Toyota is confident that its Lexus brand will be profitable in Europe even with a difficult, highly competitive environment and a not so ideal yen/euro exchange rate. At the Paris Auto Show, Didier Leroy, the CEO of Toyota Motor Europe, said in an interview that Lexus could report profits within two to three years even if production stays in Japan.
Leroy declined to divulge specific loss figures of Lexus in Europe. In an interview with Automotive News Europe, a Lexus spokesman said that the brand's profits in Europe depend on its hybrid lineup, which makes up about 85% of its sales in western Europe and 60% of its sales in Russia.
Lexus is getting ready to launch a new hybrid model based on the Lexus LF-CC hybrid coupe concept it debuted at the show. Leroy added that its Lexus sales volumes in Europe were not currently high enough for the car to be produced locally in the region but he didn’t discount the possibility of future production in the region.
Leroy predicts that Lexus will be able to sell 46,000 units in Europe, including Russia, compared with 44,000 units sold in 2011. In its last fiscal year, Toyota Motors Europe (which includes Toyota and Lexus) was profitable due to its financial services division.
However, its automotive unit reported losses. Leroy is anticipating that Toyota Europe's automotive business and its financial services division in Europe would record profits for the fiscal year that ends on March 31, 2013.