Lexus GX Likely to Stay Truck-Based

PHOENIX – Although many auto makers are abandoning their truck-based SUVs for more car-like cross/utility vehicles, especially in the market’s mid range, the next-generation Lexus GX likely will retain its body-on-frame construction, a company executive says.

“(The GX) most likely will remain body-on-frame, but it’s not a final decision,” Bob Carter, group vice president and general manager for Toyota Motor Sales U.S.A. Inc.’s Lexus unit tells Ward’s during a recent event here.

Carter says there always will be a market for body-on-frame SUVs, despite the recent trend toward car-based utility vehicles such as the Audi Q7 and Hyundai Veracruz, because some customers will continue to want vehicles that can tow a boat or trailer.

Sales of the Lexus GX are down 9.9% for the first two months of 2007, a performance that betters the Ward’s Luxury Middle SUV segment overall, where demand is off 22.0% from year-ago.

The next generation of Lexus’ largest SUV, the LX, will debut at the New York auto show in early April. Lexus has released scant details on the vehicle ahead of the premiere, but says it will be powered by the same 5.7L V-8 available in Toyota’s new Tundra fullsize pickup truck.

“I think the (light-truck) segment will continue to trend towards unibody, because it offers a lot of what customers are looking for today,” Carter says. “(A unibody platform) provides more flexibility. But certainly there’s that customer (who is) looking primarily for towing capacity that a unibody (utility vehicle) can’t deliver quite as efficiently.”

Nissan Motor Co. Ltd. product planners told Ward’s last year towing was a consideration in deciding to retain traditional body-on-frame SUVs in its lineup. But the latest reports indicate the auto maker will shift some of its truck-based SUVs to unibody underpinnings.

Sales of GX down 9.9% for first two months of 2007.

A recent study by Kelley Blue Book Marketing Research’s Brand Watch found customers of luxury SUVs consider comfort and performance to be the two top reasons for purchase, vs. non-luxury SUV buyers, who prioritize fuel efficiency and reliability/durability.

The desire to keep truck-based SUVs in its stable is not a signal the auto maker is failing to recognize the trend to more CUVs, Carter emphasizes, pointing out the success the marque has had in the CUV segment with the midsize RX.

Ward’s forecast data shows a new large, Lexus all-wheel-drive CUV, dubbed JX, will arrive in the ’08 model year.

Lexus has trademarked the name JX 470 but, despite rumors of its existence, Carter declines to say if the auto maker has such a vehicle in the works.

He also won’t confirm talk of a Mercedes R-Class fighter in development, but says there are no plans in the “short-term” for such a vehicle.

“To go to a luxury minivan is nothing we see that necessarily fits the brand right now. We feel we’re in a pretty good position,” Carter says, adding he doesn’t see the R-Class as a minivan and that a new classification is needed for vehicles that blend the attributes of SUVs, vans and station wagons.

“The sub-segments of the industry are getting very clouded,” Carter says.

Another rumored new vehicle from Lexus, a small CUV to compete with BMW’s X3 and Acura’s RDX, likely would be better suited to Europe, he says, a point supported by Toyota Motor Europe President Takashi Arashima, who recently told Ward’s the best opportunities for Lexus to expand in Europe are in the small premium segments.

“The X3 and RDX don’t seem to be lighting up the market right now in North America,” Carter says of their sales, adding Lexus wouldn’t want a vehicle that would steal sales away from its RX models.

Ward’s data shows X3 sales were up 27.4% in February to 2,015 units. American Honda Motor Co. Inc. sold 2,034 RDX vehicles last month, up from January levels but far off the rate necessary to achieve first-year sales of 40,000 units the auto maker predicted when the vehicle went on sale last year.

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