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Lexus steps up its push for profitability

Lexus is to issue termination notices to its network as part of a continuing drive for profitability that’s taking precedence over concerns around market share.

Lexus has a network of 50 sales plus five service centres. “We believe that number gives us the right geographical spread, but we are looking at each centre’s territory and will be issuing new contracts, including the postcodes we want them to cover,” said Lexus GB director Belinda Poole.

Termination notices will be issued in December. The changes will come into effect in January 2011. “We will talk through the changes with the network. They have the choice not to work with us, but I believe they have confidence in the brand,” Poole said.

The purpose of some centres will change from sales to service, Poole said. Year-to-date Lexus’ has a 2.1% share of the premium market down from 2.3% last year.

“We don’t chase volume because we want to be profitable. Our key message is that we have to have a profitable network that delivers customer satisfaction.” 

In April the network was averaging a 0.3% return. “We want to wait for September sales figures, but we will drastically improve on that,” Poole said. 

Lexus plans to offer only petrol hybrid models in around five years. “They outsell petrol now and it’s where the brand wants to be,” a spokesman said.



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