Schlicht

Noting that the average age of Lexus buyers is older than competing brands globally, Mr. Schlicht said the brand is positioning itself to broaden sales beyond the baby boomers that have been its traditional core demographic.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Mr. Schlicht said the fall from No. 1 in the U.S. will give Lexus some "breathing space" to prepare for new cars, such as a remodeled GS midsize sedan, noting the brand hasn't introduced a full-size sedan since 2007.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

"We would have ended up at the same level as last year, but now we're probably going to be short," Lexus marketing and product planning general manager Karl Schlicht said in an interview.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

While the U.S. is by far the biggest market for Lexus, Mr. Schlicht said that he is encouraged by positive sales trends in China, Europe and Japan.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

"In some ways, it's kind of a relief that allows us to change the brand direction a bit and refocus on the next generation of cars without having that heavy burden" of being the luxury sales leader in the U.S., Mr. Schlicht said.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Mr. Schlicht, the first non-Japanese manager to run Lexus, acknowledged the division is likely to relinquish its longtime position as the top-selling luxury brand in the U.S.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Mr. Schlicht also said Lexus needs to broaden its lineup with more sporty two-door vehicles and hinted a successor to the discontinued SC coupe may be on display at the North American International Auto Show in January.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Mr. Schlicht said there are no plans to move production of Lexus vehicles from Japan to markets such as the U.S. to cope with the yen's surge to recent all-time highs.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Bloomberg News Toyota Lexus chief Karl Schlicht says output disruptions cut into sales.

Toyota Ready to Concede Lexus's Sales Crown Chester Dawson 2011

Schlicht also mentioned trading equity in the operation in exchange for work being done.

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