Exclusive: Lexus promiscuous buyers beware: The brand’s promocontinental buyers are going to pay a steep price.
A new report from The Wall Street Journal and Bloomberg News reveals the Lexus brand is set to be a $2 billion cash cow by 2021, with $1 billion of that coming from Lexus dealerships.
The Lexus deal was the biggest ever by a luxury brand in the U.S. and a record in terms of sales volume for a luxury vehicle.
“Lexus is becoming a billion-dollar brand,” said Adam Bierut, managing partner of brokerage CBRE, in a statement.
“This deal has been a long time coming, and we’re thrilled that the brand is poised to grow even bigger.”
Bierut’s firm, Bieruts Bierum Partners, predicts Lexus sales to reach $6 billion this year and $7 billion by 2021.
It said Lexus may be able to make another $1.5 billion in revenue from its dealerships by 2020.
The Lexus partnership comes at a time when Lexus is looking to expand into more markets, including Mexico, China, Canada, Europe, the Middle East, Australia, and South Africa.
In 2019, the company said it will be bringing back a number of its iconic models in Mexico and Asia, including the Kia Soul, Lexus CT-F, and Lexus RX450h.
It also is in talks to bring back its sporty S model, which was discontinued in 2018.
Lexus also recently began making its own premium SUV models in Asia and Europe.
Lexus plans to launch its own SUV in Mexico next year, and the brand will also launch a premium SUV in Asia, Europe and the Middle West in 2021.
Bieruts analysts expect that luxury brand Lexus to sell about 2 million vehicles in 2021, and that the automaker could sell another 2.6 million vehicles by 2021 if the company stays on track with its plans to expand markets.
The Kia-Lexus deal will mark Lexus’ fourth deal with a brand-new luxury brand.
The company also recently signed a $1 million investment from BMW and the $5 million investment was made from Jaguar Land Rover.
Lexuses CEO and Chairman Tod Toreson said in a prepared statement that the deal is an “unparalleled achievement for Lexus” and that it is a significant milestone for the brand.
“The partnership is a direct reflection of our long-standing partnership with BMW and Jaguar Land Rovers, and it marks the first time Lexus has partnered with BMW in the luxury SUV segment,” he said.
“The K-car program is designed to drive sales growth across Lexus markets and beyond, and with this new partnership, we’re able to help drive more sales and profit growth.
The brand is a strong global leader in the segment, and today’s deal is further proof of that.”
Bertrand Romand, an analyst at IBISWorld, said the new Lexus deals are “an example of the growth of the luxury segment.”
“For the first five years, Lexuses luxury SUV has remained the most popular luxury brand, and its growth continues to accelerate as brands like BMW and Lexis expand their presence in the industry,” Romand said.