Mercedes Benz Could Overtake Lexus as Top-Selling Luxury Brand in U.S.

After a decade as the top-selling luxury brand in the U.S., it appears that Toyota Motor Corporation’s Lexus brand may soon be deposed by Daimler AG’s Mercedes-Benz division. Over the past year, the Japanese automaker has seen a record number of safety recalls across its entire fleet.

While Lexus has seen its U.S. deliveries increase by 19% to 107,430 during the first half of the year, Mercedes’ U.S. sales have surged 25% to 106,972 during the same period, and those numbers don’t include sales of the German automaker’s Sprinter commercial van.

According to, Lexus’ U.S. market share could fall to 1.98% this year, down from 2.1% a year earlier. If the prediction is correct, Lexus would fall behind both Mercedes and the world’s leading luxury brand, BMW. During the first half of the year, BMW’s U.S. sales totaled 100,632 units. vice president Jesse Toprak said, “It’s very likely Mercedes-Benz may take over the lead this year. The cumulative impact of all the recalls hasn’t really shown up yet. It’s more likely to be seen in the second half.”

Toyota has seen its U.S. sales fall for both its namesake brand and its Lexus luxury brand as ongoing problems with stalling engines, rollover risks and leaky fuel tanks have emerged in recent months. These issues came on the heels of Toyota’s worldwide recall of more than 8 million vehicles for unintended acceleration problems in its flagship brand.

Toyota’s U.S. sales president Jim Lentz remains optimistic that the world’s largest automaker will recover from the downward sales spiral. senior analyst Jessica Caldwell said Lexus and its two German rivals are “really neck and neck” in the battle for U.S. sales dominance. She said, “There is a big opportunity there for the Germans.”

BMW spokesman Markus Sagemann declined to comment on whether or not Lexus’ recalls problems have resulted in higher sales for his company. Instead, Sagemann focused on the ongoing improvements BMW is making to its model lineup.  “Globally, we’ll have replaced 60% of our models by 2012,” said Sagemann, adding, “Our model lineup is very strong, and we’ll continue to boost it.”

Toprack said that more U.S. consumers are choosing to lease rather than buy, and that has benefited Mercedes and BMW more than Lexus. He said that less than 30% of Lexus vehicles are leased compared with more than 60% of Mercedes Benz vehicles.

AutoPacific Incorporated analyst Jim Hossack said Mercedes’ C-class sedan has sold well in the U.S. where it competes with the Lexus ES sedan. During the first six months of the year, U.S. sales of Mercedes’ E-class sedan has more than doubled to 27,778 compared with the same period in 2009.

U.S. sales of BMW’s refreshed 5-series have also been strong. The 5-series competes with Mercedes’ E class and Lexus’ GS sedan which has been recalled for engine defects.

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