To Boost Margins 2013 Lexus ES May See U.S Production

2011 (and 2010, for that matter…) was a rough year for Lexus. It lost its “Number One” luxury sales crown in the United States, a title it has held since the beginning of last decade. BMW overtook Lexus for the top spot and with the new 3-Series hitting its stride, expects to retain it this year. Lexus, on the other hand, has different plans.

In 2012 it plans to sell 250,000 vehicles, overtaking BMW for number one. The company’s development process has been shaken up. Last year it launched the GS rear-wheel drive sedan, a car that has gotten a lot of critical acclaim for its engaging driving experience. Engaging? Yes, things havechanges.

For the 2013 model year, Lexus is launching an all-new version of its bread-and-butter ES sedan. The 2013 model is a far more impressive vehicle than the car it replaces, and it should do very well with the demographic it is aimed at. Buick needs to deliver an impressive update to the LaCrosse soon. According to WardsAuto.com, dealers are pressing Lexus to build the car in the United States. The reason is the same on that is pushing many other foreign automakers into U.S production: exchange rates.

Tim Morrison, vice president of sales and dealer development at Lexus says: “One of the requests we’ve had from our dealer council is to figure out a way to get the ES – or one of our other volume vehicles – here just to blunt the (negative effects of) currency exchange,” he says. “(But) when you look at whether you want to shift production to North America, that’s a very big decision. It’s a lot of money, and there’s timing with changeovers, etc.” Later, he said “we’re not there yet, but I can tell you it’s (U.S production is) coming.” Moving production is large undertaking, as he said. There currently is enough capacity in Japan to produce the ES. U.S production would boost margins, but the ES remains nicely profitable thanks to its high transaction prices. Lexus plans to sell 5,000 units per month of the ES when it hits its sales stride next year.

About The Author

Tony Pimpo is a young automotive journalist who lives in Northern California. He believes the future of the automotive industry will depend in a large part on the recommendation of enthusiasts and Generation Y. More than ever, automakers lately have realized the power of Gen Y. Not only in regards to buying power, but in driving opinion and spreading a brand’s message through the internet and various forms of social media. His appreciation for cars formed at an early age, thanks to his dad, who has always been involved with cars in different ways over the years. Tony has contributed to various websites in his pursuits, and is on staff at GMInsideNews, where he has been writing since the age of 12.

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