota has expected production to slow. The company’s net profit for the first financial quarter of 2008 also tumbled 28 perccent to $3.2bn, hit by plummeting sales in the US and rising fuel prices.

The end of a near-two decade golden growth period for Lexus, or a mere blip? Click 'Add your comment' below and have yor say.

By Ben Whitworth