April 4, 2014 7:00 pm JST

Mercedes tops Lexus in Japan in fiscal 2013

TOKYO -- German carmaker Daimler's Mercedes-Benz outsold Toyota's Lexus in fiscal 2013 for the first time in five years in Japan.

     The strong showing comes from modestly priced compact models, which attracted drivers looking for affordable luxury as the economy bounced back. Sales also got a last-minute lift as buyers rushed to beat the consumption tax increase on April 1.

     Daimler sold around 60,000 Mercedes-Benz cars in the year through March 2014, up 40% on the year. Toyota, meanwhile, sold 49,435 Lexus cars, up 13.1% and the highest number since it launched the brand in Japan in 2005. 

Not just for the rich

The German automaker is expanding its customer base by rolling out new entry-level models aimed at people who have never owned a Mercedes. In January 2013, the company revamped its A-Class cars for the first time in eight years. Its lowest-priced model goes for less than 3 million yen ($28,600). Nearly 40% of Mercedes-Benz's buyers chose the A-Class, the CLA-Class or the B-Class, which are mostly priced in the 3 million yen range.

     That segment is one of the most competitive in Japan. Automakers are trying to reach a wider swath of customers by projecting an image of affordability, as well as luxury.

     In September 2013 Volkswagen AG's Audi Japan unit launched a fully remodeled version of Audi's popular A3 Sportback subcompact at a starting price of 3.17 million yen.

    And the German automaker unveiled a new Volkswagen Golf in Japan in June 2013 that carries a sticker price of 2.58 million to 5.29 million yen, its first makeover in four years.

     The new entry-level models lowered the average age of Mercedes-Benz's customers. According a Mercedes-Benz Japan official, the share of A-Class buyers aged 40 or younger has risen from 30% to 50%. Many buyers whose children have left home are switching from domestic makes to foreign ones. Roughly 40% of those bought the A-Class in 2013 switched from other brands.

     At Toyota, people are looking to get back on top in the luxury car market. "Our product lineup was quite insufficient," said a senior Toyota official. Lexus is Toyota's highest-end make and it has few products in the 3 million yen price range.

     Toyota introduced a remodeled hybrid Lexus CT, its most affordable model, priced at 3 million yen to 4 million yen, in January. It is also considering launching the Lexus NX sport utility vehicle to regain lost ground.