Lexus: No Plans to Release Sub-$30k Models

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Lexus will not be heading downmarket to compete with its German competitors, says Lexus USA general manager Jeff Bracken in an interview with Automotive News:

“We will not head down below $30,000,” said Bracken in an interview here. “We have Toyota and Scion to handle that price level for us.”

Bracken acknowledges the CLA and 1 series are attracting younger, first-time buyers, but said it’s too early to say that will help Mercedes and BMW long-term.

He said: “We don’t know how loyal those new customers will be.”

Toyota USA senior vice president also weighed in on the issue:

Bob Carter, senior vice president of Toyota Motor Sales U.S.A., said Mercedes and BMW need small, high-mileage vehicles to meet stricter 2016 U.S. Corporate Average Fuel Economy standards. But Lexus has sister brands Toyota and Scion to carry that torch, he said.

That’s a competitive advantage that lets Lexus concentrate on more premium and higher-margin vehicles, Carter said.

“By not diluting its brand image, Lexus will stay focused,” he said. “It lets Lexus hit on higher levels, in segments more traditionally associated with luxury.”

By running counter to its competitors, Lexus has an opportunity to separate itself from the pack. BMW & Mercedes are cashing in on their rich luxury heritage by introducing affordable models, whereas Lexus is now looking to occupy the more rarified position these brands used to occupy a decade ago — an interesting turn of events, to be sure.

[Source: Automotive News]