By on March 13, 2020

2018 Lexus LS500 AWD - Image: LexusOver the course of three decades, Lexus has accomplished remarkable feats in the U.S. marketplace. While the modern luxury landscape proves how challenging it is for a (non-Tesla) upstart such as Genesis to garner even an ounce of market share, Toyota’s premium brand generated relatively high volume levels from the get-go.

By 1991, only the third year on the market, Lexus had already overtaken all other import premium brands. By 1998, Lexus was able to top monthly luxury sales leaderboards. Then in 2000, Lexus became America’s top-selling premium marque. The Lexus LS, the brand’s flagship sedan, was an especially important piece of the puzzle in those early days. In fact, when Lexus first outsold Mercedes-Benz and BMW on an annual basis, the LS was one of just three Lexus nameplates. Nearly 43,000 copies of the LS were sold in 1990, for example, at a time when BMW’s 7 Series did just a quarter of that volume; and with Mercedes-Benz some 17,000 units abaft.

But as the LS gained license to move upmarket, as the Great Recession came and went, as the tastes of luxury car buyers became the tastes of luxury SUV buyers, the LS became something of a forgotten flagship. By the end of the fourth-generation LS’s tenure, Lexus was selling barely more than 300 LSs per month in America.

Yet with the launch of a new model in 2018, Lexus intended to dramatically increase the U.S. sales volume for its biggest and most costly sedan. And if at first it looked as though Lexus might just have forecasted accurately, a second glance reveals just how far off the mark even Lexus can be.

2007 Lexus LS 460/460L - Image: LexusIt’s not as though we haven’t seen this before with Lexus and its high-end products. Expectations for the LC coupe were chart-toppingly lofty. In 2017, Lexus anticipated monthly sales of 400 units for the LC500 and LC500h duo. Lexus initially hit that target, to be fair, but eventually fell far short. By 2019, Lexus was selling only around 100 LCs per month in the U.S.

In the case of the more mainstream LS, Lexus wanted to take the big four-door from the basement – 4,094 sales in 2017, an all-time low – to 12,000 sales per year with the launch of a new model. Lexus hadn’t topped the 12K mark since 2010 and hadn’t hit five-digit territory since 2013 for that matter. But it was hardly a fantasy. As recently as 2007, Lexus LS sales had risen to the third-highest annual total in the nameplate’s history: 35,226 units, a 16-year high. That was an 80-percent year-over-year increase thanks to the arrival of a new generation. Lexus had seen that sort of increase from a new LS before: in 2001, LS sales basically doubled, year-over-year, to 31,110 units.2001 Lexus LS430 - Image: Lexus2018’s car market, however, was hardly the car market of 2007 or 2001 or 1990.

Oh, at first the new fifth-generation LS moved along quite smartly. 1,008 LS sedans were sold in March 2018; another 999 the following month; another 908 in June of the same year. Then, a weakening of demand became apparent. The 900-unit marker was topped only twice more. In the second-half of the year, Lexus fell 18-percent shy of its monthly target.

And in 2019, the target resembled a moon shot. Year-over-year, U.S. Lexus LS volume decreased in each of the final 11 months of the year. Annual volume, in just the fifth-gen LS’s second model year, plunged 41 percent. Rather than attracting 1,000 buyers per month, the LS attracted 461 on average.1995 Lexus LS400 - Image: LexusGranted, the market was hardly kind to the LS’s competitors. Mercedes-Benz S-Class sales fell 16 percent to a seven-year low of 12,528 units. BMW 7-Series volume, at 8,823 units, was 15-percent off its 10-year average. Audi only sold 2,963 A8s; half the number of A8s moved just half a decade earlier.

The LS is more overtly stylish than ever before. The LS’s longer/lower/wider look draws an even deeper divide between Lexus’s flagship car and the brand’s big SUVs. The LS still plays a strong value card in a segment controlled by the pricy S-Class.

None of this matters, because Lexus simply misread the mood. It wasn’t the first time, and likely won’t be the last. But it might not be a matter of great significance for a brand that now produces almost three-quarters of its U.S. volume from utility vehicles such as the NX.

Remember the NX? Lexus thought they’d sell around 2,200 per month. Instead, that’s how many NXs Lexus sells every two weeks.

[Images: Lexus]

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars and Instagram.

