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Although Lexus has been the best-selling luxury brand since 2000 — and outsold its nearest competitor by almost 50,000 units in 2006 — the luxury marque could be in jeopardy of losing its market share as soon as 2015, a new report finds. With the majority of Lexus customers being of the baby boom generation, the automaker could be out of position to attract younger buyers in the upcoming years.
"When we look at the luxury market in 10 years, it's going to change so dramatically," said former Lexus General Manager Jim Farley in an interview with Automotive News before he moved to Ford. Farley was also responible for the development of Toyota's Scion brand.
According to Automotive News, Lexus owners are older on average than those of its Japanese and European rivals, except for Jaguar. In fact, the only luxury marques with a higher average age than Lexus buyers are Jaguar, Cadillac and Lincoln.
Perhaps the biggest concern for Lexus is the extremely high average age for its entry-level vehicle. "The ES 350's average age is 61, and their number-one occupation is retired," Farley said.
The average age is no doubt a direct reflection of the Lexus product offering. According to industry analysts, other luxury brands — such as Audi
But within the next decade or so, there will be a demographic shift in the age of those buying luxury cars. Currently, about 23% of luxury car byers are between the ages of 30 and 40. But by 2015, that figure is expected to more than double to 50%, due to younger households earning more that $150,000.
"As boomers retire or pass away, this younger group will be much more representative," says Milton Pedraza, CEO of the Luxury Institute, a New York market researcher. "They will be the bulk of consumers by 2015, replacing the baby boomers."
Lexus hopes that the IS and RX will help attract younger buyers. "The ES 350 is not going to attract a 40- or 45-year-old," analyst Tom Libby told Automotive News. "They need the IS and RX to appeal to younger buyers." Farley believes the high-perfomance IS-F will get the attention of young buyers who otherwise wouldn't consider the Lexus brand. "This car is not aimed at anyone buying our cars today," Farley said at the car's media introduction. "This car was not supposed to be."
It remains to be seen if the Lexus IS-F will draw new customers into Lexus dealerships. While the new IS offers more styling and performance than past Lexus offerings, it competes in a segment that includes the BMW 3-series, Audi A4 and Infiniti G35. And, with upcoming cars like the BMW 1-series, Mitsubishi Lancer Evolution X and Subaru Impreza STI, the entry-level luxury/performance market looks to get even tighter and could be the beginning of a slippery slope for Lexus. and Infiniti — have a lower average age because "they aren't as strong as Lexus in the upper-range segments." The Lexus LS is one of the best selling high-end luxury cars on the market.
Source LLN.
"When we look at the luxury market in 10 years, it's going to change so dramatically," said former Lexus General Manager Jim Farley in an interview with Automotive News before he moved to Ford. Farley was also responible for the development of Toyota's Scion brand.
According to Automotive News, Lexus owners are older on average than those of its Japanese and European rivals, except for Jaguar. In fact, the only luxury marques with a higher average age than Lexus buyers are Jaguar, Cadillac and Lincoln.
Perhaps the biggest concern for Lexus is the extremely high average age for its entry-level vehicle. "The ES 350's average age is 61, and their number-one occupation is retired," Farley said.
The average age is no doubt a direct reflection of the Lexus product offering. According to industry analysts, other luxury brands — such as Audi
But within the next decade or so, there will be a demographic shift in the age of those buying luxury cars. Currently, about 23% of luxury car byers are between the ages of 30 and 40. But by 2015, that figure is expected to more than double to 50%, due to younger households earning more that $150,000.
"As boomers retire or pass away, this younger group will be much more representative," says Milton Pedraza, CEO of the Luxury Institute, a New York market researcher. "They will be the bulk of consumers by 2015, replacing the baby boomers."
Lexus hopes that the IS and RX will help attract younger buyers. "The ES 350 is not going to attract a 40- or 45-year-old," analyst Tom Libby told Automotive News. "They need the IS and RX to appeal to younger buyers." Farley believes the high-perfomance IS-F will get the attention of young buyers who otherwise wouldn't consider the Lexus brand. "This car is not aimed at anyone buying our cars today," Farley said at the car's media introduction. "This car was not supposed to be."
It remains to be seen if the Lexus IS-F will draw new customers into Lexus dealerships. While the new IS offers more styling and performance than past Lexus offerings, it competes in a segment that includes the BMW 3-series, Audi A4 and Infiniti G35. And, with upcoming cars like the BMW 1-series, Mitsubishi Lancer Evolution X and Subaru Impreza STI, the entry-level luxury/performance market looks to get even tighter and could be the beginning of a slippery slope for Lexus. and Infiniti — have a lower average age because "they aren't as strong as Lexus in the upper-range segments." The Lexus LS is one of the best selling high-end luxury cars on the market.
Source LLN.
