AUTOSHOW-Europe has little room for Japanese premium brands

By Chang-Ran Kim, Asia autos correspondent PARIS, Oct 3 (Reuters) - Japanese automakers will struggleto crack the premium car segment in Europe, where tradition andprestige dominate, making their plans to gain global acceptancefor their luxury brands tougher. After nearly 20 years in Europe, Toyota Motor Corp's(7203.T: Quote, , Research, ) Lexus marque sold just 36,000 cars in Western Europelast year, compared with about 650,000 to 720,000 sold each byMercedes-Benz (DAIGn.DE: Quote, , Research, ), BMW (BMWG.DE: Quote, , Research, ) and Audi (NSUG.DE: Quote, , Research, ), anda fraction of Lexus' own global sales of 518,300 vehicles. Even though Lexus, sold in 69 countries, is the top-sellingluxury brand in the United States, analysts say it has a longway to go to join the German powerhouses on the global stage. 'They occupy only a fraction of the European market now, andit'll be the same in the future as well,' said Koji Endo, autoanalyst at Credit Suisse. Making a dent in global luxury car markets is important forJapanese automakers because high-end cars support profitmargins, which are under pressure from the shift to cheaper,smaller cars and the growing need to clean tailpipe emissions. HSBC auto analyst Seiji Sugiura estimates that while Lexusrepresented 7 percent of global sales in 2007, it accounted for16 percent of Toyota's operating profit. Toyota has been trying to use its lead in hybrid technologyto sell the Lexus brand in Europe on the idea of twinning extrapower with fuel efficiency, but this has done little to attractcustomers away from other brands. 'A lot of our Lexus products are still rather U.S.-centric,'Toyota Europe head Tadashi Arashima told Reuters at the ParisMotor Show.

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