Jim Lentz Would Have Preferred Lexus Invested In a Three-Row Crossover
Which would you prefer: a large, cargo-gulping SUV, or a streamlined, two-door sports car? If you’re anything like yours truly, that isn’t even a question – who needs ground clearance when you’ve got handling on your side? Once upon a time, Lexus agreed with that conclusion, opting to introduce performance cred-boosting coupes in lieu of a Mercedes GL or Audi Q7 fighter. But surveying the current market landscape, Toyota Motor Corp.’s North American CEO Jim Lentz thinks a three-row crossover would have been the better choice.
"In hindsight, if I was making this decision 10 years ago, seeing what I see today, the three-row [crossover] probably would have been the better play to come out first," Lentz told Automotive News. "Strategically that’s a more important vehicle to have than necessarily a lower volume, higher priced image product."
Lentz’s clarified foresight is based on the low price of gasoline and Gen Y’s burgeoning demand for family transport.
Despite replacing a potentially lost opportunity, the Lexus RC coupe isn’t performing poorly by any means when it comes to sales, with 4,258 units moved through the first four months of 2015, more than the flagship LS. Additionally, Lexus sales through April are up 17 percent in the U.S. compared to last year, just behind the top luxury brands of Mercedes and BMW. However, Lentz feels no pressure to move units just to beat the Europeans: "In the luxury business, chasing volume is not a good strategy," he said. "Luxury cars cost a certain dollar amount for a reason. I don’t want to cheapen my cars just to offer a lease that’s $20 a month less."
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Why it matters
Crossovers are indeed still unfathomably popular, with new models seemingly flooding the market with every new cycle. But word on the ground is that’s the bodystyle to have, as confirmed by Lexus division chief Jeff Bracken in an interview with Automotive News last year: "Third-row seating is the No. 1 issue we hear from dealers. We feel like we’re missing a 35,000-units-a-year opportunity. We’re working hard to rectify that.”
With so much money flowing into company coffers, you’d think Lexus would be eager to capitalize on demand for a fresh three-row crossover.
Even without a new third-row luxury SUV, Lexus’ parent company, Toyota, seems to be doing extremely well. The Japanese automaker recently announced that fourth-quarter profits in North America increased by 72 percent, up to $735.6 million. That bump made substantial contributions towards an increase in Toyo’s global operating profits, which are up by 20 percent for the fiscal year to a record $22.99 billion.
With so much money flowing into company coffers, you’d think Lexus would be eager to capitalize on demand for a fresh three-row crossover. However, Lentz says such moves shouldn’t be taken lightly, and consideration must be paid to the catalog as a whole before diving into something new, saying: “I think at some point it’s not sustainable if you end up with just too many body types in your lineup.”
Lentz added that near- and entry-level sedans and crossovers were the top priority, saying: “You’ve got be careful that you satisfy those segments first and then understand strategically which other segments are important to you based on the image of the brand.”
Personally, I’m far more interested in Lexus’ M3/C63 rival than yet another oversized luxury box. But considering Toyota’s current position, I don’t expect those two body styles to remain mutually exclusive if demand for third-row crossovers continues at the current level.
First unveiled at the 2013 Tokyo Motor Show, the Lexus RC is a two-door iteration of the third-generation IS sedan. Styling is a continuation of the brand’s recent language cues, with an enormous geometric grille engulfing most of the front bumper, sharp, angular LED headlights, and a body that’s wider and lower than the IS. The aluminum wheels are available as either 18- or 19-inchers. The interior is decked out in sporting luxury, with brushed metal pedals, leather upholstery laid upon heavily bolstered sport seats, and a seven-inch nav screen. The high-performance RC F model comes with a 5.0-liter V-8 churning out 467 horsepower, enough to propel the coupe to 60 mph in 4.4 seconds.
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Source: Automotive News