Lexus To Sell New Luxury Hybrid

Posted on May 27, 2009 by LCT Staff - Also by this author - About the author

TORRANCE, Calif. — Toyota Motor Corp.’s Lexus unit, struggling with the worst slump of its 20-year history, aims to sell 25,000 new luxury hybrid Lexus sedans a year in hopes the fuel-efficient model can revive demand for the brand.

The HS250h, the seventh gasoline-electric auto in Toyota’s U.S. lineup, should get 35 miles (56 kilometers) per gallon of gasoline in combined city and highway driving when it goes on sale in late August, Greg Thome, a Lexus spokesman, said Tuesday. Toyota hasn’t announced pricing yet.

Sales for Lexus fell 37% through April, mirroring the overall plunge in U.S. demand for autos this year. Toyota’s Prius and other gasoline-electric models have also lost popularity as fuel prices in the U.S. dropped 38% over the last 12 months.

“Given where fuel prices are likely to be later this year, 25,000 sounds pretty optimistic,” said Jack Nerad, executive market analyst at Kelley Blue Book, an Irvine, California-based automotive research firm. “Without fuel prices that are consistently higher, it’s hard to know the true size of the hybrid market.”

U.S. hybrid sales, which jumped for part of last year when gasoline prices surged to more than $4 a gallon, have since dropped 40% this year to 74,640, according to Bloomberg data. U.S. gasoline prices now average $2.425 a gallon, according to AAA’s Daily Fuel Gauge Report Web site.

Higher Stanards

Lower Lexus sales last year added to Toyota’s $4.6 billion loss in the fiscal year that ended in March, the first for the Toyota City, Japan-based company in six decades.

The sales target for the HS is below Toyota’s January estimate of first-year sales of as many as 30,000 units, given at the Detroit auto show.

The Obama administration said May 19 it will push carmakers to lift fuel-efficiency for new vehicles to an average of 35.5 mpg by 2016. Toyota is ranked as the most fuel-efficient large automaker, with a fleet of models that a combined 29.7 mpg in 2008, according to the U.S. Environmental Protection Agency.

The midsize HS250h’s battery pack, electric motors and 4- cylinder gasoline engine provide the equivalent of 187 horsepower, Hiroyuki Koba, the car’s chief engineer, said in an interview May 13. The hybrid system is modified from that used in Toyota’s Camry Hybrid, he said.

Lexus’ current hybrids are the RX400h sport-utility vehicle and GS and LS sedans, which unlike the HS250 are also available as gasoline-engine only versions. Toyota’s new 2010 Prius hybrid, rated as getting 50 mpg, goes on sale next week in the U.S.

Toyota has sold more than a million hybrids in the U.S. since 2000, including more than 170,000 such Lexus models.

Lexus models, which sell for an average of $41,000 according to, are the U.S.’s top-selling luxury brand.

U.S. sales operations for Toyota and Lexus are based in Torrance, California.

Source: Bloomberg News

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