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Lexus Has A Big SUV Problem

4 January 2020 - Carbuzz

Lexus Has A Big SUV Problem

And it needs to be solved ASAP.

Lexus sales have stalled. As Toyota's luxury brand celebrated its 30th anniversary in 2019, the lack of new vehicles in key segments has been painful. Its German rivals, BMW, Audi, and Mercedes-Benz, currently rule the large SUV segment Lexus once played a key role. Today, the Lexus GX and Lexus LX are dinosaurs, both riding on aged architectures with equally old infotainment displays. Edmunds sales data shows Lexus' market share of 13 percent is down from a peak of 18 percent a decade ago.

Bloomberg also spoke with some Lexus dealerships who admit that the brand is languishing. "We know 2019 was a year that we missed it," said Paul LaRochelle, general manager of a Lexus franchise in Annapolis, Maryland. "We will see Lexus making significant gains in the market over the next two, three, four, five years and beyond."

Unfortunately, we're not there quite yet. As previously reported, a replacement for the large Lexus LX is due to arrive in 2021 – 14 years since the SUV's last complete redesign. The future status of a next-generation GX, the brand's mid-size SUV offering, is still uncertain but we'd be surprised to see Lexus abandon this clearly lucrative segment that includes models such as the BMW X5 and Audi Q7. The largest, most up-to-date, SUV Lexus currently sells isn't even a true body-on-frame chassis SUV, but rather a car-based crossover.

The Lexus RX, which has been available with a three-row option since 2017, has not won over as many customers as hoped. Fortunately, "a lot of new product is coming this way for Lexus down the road," said Bob Carter, Toyota executive vice president of sales for North America.

In the meantime, three of its models are ranked in Consumer Reports' top 10 most reliable vehicles in its annual survey, and J.D. Power named Lexus as its top brand for resale value. What's more, Lexus sold its ten millionth vehicle in 2019. Aside from the typical German competitors, Lexus is also facing a new foe, this time from South Korea. Genesis, in many regards, has become the luxury brand Lexus used to be: "affordable, comfy and stress-free," says Consumer Reports' Jake Fisher.

The upcoming debut of the Genesis GV80 SUV will only be the automaker's first entry into the world of luxury SUVs. The smaller GV70 will follow shortly. Given both current and new competition, Lexus is more motivated than ever to get its new SUVs to market. The consequences of not doing so are simply unacceptable.

 

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