Lexus sees higher 2013 U.S. sales even if taxes on wealthy rise
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LOS ANGELES (Bloomberg) -- Toyota Motor Corp. expects to boost U.S. sales at Lexus luxury division next year even though taxes on the wealthy may rise as a result of a federal budget deal, the brand's global marketing chief said.
Lexus sales, up 24 percent in the United States. this year through October, may gain at least 10 percent in 2013, Mark Templin, who is also head of the brand in the region, said in an interview last week at the Los Angeles Auto Show.
Demand for luxury autos will grow faster than the industrywide pace, even with a change in tax rates, he said.
"I think that we and everyone else project that we're still going to see good consistent growth in the industry," Templin said. "Our wealthy clients have remained that way and they've been shown to be pretty resilient."
Discussions between President Barack Obama and House Speaker John Boehner on averting the $607 billion in automatic tax increases and spending cuts due to take effect in January have deadlocked over tax rates for the top 2 percent of wage earners in the country.
For Toyota, the United States is the biggest market for Lexus models, which sell on average for more than $40,000, accounting for at least half the brand's global volume.
Auto sales have been a bright spot for the economy this year, growing 14 percent through October.
Toyota and other automakers may report that deliveries of new cars and trucks rose 12 percent in November when they release sales results on Monday, according to the average of 10 analyst estimates compiled by Bloomberg.
Best pace
The annualized sales rate, adjusted for seasonal trends, may accelerate to 15 million, which would be the best pace in more than four years. Combined sales of luxury cars, including Lexus, Daimler AG's Mercedes-Benz, BMW AG's BMW and Volkswagen AG's Audi, rose 10 percent through October, according to researcher Autodata Corp.
"We all project that luxury will grow faster than the rest of the market," Templin said. "It didn't happen in the first half of the year, but it's starting to show again, and the projections for the future still show that's the case."
On Nov. 30, Obama said there will be "prolonged negotiations" as the White House and Congress try to reach a budget deal.
Obama has proposed a framework that would raise taxes immediately on top earners and set an Aug. 1 deadline for rewriting the tax code and deciding on spending cuts, according to administration officials.
Auto demand would plunge as much as 20 percent if Washington can't find a solution to avoid the fiscal cliff coming at the end of the year, Lacey Plache, chief economist of auto researcher Edmunds.com, said on Nov. 28.
Ford Motor Co. said last week it is making contingency plans should a deal not be reached whereas domestic rivals Chrysler Group LLC and General Motors Co. aren't making such preparations.
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