Lexus Executive: Lineup Needs Subcompact Crossover & Three-Row Crossover

[Tragic Bronson]

http://www.autonews.com/article/20170116/OEM03/301169958/lexus-execs-see-holes-in-the-lineup

Possibilities: Crossovers, performance models, EV

DETROIT -- Lexus is rounding out its car lineup this year with the LC halo coupe and the LS flagship sedan unveiled in Detroit. But executives still see plenty of gaps for new vehicles.

Potential areas of expansion include a subcompact crossover, a three-row crossover, a broader range of F-badged performance cars and even possibly a Tesla-fighting all-electric entry.

Lexus General Manager Jeff Bracken said the brand is forgoing as many as 70,000 vehicle sales a year by not competing in the subcompact and three-row crossover segments alone. Last year, Lexus trailed first-place Mercedes-Benz by fewer than 10,000 vehicles in the U.S. luxury title race, with sales of 331,228 to the German rival's 340,237.

Plugging the gaps won't guarantee a brand sales boost of 70,000 vehicles. Entries such as a three-row crossover might siphon sales from the midsize RX, while a subcompact crossover might partially cannibalize the compact NX, Bracken acknowledged.

But the musings show Lexus sees lots of new volume still prime for the picking.

"We do think there's room to fill some gaps that still exist for Lexus," Bracken said at the Detroit auto show, where the Japanese luxury maker unveiled the next-generation LS sedan.

One gap is the subcompact cross- over tier. Lexus might tap booming demand in that segment with a vehicle based on the UX Concept shown at last year's Paris auto show.

"That's a gap we are watching very closely," Bracken said. "We're very fixated on trying to move that conversation forward with our parent corporation."

Lexus is giving up 25,000 to 35,000 annual sales by not offering a subcompact crossover, he said.

Lexus is also weighing a three-row unibody crossover that would drive more like a car than the hulking body-on-frame GX and LX SUVs. Another 35,000 annual sales are up for grabs if the brand were to introduce such a three-row, Lexus estimates.

The brand expects it could reap more marginal volume from additional F performance variants.

"We still have performance gaps to fill, and we can do that really well with the F," Bracken said. "We feel we've been missing it on the higher end when it comes to passenger cars."

He declined to identify nameplates, but possibilities would include the LC and LS.

Lexus has only the GS F sedan and the RC F coupe. Together they accounted for about 2,300 sales last year, Bracken said.

In perhaps the brand's biggest departure, Bracken said Lexus is also considering an electric vehicle. Such a move would be a change for a brand of Toyota Motor Corp., which has long been skeptical of EVs in favor or the gasoline-electric hybrid technology it helped pioneer with the Toyota Prius.

Lexus began considering EVs after the Paris show in September, during which European luxury rivals pushed the technology. Mercedes-Benz announced it would launch 10 new EVs by 2025.

"It was amazingly focused," Bracken said of the 2016 Paris show's EV aura. "Subsequent to that show, from my standpoint, we began conversations with our product planners."

Lexus has just begun investigating possibilities. But Bracken cited more stringent emissions rules and environmental awareness as two reasons to give EVs a look.

"I think we'd have our head buried in the sand if we didn't thoroughly study all electric," Bracken said. "You definitely have to do that."

 

[mordecai]

And why did they wait until MB and BMW showed their hand? And already have EV products in the market?

They had their head buried in the sand, but have just now taken it out to look around.

Anyway -- better late than never.

 

[corgilady2011]

As it relates re: three row unibody crossover (GX replacement)

edit: re, for privacy - but does seem I have seen some other sources tend to suggest they may be considering turning GX into a unibody and rolling alongside 7-seater 4RX.

While interesting for them to acknowledge this, I would much rather see a true sporty SUV that could rival performance e.g. RR Sport, Cayenne, higher trim GLE, etc. I love my 4RX F-Sport but the performance is abysmal compared to others that I was looking at. If I was not focused on more long-term reliability and durability rather than performance I would have immediately left Lexus and likely purchased a Porsche.

If they do not improve on that part of the line-up in the next 5-7 years, I will be hardpressed not to consider a Porsche or perhaps something such as SQ5/SQ7.

 

[mikeavelli]

Good to seem them acknowledge holes. I no longer will ask Lexus for speed with decisions ala the Germans. Their slow, steady approach works for them. The NX is no better example.

