DETROIT -- The head of Toyota Motor Corp.'s Lexus division said on Monday he expects luxury vehicle sales in the United States to be about 24 percent higher in 2005 than in 2003 due to lower relative prices and a more affluent, aging population.
"Cars are a lot more affordable than they've ever been," Denny Clements, the group vice president and general manager of the Lexus division, said in a speech to the Detroit Automotive Press Association. "For example, in 1989, when Lexus was established, it took over 30 weeks of salary to purchase a vehicle. Now it takes 20 weeks."
Many vehicle leases that were started three or four years ago when U.S. sales peaked are now expiring, bringing buyers back into the market. In addition, the baby boomer generation is entering its peak earnings years, and their children are moving out.
Clements said that new vehicles, such as the RX 330 SUV, should help Lexus hold its U.S. market share as luxury sales grow.
Lexus expects U.S. sales for the RX 330, the successor to the highly successful RX 300, to top 75,000 a year. Lexus will also be the first luxury automaker to offer a so-called hybrid vehicle, which pairs a gas engine with an electric motor to save fuel, when it offers a hybrid version of the RX 330 in the second half of next year.
Clements said that the RX Hybrid will probably be priced about $3,000 to $5,000 higher than the RX 330, but final pricing has not been determined.
The RX Hybrid will have the fuel economy of a compact car, yet travel from 0 to 60 mph in a little more than seven seconds. He claimed that the Toyota hybrid system is superior to the offerings of some competitors, and is like comparing "a high school science project to rocket science."
"We think our market share mid-decade will probably be about where it is now," he said.
Lexus's U.S. sales are down 4 percent through the first three months of this year, slightly above the industry's drop of 3.2 percent, to 52,188 vehicles, behind Germany's BMW with sales of 54,199, excluding the Mini brand.
Unlike many of its competitors, Clements said that Lexus will shun consumer incentives, and therefore forego sales, in order to protect the brand's prestigious image. "Although some of our competitors play heavily in the incentives game, we don't think that's consistent with an aspirational brand," he said.