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39 Comments on “Toyota Was Way Off-target With Its Sales Forecast for the Fifth-generation Lexus LS...”

  • avatar

    I am sure the SUV/CUV surge played a part in it but please look at the current design. Compared to the 2003 model the current one looks like a boy racer and that certainly is not their target demographic.

    • 0 avatar

      The old designs convey stateliness and class, like the old benz sedans. The new design fails so many tests.

    • 0 avatar

      Agreed; I think there’s way too much styling overlap between Toyota and Lexus. The general vibe of the LS’ styling can be found at a fraction of the cost in a riced-out new Camry SE or Lexus’ own ES. The LS’ styling no longer says “money.”

    • 0 avatar

      In addition to styling, there’s the downgrade from the V8 to a pedestrian V6. You can get an Avalon for less money, and still feel like you’re riding a cut above a Camry.

      But I agree, the styling of a 4-door coupe, or “sports sedan” is killing the luxury market, not just Lexus. Mature buyers who have made it don’t like ducking into their cars, and especially don’t like their mothers (or other executives) crawling into the back seat and sitting knees up and half-reclined like an astronaut in a space module.

      There’s something to be said for a tall-roof stately sedan with passengers entering/exiting easily and sitting upright.

      • 0 avatar


        One year ago was at new car show and sat in a new LS. Shocked at how cramped it was in the cockpit. I’m a run of the mill 5’10” 190lb 50 year old and would have pause about laying down comparable bucks vs 7 series, Benz or Audi. I love the brand, product, resale and performance BUT in that arena I want comfort. Sure I’ll hammer the exit ramp or cloverleaf but comfort is #1 need 95% if the time.

      • 0 avatar

        “But I agree, the styling of a 4-door coupe, or “sports sedan” is killing the luxury market, not just Lexus.” Yep, and it’s not really restricted to the luxury market; it’s sedans in general. Buyers aren’t just being pulled toward CUVs, they’re also being pushed away by the sedans themselves.

        Do you value rear seat comfort and a good ride/handling balance? Well, you’re increasingly screwed. You now have a choice of sedans with cramped rear headroom or CUVs with a buckboard ride because the suspension has to be stiff to combat the high center of gravity. OEM “rimz” with low profile tires don’t help either. (And no, a brain-dead scribe’s chirping, “It drives just like a car,” doesn’t make it so.)

        And now of course the industry is starting to go (apologies for borrowing a politically incorrect phrase from TROPIC THUNDER) full retard with CUVs that have low greenhouses. Welcome to climbing up AND ducking down into your vehicle. SMH.

  • avatar

    Anyone forecasting a sales increase for a sedan at this point is silly. All the buyers who lined up to buy fourth-gen LSes in 2007 now have GLS-Classes or X7s. Lexus’s failure to compete in that class, relying only on antiquated off-road trucks, is a massive strategic blunder.

    On the flip side of the coin, for anyone who still wants a luxury sedan, used LSes are just a terrific value. Right now the sweet spot is the 2013-17 facelift fourth-gen cars, but expect good deals on the fifth gen within a couple years.

    • 0 avatar

      Not just sedans but LS is a poor performer against the Germans and ranked last place in segment in CR rankings.

      The TFL on YouTube said it wasn’t worth the price they are charging.

  • avatar

    I just don’t like the look of the new LS at all. I’ve owned several LS models over the years and their reputation is well earned, but I have a 7 series now.

    • 0 avatar

      I agree that the styling has a lot to do with it. The squared designs of old had much more visual presence. The new one looks like larger Nissan Versa sedan.

  • avatar

    No surprise, no V8, no reason to buy it.

    The silky smooth Toyota V8 was a quintessential part of the package, it and the build quality are what makes these cars so desirable even on the used market.

    • 0 avatar

      As someone who owned one, I didn’t find the V8 optimal for the car. Yes, it was silky smooth and made a nice noise. But it was also peaky, with the real power coming on only above 3500 rpm, and the rest of the car wants to waft effortlessly. Honestly the turbo V6, which is pretty much silent and has torque for days right off idle, suits the luxury mission better.

      If I bought another fourth-gen LS, it would be a 600h. The electric motors do a nice job of filling in the torque curve.

      • 0 avatar

        They made the car sportier overall and then gave it an engine with a less sporty power delivery.
        Personally I think this gen should be LS500h standard and then optionally use the 7200RPM 2UR-GSE in an F-sport trim.

