Lexus announced they might built a compact SUV that will compete with the BMW X3, Acura RDX and Infiniti EX35 crossovers — and the coming Mercedes-Benz GLK and Audi Q5 crossovers.

Jim Lentz, Toyota Motor Sales U.S.A. president, says a small Lexus SUV could be a response to the "urbanization" of Gen Y buyers and empty-nest boomers.

Toyota's advanced product strategy group is studying a demographic trend — people who are "sick of the suburbs, but who don't want to give up the utility of their SUV," he said. "A small luxury SUV might be the right product for that environment," Lentz said.

The new SUV will be smaller than the RX 350 and will be built on an all-wheel-drive version of the RAV4 platform. It will be priced around $30,000.

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