Lexus may be profitable in Europe in two years
|Bruce Gain is an Automotive News Europe correspondent in France.|
Toyota expects its Lexus brand to make money soon in Europe despite a very tough competitive environment and an unfavorable yen/euro exchange rate.
"Lexus can be profitable in two to three years even though production will remain in Japan," said Didier Leroy, the CEO of Toyota Motor Europe, on the sidelines of the Paris auto show.
Leroy did not talk specifics about how much Lexus loses in Europe. A Lexus spokesman told Automotive News Europe that the brand's profits in Europe hinge on its hybrid lineup, which accounts for 85 percent of its sales in western Europe and 60 percent of its sales in Russia.
Lexus is preparing to launch a new hybrid model based on the Lexus LF-CC hybrid coupe concept it unveiled at the show.
Leroy also said its Lexus sales volumes in Europe were not high enough to produce the car locally in the region at the moment but he did not rule out future production in the region.
Leroy expects Lexus sales in Europe, including Russia, to be 46,000 units this year compared with 44,000 in 2011.
Toyota Motors Europe, including the Toyota and Lexus brands, was profitable during its last fiscal year thanks to its financial services division but its automotive unit lost money. Leroy said Toyota Europe's automotive business and its financial services division in Europe should be in profit for the fiscal year ending in March 31 2013.
You can reach Bruce Gain at email@example.com.