      • 0 avatar

        The 600h was a complete sales flop.

        • 0 avatar

          That’s nice. Perhaps it was a sales flop because it was priced straight across from V12 Germans, at a $30k premium over a loaded LS 460 L. I still love it and would probably own a used 2013-14 model if a sedan worked for my life right now.

          • 0 avatar

            Well, Toyota did think (wrongly that) a “performance-oriented” hybrid was an adequate substitute for a V12.

            But good thing for you, as new 600h’s were discounted as much as $20k (if not more), so used ones should be quite affordable now.

  • avatar

    New LS is too long and squatty. Looks a lot like every other lexus sedan. Previous generation was the right look.

  • avatar

    I see this as simply big sedans especially are DEAD.

    I have to say that if you spend time with the new LS in person, you get inside, it has real presence. It does grab your eye. Can you say that about any older LS?

    I do think losing the V8 was a mistake though. How much that would actually matter to sales, I can’t imagine much.

  • avatar
    Jeff S

    Lexus has managed to screw up the front of their cars which resemble the foil on a Remington electric razor. Toyota has managed to make most of their vehicles uglier than they were before. Simple minimalist clean lines were what made past Lexus elegant and classy.

    • 0 avatar

      I find your comparison inaccurate, insulting, and unfair both to Remington and to the ’61-’65 Lincoln Continental.

      I joke, obviously, but upon second thought kind of not. The Continental is in fact more Remington-like and, of course, leagues ahead of the LS style-wise.

  • avatar

    I gotta say that I once wanted to purchase a used Lexus for my wife…

    But the recent models, and that predator grille, do little for me. Lexus seems to have lost the thread and aren’t competitive, in style and competitiveness, with the German 3.

    Reliability? Sure thing. An ES350 is possibly being considered as a replacement for my wife’s 2008 Infiniti M35x but she is also eying a low mileage 2018 Regal TourX wagon… because wagon! Or – heaven help us – an Audi.

  • avatar

    I saw a newish ES300 on the street a couple days ago, and thought, boy, that really isn’t a bad looking car. Uh-oh, I hope that was not a symptom of catching the virus!

  • avatar

    Consumer preferences, perceived cheaper gas, higher ride height of SUVs and demographics of its customers have dictated to Lexus what their buyers wanted. Lexus just didn’t read the tea leaves with the sedans.

    Fortunately, I’m not their typical buyer and am licking my chops at the idea of getting one of the new LS’ for a nice discount in 4-5 years. I REALLY like the redesign… more interesting design in and out, great seats, lots of room, more engaging to drive. Basically like a CT6 done right.

  • avatar

    Stated at the time that Lexus was not going to meet its modest sales target of 1k/month due to various factors.

    First – Toyota made the mistake in delaying the successor to the LS460 – which ended up being in production for 11 yrs (an eternity in the automotive industry), making due w/ a 2nd (more extensive) refresh, but w/o any powertrain upgrades.

    Flagship buyers tend to want to buy the newest/”best” and trying to eek out every penny from the LS460 did no favor to LS sales.

    2nd – the sleeker profile of the LS 500 cut down on rear passenger space compared to the LS460L; these days, the ES has a roomier rear passenger compartment.

    3rd – V8 no longer available. Sure, the TTV6 has more torque than the old NA V8, but is down in power compared to the Germans – which not only offer a TTV8, but a V12 for their top line variants (as stated, buyers in this segment want the “best” – and that includes more power).

    Toyota does have a new TTV8 in development, but it remains to be seen if the LS 500 will get it and even if it does, it may be too little, too late.

    4th – reliability doesn’t factor in as much due to (a) the Germans having improved in that dept. since the 1990s (albeit not up to Lexus levels) and (2) the fact that the majority of buyers lease, making long-term reliability a non-factor (once the lease is up, they just lease a new model – again, getting the newest/”best”).

    5th – greater competition, not only from buyers moving to CUVs/SUVs, but from the likes of the G90, Continental and CT6 (chipping away at LS sales); in Canada, the F/L G90 has overtaken the LS in sales.

    However, unlike for say, Mercedes, where S Class owners may have switched to the GLS or G-wagon, LS owners really don’t have an option aside from the aging GX/LX – the LX in particular being a modest seller.

