LS Sales Prove That the Sedan Isn't Dead Yet
Daily Slideshow: Sedans are dying off left and right, yet the new Lexus LS is selling like hotcakes. So what gives?
Exception to the Rule
Things have looked rather gloomy for the good old fashioned American sedan in recent years. As more and more buyers flock to SUVs, automakers are simply abandoning passenger cars as sales continue to plummet. There's just one problem with this little bit of common thought, however - the new Lexus LS is selling like hotcakes.
Defying the Odds
Lexus' flagship sedan has all the attributes that we've long been told are undesirable - it's a four-door car, it has that much-berated spindle grille, and as a flagship product, it isn't cheap, either. Despite all of this, the new LS posted an incredible 128% sales increase in 2018 as Lexus moved 9,302 examples.
New Number Two
Even more amazing, those figures made the new LS the second best-selling flagship luxury sedan in America last year, behind only the perennial champ, the Mercedes S-Class. So it's fair to ask - how in the heck is Lexus defying the odds as other automakers like Ford and Chevy are simply giving up on cars?
Pulling Investments
For starters, most other automakers gave up investing money to make their passenger cars better because, well, they just stopped being profitable. Why spend development money on a product that people aren't buying? Thus, most sedans on dealer lots today feel more like something built five to ten years ago instead of a truly modern vehicle.
Risky Bet?
Lexus, on the other hand, has spent considerable time, effort, and cash to make their sedans truly world class. They clearly don't believe the hype surrounding the "inevitable" death of the passenger car. And that seemingly risky bet appears to be paying off, at least for now.
Cautionary Tale
Many point to the financial crisis of 2008-2009 as proof that automakers should exercise caution following today's trends too closely. Prior to that major event, Americans were buying up big trucks and SUVs like hotcakes. But once gas prices skyrocketed, dealers couldn't give them away.
Hedge Your Bets
Obviously, predicting the next economic collapse isn't easy, and it may not even happen again in our lifetime. But buyers are also famously fickle when it comes to these sorts of things, and having a wide array of products is certainly a hedge against changing future trends.
Strengthened Position
"It’s a much stronger position to have cars in your lineup, even if sales volumes are smaller today," Lexus spokesman Ed Hellwig said in a recent investor call. "Some people find the sedan experience superior. People may realize, ‘I don’t need two SUVs,’ or they just don’t want to drive one every day."
Taking Advantage
Still, even the LS' much-improved sales success from 2018 pales in comparison to what Lexus' flagship sedan once enjoyed. Lexus sold a whopping 43,000+ of them to Americans back in 1990, after all. But as long as they're making a profit, why wouldn't Lexus take advantage of a depressed marketplace?
Filling the Gap
And that's most likely the biggest catalyst behind the LS' unlikely success story - Americans have fewer and fewer good, solid options when it comes to passenger cars these days. Lexus has built a product that's vastly superior to much of the competition, and it's cheaper than its rivals to boot. And for now, at least, they're more than happy to fill an ever-growing market gap.
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