I would have liked to hear 4 door coupe

 

[mmcartalk]

I still think, as I have for years, that one of the holes in the Lexus line-up is lack of an AWD system for the ES. Some Toyota/Lexus-designed hybrid systems function as AWD, with regular electric-boosted FWD up front, and two electric booster-motors in the back, one on each rear wheel. But, as I understand it, the ES hybrid system doesn't operate that way.

 

[James]

I still think their biggest hole is quicker engines. Now the LC and LS are showing that they are getting quicker but it's true the SUV they are so far behind. The NX and RX engine is a fine base engine but they need a quicker option. Their cars look aggressive and sporty but aren't quick enough for the looks. Now with the LC and LS speeds we know Lexus can do it but will they?

 

[Ian Schmidt]

I still think, as I have for years, that one of the holes in the Lexus line-up is lack of an AWD system for the ES. Some Toyota/Lexus-designed hybrid systems function as AWD, with regular electric-boosted FWD up front, and two electric booster-motors in the back, one on each rear wheel. But, as I understand it, the ES hybrid system doesn't operate that way.

An AWD ES would potentially be a goldmine of sales for large parts of the US and Canada. I don't understand at all why there isn't one.

 

[IS-SV]

Great to see them acknowledge holes in product line, plus I agree holes in engine lineup are significant too.

 

[krew]

krew

Lexus USA general manager Jeff Bracken sees some holes in the lineup.

View the original article post

 

[automovista]

Not to impugn the high-level view of Mr. Bracken but...duh.

 

[Rob Grieveson]

Have to agree about the ES surely an awd should be available especially in the USA - this car also needs sharpening up style wise looking stodgy and somewhat dated.

 

[mmcartalk]

Have to agree about the ES surely an awd should be available especially in the USA - this car also needs sharpening up style wise looking stodgy and somewhat dated.

Maybe they figure that ES customers who want AWD will look at the RX instead....though, in my book, it's nice to have that kind of traction in sedans. I don't quite agree, though, on the ES redesign. First, an ES is supposed to be stodgy...if it wasn't, it wouldn't appeal to its core-buying group (and, if you look at the numbers, that is a lot of buyers). Second, it just got a new spindle-grille that is anything but stodgy.

 

[IS-SV]

Lol, that's news to me that "ES is supposed to be stodgy". That might help explain declining sales and interest level. Yawn :mask:

Oh yeah, on topic Lexus is lagging a bit on product offerings currently.

 

[Rob Grieveson]

I have to agree with S-SV why should any Lexus product have to look stodgy - i think as i have stated before the ES no longer really fits into the current Lexus range. The range has changed and is in pursuit of the German brands hence the sporty/dynamic looks of all recent new launches more power etc. I agree the latest ES is quite an improvement but still think it needs more flair ala the new Lexus models more recently launched. I look forward to the next ES - at the moment even the new Camry is much more exciting to look at and that i think is saying something. Well done to Toyota on that a big improvement lets hope they follow through with the Lexus range.

 

[James]

I know the ES is less sporty but man it has been successful over the years for Lexus. I know sales are down but what sales aren't for a sedan right now? Maybe they need to add the AWD and maybe a quicker engine offering for the next ES.

 

[mikeavelli]

I assume an AWD ES would just add another bite into GS cannabilization. I guess dealers are not begging for it as I've never heard any dealers complaining about need for an AWD ES. I've always heard things like need more SUVs, need more higher end cars (which are coming).

I hope a 4 door coupe is coming and I know its not for me but 4 door coupe SUVs are all the rage. I can't go 10 feet without seeing a new Mecedes GLE down here all driven by what seems to be wealthy women.

 

[mmcartalk]

Lol, that's news to me that "ES is supposed to be stodgy". That might help explain declining sales and interest level. Yawn :mask:

I was using that term as a figure of speech....the ES, in general, appeals to a somewhat more conservative buyer-group than some other Lexus products.

Oh yeah, on topic Lexus is lagging a bit on product offerings currently.

Yep...an AWD ES.

 

[mmcartalk]

I know the ES is less sporty but man it has been successful over the years for Lexus. I know sales are down but what sales aren't for a sedan right now? Maybe they need to add the AWD and maybe a quicker engine offering for the next ES.

Yep......good post. :thumbsup:

 

[mmcartalk]

I assume an AWD ES would just add another bite into GS cannabilization.

I don't think so. Even with AWD, there's too many differences between an ES and a GS. They appeal to different buyer-bases.

 

[mikeavelli]

I don't think so. Even with AWD, there's too many differences between an ES and a GS. They appeal to different buyer-bases.

They drive night and day different, even just around town. The ES is far more spacious. Totally agree with you.