PARK CITY, UT – August is shaping up to be the best month ever in Lexus’ 12-year history, Denny Clements, group vice president and general manager for Toyota Motor Corp.’s luxury division, says at a press event here.

With inventory at a 19-days supply, Clements’ biggest fear, he says, is running out of product. But this record pace may taper off.

Clements says he believes the end of no-interest incentives by the Big Three may slow auto sales overall in the fourth quarter.

He notes that the size of the falloff may appear exaggerated because comparisons will be made to last year’s fourth-quarter numbers "when the SAAR (seasonally adjusted annual rate) was running at something over 18 million."

Lexus ES 300

Lexus sales are strong, up 7.1% year-to-date through July at 135,847 units, but the luxury maker is not on track to finish the year ahead of all its competitors. The company last year nabbed the sales crown from long-time luxury leader Mercedes-Benz. This year, however, BMW AG is in the lead, with sales of 146,430, up 15.9% over year-prior.

But the auto maker undoubtedly is growing in prominence in the North American market. Lexus next year will begin production of the RX 300 cross/utility vehicle at its plant in Cambridge, Ont., Canada.

The production shift may represent a ceding of power to Lexus in North America, which could usher in a host of changes in the product lineup.

"All-wheel drive will be the price of admission for any luxury car maker" in the future, Clements says.

He theorizes that all future Lexus models could come with "AWD options and a number of engine choices," not excluding diesel, noting Toyota currently makes a diesel engine for BMW. AWD capabilities will be developed as new platforms come on stream. And such platforms may support more variations.

Clements sees the next IS platform (which currently is the base for the IS 300 sport-compact in the U.S. market) as offering more than just one model, and perhaps coming as "something like an IS200 or IS240 as well as an IS300," not unlike BMW’s variety in its 3-Series models.

And Clements likes the idea of a Lexus supercar, along the lines of the Maybach or Cadillac Cien concept. "That idea was proposed in the past and the product planners wouldn’t consider it," he says. "Now, they want to take a closer look at it.

"You probably could never make a solid business case for it. It’s more of an image thing."