Lexus USA GM Mark Templin Talks Small Cars

Lexus IQ

David Shepardson of The Detroit News recently attended a reporter’s lunch meeting with Lexus USA General Manager Mark Templin in Washington, and came away with plenty of insight into where Lexus is heading.

The entire article is worth reading, but let’s focus on what Templin had to say about the possibility of Lexus releasing a sub-compact model:

[Templin] noted that Lexus won’t need to build small “A” and “B” segment vehicles to meet new corporate average fuel economy standards — because of Toyota’s fuel efficient models.

“If you look at it realistically, I think you’re going to see a big chance change in the luxury car industry over the next 10 years,” he said.

Other luxury makers may have to build large volumes of smaller vehicles to meet the [fuel economy standards of 54.5 mpg by 2025] requirements — meaning Lexus may not regain the title by choice.

“Unfortunately in the U.S. right now, there’s not a lot of consumer demand for really small cars,” Templin said.

He said consumers aren’t clamoring for luxury small cars — and he noted they aren’t very profitable. Templin said in the long term if Lexus doesn’t build very small cars it will “probably not” be the largest luxury brand in the United States.

“That’s not important to us,” Templin said, saying they’d rather be first in quality, value, customer experience and profitability.

As the article mentions, most other luxury auto manufacturers have no choice but to import their smaller European vehicles in order to meet the soon-to-be-strict fuel economy standards in the USA, which is a requirement that Lexus doesn’t have to worry about due to the efficient lineup of their parent company, Toyota.

For the time being, I have to agree with the strategy — for better or worse, American consumers just aren’t interested in small vehicles. In my mind, I can see Lexus creating an A or B segment vehicle for Europe (& Canada) first in order to better compete in that market, and then importing it into the U.S. once attitudes change (and as a huge proponent of a Toyota IQ-based Lexus, I sure hope I’m right.)


One other highlight from the Detroit News article:

[Templin] told reporters…that the company will see “a pretty sizable increase” in 2012 in sales — as Lexus introduces nine or 10 new or refreshed models.

Templin noted that many of Lexus models had been at the end of their lifecycle – and that 2012 will be a big year.

“It’s going to be a really intensive launch year for us,” Templin said. “Those products are coming with really exciting stuff… Everything is more focused on driving dynamics.”

I’m sure we can all agree, 2012 can’t come fast enough.

[Source: The Detroit News]