Lexus Targets 36,000 Sales With NX

WHISTLER, British Columbia – Lexus expects to sell 36,000 units of the new NX in the vehicle’s first year on the market in the U.S., and primarily sees buyers of the CUV coming from outside the brand.

The NX is on a “mission of attracting new consumers to Lexus,” Brian Smith, vice president-marketing for Lexus in the U.S., says here at a media preview for the model.

Lexus sees more than half of NX buyers being non-Lexus owners, with the possibility of more than 70% of early customers being new to the brand, a high percentage reached by last year’s launch of the IS sedan.

Years ago Lexus executives expressed concern about potentially cannibalizing the RX lineup with a smaller CUV, but Smith says that concern has faded, as NX and RX buyers probably are at different life stages.

“There will be people who've owned RXs and want to try something new, but the vast majority (of RX buyers) are buying it for different reasons,” he says. “They want the utility (of a larger CUV and) they probably have kids, so we think NX is going to appeal to a different buyer (and the) potential cannibalization is going to be quite low."

The midsize RX is Lexus’ perennial best-seller in the U.S., moving more than 100,000 units annually.

But in the still burgeoning small-luxury CUV segment, volumes are smaller. The Mercedes GLK was the best seller in the segment in 2013 with 32,553 units sold, WardsAuto data shows.

The Toyota premium marque expects an even split of males and females buying the NX in the U.S., slightly more single than married buyers, and half of buyers coming out of non-luxury vehicles.

Annual household income of NX buyers is pegged at $130,000.

The NX is launching in 80 countries this year, with different levels of standard and available features varying by market.

While some markets are getting three engine choices, including a naturally aspirated 2.0L gasoline mill, in the U.S. the NX will come with either a 235-hp 2.0L turbocharged 4-cyl. gasoline engine or a 2.5L 4-cyl. gasoline engine, part of a hybrid system making 194 total horsepower.

The turbo mill can be paired with Lexus’ F Sport dress, which not only adds distinctive badging and interior elements to the NX, such as red leather seating, but also a suspension tuned for  sportier ride and handling.

Both turbo and hybrid powertrains can be had in front- or all-wheel-drive configurations, with NX turbo models projected to achieve 24 mpg (9.8 L/100 km) combined in either layout. FWD NX hybrids should do slightly better than AWD models, with 33 mpg (7.1 L/100 km) average projected vs. 32 mpg (7.4 L/100 km).

Smith sees a take rate of well under 10% in the U.S. for the hybrid model, noting U.S. hybrid sales have slowed as car buyers largely become more accepting of higher fuel prices.

The NX is roughly the size of Audi’s Q5 which, along with BMW’s X3, were the two models benchmarked by chief engineer Takeaki Kato during development. The NX is loosely based on the Toyota RAV4, Kato says, with 90% of the chassis and body new or revised.

While the Germans are pursuing ever-smaller CUVs, with BMW’s X1 now on sale in the U.S., and Audi’s Q3 and Mercedes-Benz’s GLA due later this year, Smith says Lexus at the moment isn’t interested in a model below the NX.

“I think (the) NX will attract a number of people who would consider smaller (CUVs) as well as larger (models),” he says, noting a smaller CUV from Lexus likely would overlap the NX on price due to features necessary to attract premium buyers.

“They don’t seem to be targeting the $20,000 range with their products,” he says of the Germans, noting their littlest CUVS are “small but very premium.”

The NX goes on sale late this year in the U.S, with pricing to be determined closer to launch.

Competing models start in the upper-$30,000 range, with the X3 beginning at $38,400 for ’14 and the Q5 starting at $37,300.

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