BMW Widens Lead Over Lexus Even With Incentive Spending Cut

  • Discounts rose 19% at Lexus, fell 3.6% at BMW, TrueCar says
  • Luxury race uncertain as Mercedes delays monthly sales a day

BMW widened its lead over Toyota Motor Corp.’s Lexus, which boosted incentive spending in November while the German brand cut back, as the three-way U.S. luxury-auto sales race enters the homestretch. Mercedes-Benz delayed its results a day, leaving the year-to-date standings in doubt.

Sales at BMW AG’s namesake brand rose 3.2 percent to 32,003, as deliveries of the X3 sport utility vehicle more than doubled. Lexus gained 6.8 percent to a November record of 29,340, helped by its revamped RX SUV. Daimler AG’s Mercedes said its reporting system malfunctioned.

Lexus, which hasn’t claimed the annual sales crown since 2010, boosted average incentives 19 percent last month as it started year-end promotions early, according to TrueCar Inc. estimates. The wasn’t enough to gain on BMW, which TrueCar said reduced its spending 3.6 percent from a year earlier, while Mercedes trimmed its discounts 7.4 percent. Lexus still spent less per vehicle than the two rivals.

The November results mean Lexus is unlikely to catch BMW for the year, said Eric Lyman, a TrueCar vice president. “It’s something they could manage if they were willing to go nuts on incentives. But I can’t see them doing that just to get the sales crown.”

BMW, which won the 2014 title, through October was ahead by 533 over Mercedes and about 5,500 over Lexus. The November sales increased BMW’s lead over Lexus to more than 8,000.

Lexus, like luxury competitors, enjoyed a surge in SUV sales in November, but its car deliveries slid 17 percent because models such as the IS sedan have gone too long without being refreshed with new technology, Lyman said.

Honda Motor Co.’s Acura luxury unit stayed ahead of General Motors Co.’s Cadillac through November, with 160,342 sales to the GM brand’s 154,480. Cadillac narrowed the gap last month with a 1.8 percent gain to 13,390, as Acura’s deliveries fell 10 percent to 12,244.

If Acura can maintain its lead for another month, 2015 would be the first year in which the Honda brand would join Lexus in beating the Detroit icons, Cadillac and Lincoln, which popularized the idea of luxury cars in the U.S. a century ago.

Cadillac has fallen behind Acura because the GM brand made a strategic decision to end fleet sales and rein in discounts that undermine its premium appeal, Lyman said. A typically equipped Cadillac CTS now costs $60,700, or $13,000 more than in 2013, he said.

“They’re steadfast in saying Cadillac is every bit as competitive as the German luxury brands, and that they’re going to go toe to toe on pricing,” Lyman said. “The downfall is their brand recognition is lower than Germans’, so it will be difficult to win consumers over.”

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