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Mercedes eyeing top spot in luxury car segment; Lexus hit hard by recalls may relinquish the throne held for 10 years

Toyota Motor Corporation’s Lexus brand ruled the U.S. luxury car segment for a decade but is not in danger of being toppled by Mercedes-Benz after a series of vehicle recalls this year.

Lexus’ image is battered by a number of recalls of their vehicles due to problems like stalling engines, fuel leaks, or instability during emergency maneuvers. Aside from the Lexus brand, the Japanese car manufacturer’s main brand also had to recall about 8 million vehicles due to risks linked to unintentional acceleration.

According to researchers, it is highly possible that Mercedes-Benz will take over Toyota when the figures reflecting the impact of the recalls come in on the second half of 2010.

For the first six months of this year, Toyota’s deliveries in the U.S jumped by 19% or roughly 107,000 vehicles. Mercedes-Benz on the other hand showed a stronger performance with a 25% increase translating to about 106,972 units. The market share of Lexus is projected to go down to 1.98% lagging behind Mercedes-Benz and BMW. Basing it on the numbers alone, it will be a rough battle of the sales units of the two automotive luxury brands.

The dipping numbers of Lexus followed the April recalls of the GX 460 tagged as “safety risk” by Consumer Reports after finding about the roll over risks during high speed maneuvers. Back in May, the Lexus LS 600h and the LS460 halted its production and units were recalled.

In June, it was the turn of the HS 250h sedan. July involved recalls of 7 models due to defects with the engine.

The Lexus brand has been struggling to stand up from these recalls. Unless they are able to manage the damage well, we can expect the premium brand of Toyota to lose its crown to the German brand.

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