Competitors Underestimate Lexus

It was only a month ago that BMW’s top U.S. marketing executive predicted that new luxury cars from Toyota and Nissan would not hurt his business much for at least a couple of years, until they establish reputations.

But in its first month on the market, Toyota’s Lexus is already outselling BMW in the United States. Toyota officials said an early survey of buyers showed that 15% were trading in BMWs.

Carl Flesher, BMW of North America’s vice president for marketing, told reporters in September he expected most early buyers of Lexus and Nissan Infiniti cars to trade domestic luxury models, especially Cadillacs and Lincolns. As the new cars build images for luxury and quality, he said, more BMW and Mercedes-Benz owners would be tempted to switch.

Flesher contended that it is much too soon to measure the market impact of the Japanese models.

“I think we need six months to see how this is going to gel,” he said.