Lexus loses significant portion of Europe sales after Russian pullout

BRUSSELS – The war in Ukraine and sanctions imposed on Russia will have a strong impact on Lexus, which generated about 30 percent of sales in its Europe region in those two countries, with Russia its largest European market overall.

Lexus and parent company Toyota Motor include Russia, Ukraine, Turkey and a number of other non-EU countries in the Europe region. Lexus said it sold 72,441 units in the region in 2021, of which 19,638 were in Russia and 1,881 in Ukraine.

Following Russia’s invasion of Ukraine in late February, many foreign automakers halted sales and production in Russia. Toyota said on March 2 that it would halt production at its Russian factory, while also indefinitely stopping vehicle imports into the country.

“We stopped deliveries as the sanctions stepped in, so the products that were already in Russia are the sales we can count on this year,” Lexus Europe head Spiros Fortinos told Automotive News Europe on Tuesday at a press event in Brussels. 

Through April, Lexus sold 1,738 vehicles in Russia, a decline of 76 percent, according to Russian trade group AEB. Total European region total sales stood at 17,142 units through April, Lexus said.

Fortinos said Lexus expects to keep its European sales outside Russia and Ukraine stable this year at about 50,000 units. Last year, the UK was the brand's second-largest European market after Russia, with 13,840 vehicle sales, with Poland third at 6,081 sales and Spain fourth at 6,601 sales.

The company expects to return to sales growth later this year, when the new generation of its best-selling model, the RX premium large SUV, will be launched in Europe.

The RZ large SUV, Lexus’ first battery-only model, will arrive in Europe in January 2023, adding about 6,000 units of annual sales.

Although SUVs currently account for 87 percent of Lexus sales in Europe, the company doesn’t want to become a SUV-only brand, Fortinos said.

“Customer tastes are evolving; an SUV today is almost the default choice, but we will continue to offer alternatives to SUVs,” he said. Lexus continues to offer the ES and LS sedans, as well as the RC F coupe and the LC coupe and convertible, in many European countries.