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Sales at Toyota's Lexus brand slide in first-half as sedans suffer

A Lexus logo is seen at the 2017 New York International Auto Show in New York City, U.S. April 13, 2017. REUTERS/Lucas Jackson

TOKYO (Reuters) - Toyota Motor Corp <7203.T> on Friday said its luxury Lexus brand suffered its first fall in half-year global sales in six years as demand for its sedans tumbled in the United States, its biggest market.

Sedans, traditionally a mainstay for automakers including Toyota and Honda Motor Co Ltd <7267.T>, have fallen out of favor in their key U.S. market in past years, sending many carmakers scrambling to manufacture more larger vehicles including SUVs and trucks.

Toyota said it sold 305,169 Lexus vehicles worldwide in the six months to June, down 4.4 percent from 319,275 vehicles a year earlier. Sales slumped 10 percent in the United States, which comprises nearly half of Lexus's global sales, and 23 percent in Japan, while jumping 30 percent in China.

"The U.S. passenger car market has been very challenging, and this has affected sales," Toyota spokesman Maki Niimi said.

He added that the automaker expects annual sales to slide about 4.0 percent this year to around 650,000 units, as the recently launched LC sports coupe model and a revamped version of its marquee LS sedan model later this year lift sales slightly in the coming months.

While Lexus continues to enjoy solid U.S. sales of its NX SUV crossover model, analysts said that the brand overall had fallen behind rival luxury brands with newer sedan offerings including Daimler AG's (DAIGn.DE) Mercedes, which recently launched its E-Class range, and BMW's (BMWG.DE) 5-series.

"It's a model cycle issue," said Janet Lewis, head of Asia transportation research at Macquarie Securities. "You have two core competing products recently launched (by Mercedes and BMW), while the LS is pretty long in the tooth."

Lexus sold just 1,855 units of its LS 460 model in the United States in January-June, down 35.2 percent from a year earlier.

Overall, Toyota, the world's second-biggest automaker, expects to sell 10.25 million vehicles globally this year, down a touch from last year.

(Reporting by Naomi Tajitsu; Editing by Christopher Cushing)