Lexus makes up ground amid luxury slump

on Sep2

Lexus’ Bracken: “As the new 2018 models begin to roll in, we expect strong sales as we head toward the end of the year.”

Sales for the top three luxury auto brands fell in August, but No. 3 Lexus made up significant ground on its main German rivals by holding its sales loss to a much narrower margin.

With the effects of Hurricane Harvey crimping sales industrywide, U.S. sales of luxury vehicles fell 3.8 percent in August from the year-earlier month to 171,307 units. That was a steeper decline than the 1.8 percent drop in total U.S. light-vehicles sales last month.

Sales slid by even larger margins for the top two brands. Mercedes-Benz’s sales, excluding the Sprinter and Metris commercial vehicles, slumped 11 percent to 25,373. BMW’s fell 7.7 percent to 23,553.

No. 3 Lexus narrowed the gap by holding its own August decline to 0.4 percent and selling the most luxury vehicles — 30,801 — of any brand in the month.

Through the first eight months of 2017, Mercedes, with luxury sales of 213,242, still has a lead of 18,638 over BMW. BMW and Lexus are now much closer, with BMW hanging on to a 1,141-vehicle edge over Lexus.

“Customers took advantage of our Golden Opportunity Sales Event, and we were pleased to see Lexus sedans gain momentum for the month of August, most notably the ES,” Jeff Bracken, Lexus general manager, said in a statement. “We also saw a sales increase for the NX and GX luxury utility vehicles. As the new 2018 models begin to roll in, we expect strong sales as we head toward the end of the year.”

Availability, floods

Several luxury automakers pointed to limited availability of key models as a reason for their August decline. Several also cited flooding caused by Hurricane Harvey in Houston and other parts of Texas as August ended.

“The fourth week of the month is typically our strongest selling period within the month, so that lined up to be, first and foremost, a devastation for the city and the residents, but then from a pure business standpoint, it has affected our sales there,” Drew Slaven, vice president of marketing at Mercedes-Benz USA, said of the storm. “By how much, I can’t say, because we don’t know yet.”

Mercedes dealerships in Texas escaped flood damage to their buildings and vehicle inventories, Slaven said. There are seven Mercedes-Benz dealerships in Houston and 17 in the metro Houston area. Those 17 dealerships, plus some others in outlying markets, were closed for varying periods of time during the storm. As of Friday morning, most were back up running, and all were expected to be fully operational by Tuesday, Slaven said.

With parts of the region still under water and east Texas still in storm recovery mode, Harvey is expected to affect Labor Day weekend sales and September’s outcome, as well.

Challenges

Luxury automakers reported challenges with inventory levels in August, particularly on the SUV and crossover side.

“August numbers were a bit unusual in that sedans outpaced our SAVs as model year changeover for the X5 and new model production of the X3 significantly restricted availability of our especially popular SAV models,” BMW of North America CEO Bernhard Kuhnt said in a statement. “This of course will improve as production ramps up.”

Notable gains for BMW in August included the 4 series, 5 series and X1, the company said.

Limited availability of several models hurt the Mercedes monthly total, Mercedes-Benz USA CEO Dietmar Exler said in a statement. He didn’t specify the affected models, but it particularly involved SUVs, a company spokeswoman said. Mercedes-Benz volume leaders in August included the C class, GLC and GLE.

Porsche saw a string of monthly increases end in August. Sales were down 9.1 percent to 4,709. Porsche pointed to delays in delivery of 2018 model year vehicles. Many of those are still “in the final regulatory approval process,” Porsche said in a statement. “Porsche is working diligently to obtain all required approvals as soon as possible.”

Sales of the top-selling Macan slumped 29 percent to 1,641.

Luxury brands that experienced sales gains in August were Audi, Infiniti, Genesis, Volvo and Land Rover. Only the first three were also up in the first eight months of the year.



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