New 3.5L Engine Boosts Lexus GS Demand

DEARBORN – When it launched the Lexus GS in February 2005, Toyota Motor Sales U.S.A. Inc. boldly aimed to quadruple sales of the midsize luxury sedan to 33,000 units.

But after a good start last year, when 33,457 GS 300 (27,807) and GS 430 (5,650) models were sold, demand for the GS 300 has fallen 12.5% this year to 15,734 units, and deliveries of the V-8-powered GS 430 and 450h V-6 hybrid-electric vehicle have plunged a hefty 30.7% to 2,805, according to Ward’s data.

Combined, the numbers put the GS series a distant fifth in the Ward’s Middle Luxury segment, led this year by the Cadillac DTS, with sales of 38,735 units. The BMW 5-Series is a close second, with 35,754 units.

To get the GS back on track, Lexus is offering the base model with a larger 3.5L V-6 for the ’07 model year. The new engine churns out 303 hp, a marked increase from the 3L’s 280 hp.

“The 3.5L, at the time we launched the GS, frankly wasn’t ready to come to market yet,” Bob Carter, group vice president and Lexus general manager, tells Ward’s in explaining why the bigger V-6 wasn’t offered in the GS from the start.

The lack of a more powerful mill for the base GS model pushed many Lexus buyers toward the IS 350 sedan, says Carter, on hand here for the media rollout of the new LS flagship.

The IS has been a hot-seller for Lexus, with 2006 sales on track to exceed expectations. Lexus has delivered 10,623 IS 350s and 26,724 IS 250s in the U.S. through August.

Lexus GS sales down this year in the U.S.

“The IS 350 offered so much performance that the real true performance enthusiasts gravitated toward the IS and not necessarily the GS 300,” he admits.

However, Lexus dealers are telling Carter the situation is changing now that the GS 350 is available.

“Dealers are already saying the person looking for performance is going to the GS,” Carter says.

Of the GS 450h, which Lexus has sold a modest 1,015 units of this year, Carter says the “complexity of production” is holding down sales volumes. He says Lexus dealers are sold out of the HEV at the moment.

Instead of buyers gravitating toward the hybrid for ecological reasons, “it’s really being viewed at as an alternative to a V-8,” Carter adds.

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