Foreign Brands Take Lexus Market Share in Japan

Foreign brands such as BMW and Audi have been responsible for the recent significant drop in Lexus market share. While Lexus new car sales dropped 45% in April, BMW experienced growth of 56% during the same period.

While Lexus has been struggling to return production levels to normal, customers have been shopping around other premium brands such as BMW and Audi. In one BMW showroom, the number of new visitors has increased by 30% recently, often sporting Lexus-branded bags picked up at the nearby Lexus dealership. These new visitors often have considered buying a non-Japanese car, but the lack of availability of Lexus models due to production difficulties are what have caused them to pursue this interest further, with about half of these actually resulting in sales for BMW.

As Mr Kubota, BMW Japan’s top salesman, says: “In some ways it may be considered wrong somehow, but on the other hand it is a chance for us to increase market share.”

Beyond the immediate benefit of these individual sales, the longer-term effect is that aversion to non-Japanese brands is being broken down more quickly among the Japanese buying public, which will no doubt translate into increased market share in the future as these new customers become repeat customers over the years.

Source: Bloomberg (Japanese-language)