    6th – styling/sheetmetal. The Lexus design language is polarizing, but don’t think this is as big of an issue as some may think. The RX/RX-L is probably the worst example of the design language and yet is the best-seller for the brand.

    The LC 500 is the best example for the design language and sales have been struggling.

    Having said that, flagship buyers do tend to be a more conservative (hence, most flagship sedans looking a bit bland).

    The LS has gone from the best selling flagship sedan (by a good margin) to a distant 3rd, which spells trouble as the US market is by far the largest market for the LS (the LS isn’t a big volume seller in Japan).

    W/ the likely demise of the GS, can see Toyota sharing more components btwn the Toyota Crown (which sells well in Japan) and the LS.

    There have been reports that the IS will eventually switch to Mazda’s upcoming RWD platform, as well as using the new Mazda inline-6.

    If accurate, shows that Toyota isn’t finding ROI enough to warrant investing too much into their RWD sedan lineup.

  • avatar

    LS500 is a massive mistake. Most LS owners dislike them, including me. The car is 205 inches long yet feels cramped inside. The LS always held the crown of having the world’s smoothest V8. Dropping it for a V6tt was a horrible idea. Granted, luxury sedans aren’t selling well in general but most Lexus people, especially LS owners don’t know WTF they were thinking. The G90 is what the LS should be, soft and comfy. I’ve never desired once to chase a Porsche up a mountain in my LS430…but it sure does drive wonderfully. The LS once knew EXACTLY what it wanted to be, and nailed it A++++.

  • avatar

    Not like I could ever afford any LS new, but our 17 YO 430 has a nice tall greenhouse and enough punch to get around with authority…it’s a keeper, only has 109K on it right now.
    The newer ones just don’t do anything for me..That gaping maw kills it.

  • avatar

    I don’t exactly think it’s ugly I just think there must be a way to convey more “presence” in the styling.

    • 0 avatar

      +1. I have seen several of these, and each time I think it is the new ES350. Ugly grille, shape like ES, no interior size advantage over the grown up midsize ES. Years ago ,1992, when I bought an LS 400, I got a V-8 Lexus for the price of a 6 cylinder Mercedes. Now I struggle to find the advantages.

  • avatar

    I hope they end this phase of their styling.

  • avatar

    It’s the looks, and not necessarily the front end, that are holding it back. The entire middle of the car is wrong, with a window shape that makes no sense as you move to the back, and it extends far too backward on the car to make an elegant shape. The interior is a work of art.

  • avatar
    Michael S6

    Ugly design, so so performance, and poor reliability. I am surprised that they sell them at all even at current level. Any German, Korean, and Cadillac (ct6) luxury cars are a step ahead.

  • avatar

    Even Cadillac looks restrained compared with this car.

  • avatar

    It looks ugly, and it has a v6 that is turbocharged. What is to like? A new Genesis G90 is the old Lexus LS. If you really want a soft Toyota with a V6 that is ugly, get a Avalon.

  • avatar

    My take is this: LS, Supra, LC, 86 and the like at this point are projects favored by Mr. Toyoda. Mr. Toyoda I believe sees these niche models are important to the overall health of Toyota/Lexus. In addition to brand image, they allow his companies to experiment with other configurations, drivetrains, materials etc. None of them are probably profitable but Mr Toyoda I think does not care. Once he and his proteges steps down, watch for the bean counters to take over.

    • 0 avatar

      While Toyoda has pushed ToYoCo to a more sporty bent, at the same time, Toyoda had to be talked out of killing the GS the last time around and it seems that he will finally be getting his wish.

      Also, the heavy-lifting on 86 and Supra was done by Subaru and BMW, respectively, and it seems like Mazda will be doing the heavy lifting for the IS down the road.

      The best thing Toyoda has done is making GRMN a performance line and expanding the TRD line.

  • avatar

    The problem is that it suffers from “Modern Lexus” flu. That is a hideous look that tries too hard and shows bad taste in as many ways as the dollars it charges.

  • avatar

    I liked every LS generation (weak styling on the 01-03, before they sharpened it in 04), but don’t like the current model’s styling at all. I’d never buy one, because the exterior is ugly and incongruent, and the interior is overworked.

    They shot themselves in the foot trying to go for a “bold statement” or what have you, and also in the elimination of the V8.

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