Lexus NX Supply to Remain Static; Dealers ‛Emotional’ Over LS Decline

A year after its launch, U.S. sales of the Lexus NX compact CUV remain strong, but supply of the vehicles likely will remain static.

“We’ll continue to push for more. Our dealers are certainly looking for more, (but) it’s going to continue to be a negotiation with (Toyota in Japan), because it’s so popular globally,” Jeff Bracken, senior vice president and general manager for Lexus in the U.S. tells WardsAuto in an interview.

Toyota builds the NX in Kyushu, Japan, for 89 markets and in 2015 could allot only about 40,000 units for export to the U.S.

U.S. sales of the NX for the year (24,386 units) are pacing toward 40,000, but the vehicle spiked in July, up 19.0% to 4,337 from year-ago’s 3,503.

U.S. customers are waiting about a month for their NX, Bracken says.

“So it’s not that bad. It’s just (a situation of) if we had more, we could sell more,” he says, noting overseas waiting lists are longer, up to six months.

The NX is doing better than most competitors in the U.S. compact luxury CUV segment, although Acura’s RDX is outpacing it, with 30,290 sales through July, up 17.0%.

As is the case with most of the industry, light trucks are driving Lexus’s growth this year. The sector is up 30.1% while Lexus car sales are nearly flat, up just 1.2%.

Bracken is buoyant but perplexed over the continued strength of the GX SUV. Momentum from a refresh and repositioning two years ago hasn’t abated and sales continue to climb, although to relatively low volume of 14,028 through July, up 14.7% from like-2014.

“I don’t know, I’m just really happy about it,” he says when asked what’s driving buyers to purchase a GX, the model with the lowest days’ supply of any Lexus sold in the U.S.

WardsAuto data shows the GX had a 31 days’ supply at the end of July, down from 48 in late June.

Meanwhile, Bracken isn’t too concerned about weak car sales, even if dealers may be.

After a potential 3-row RX, the brand’s aging flagship sedan, the LS is “the next topic (bothering) our dealers. (The) dealer council is most concerned about (the LS) because it’s really late in its lifecycle,” Bracken says. “We’re only selling 500-600 a month and they remember days when we were selling 1,200 a month. We’re pretty sure we’re losing volume to our competitors right now.”

The LS has been on sale without a major redesign since 2007. Newer competitors such as the Mercedes-Benz S-Class and luxury buyers opting for CUVs or smaller sport sedans have put the hurt on the Lexus 4-door and its segment.

“It’s an emotional issue for our dealers…It’s just we know what we could have with an all-new generation, so that’s the rub for (them) right now,” Bracken says.

Dealers shouldn’t have to wait long, as a next-generation of the LS is expected to be shown at this fall’s Tokyo auto show and go on sale next year as a ’17 model.

Bracken recently told Reuters the LS may not be Lexus’ only flagship going forward, without specifying what other model will join it.

WardsAuto reported two years ago Lexus’s LF-LC concept car was heading to production. Sports cars generally are regarded as flagships due to their halo effect – their ability to draw buyers into the showroom, even though they typically purchase a different model.

According to various reports, the LF-LC is expected to be badged LC when it arrives in U.S. showrooms in the next year or two, possibly offering more than 500 hp from V-8 or hybrid powertrains.

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