Lexus' key potential growth market? U.S.
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LOS ANGELES -- More than 20 years after its world debut as an almost exclusively American brand, Lexus has expanded into 86 countries.
Lexus took the U.S. luxury market by storm, and the United States remains its largest market by far. So where is the biggest growth potential for Toyota's luxury brand? China? Japan? Russia? Brazil?
In raw volume terms, none of the above, Lexus global product marketing chief Mark Templin said in an interview.
The biggest opportunity remains the United States. He said Lexus has regained its footing after the unintended acceleration and tsunami crises that last year cost the brand the U.S. luxury sales title it held for 11 straight years.
"China will be enormous, and India and Brazil are growing like crazy," Templin said. "But they're not comparable to the U.S. types of numbers."
ES, GS fuel growth
Templin is Lexus' U.S. boss, but in March his duties were expanded to include the brand's product and marketing planning worldwide. Still, he has lost none of his U.S. focus.
"We're back in the growth trajectory" in the United States, Templin said. "I am bullish about getting back to 16 million unit markets, and luxury is growing faster in that time frame."
The redesigned ES and GS sedans have fueled Lexus' growth this year, with the GS conquesting more luxury customers than any other Lexus vehicle, Templin said.
Lexus sales are up 23 percent to 213,559 through November, but the brand is still being outgunned by Mercedes and BMW after falling behind the German rivals last year.
U.S. sales peaked at 329,177 in 2007. Templin declined to give a volume target for the brand.
"To say we want to grow back to 300,000 units right away would be crazy, because we would hurt the customer experience," he said.
'Stuck in a vise'
Jim Lentz, CEO of Toyota Motor Sales U.S.A., isn't declaring that Lexus will reclaim the luxury-volume title, but said, "the last few months we are toe to toe" with the German brands.
"Our volumes will continue to grow," Lentz said. "We have been stuck in a vise between Mercedes and BMW with their currency advantage. With the strong yen and soft euro, they have shown they are willing to spend on incentives."
Lexus has spent an average of $2,689 per new vehicle sold on incentives during 2012, compared with $3,462 for BMW and $3,834 for Mercedes, according to TrueCar.com.
Globally, Lexus would have broken 500,000 global sales this year if not for the anti-Japanese sentiment in China, Templin said. Lexus China projected sales of 88,000 at the start of the year, but will fall well short of that.
Longer-term, Templin sees great potential for China, "but we don't manufacture cars there yet."
You can reach Mark Rechtin at mrechtin@crain.com. -- Follow Mark on 
