Lexus Targets German Brands With New RX F Sport

PORTLAND, OR – Lexus believes the latest generation RX CUV, paired with a strengthened F Sport package, may be the ticket to lure owners of German midsize-luxury CUVs into its showrooms.

Pre-launch research commissioned by Lexus shows the new fourth-generation RX has a better opportunity than its predecessors to divert sales from competing German models, driven primarily by the CUV’s performance variant.

“We did see a few more owners of German competitors say, ‘With the F Sport on the new body, I would give it a second look,’” Brian Bolain, vice president-marketing for Lexus in the U.S., tells media here at a ’16 RX preview.

With the ’16 RX, on sale in the U.S. in November, the brand continues its march toward more aggressive sheet metal and driving characteristics.

“We need to be known as something more than just the brand that brought reliability to luxury,” Bolain says.

Helping increase the RX’s performance cred is the renewed F Sport trim. It has been strictly an appearance package, but with the ’16 there are performance enhancements as well. An adaptive variable suspension with both front and rear actuators and a Sport+ drive mode now come packaged with heavily bolstered seats and flashier interior trim.

“F Sport has historically been around 10% (of total sales) on the outgoing RX, but we think the opportunity is bigger – I think around 20% is more likely,” Bolain says of how the mix may shift for the fourth-gen model.

However, Lexus still has ordered 10% of initial ’16 RXs built at its Cambridge, ON, Canada, plant as F Sport grades, as brand managers want to see how the market will react.

New for ’16 and expanding the F Sport’s reach is the pairing of the trim level not only with the standard-powertrain RX 350, but also the RX 450h hybrid.

Appearance items unique to the more potent RX F Sport include a mesh grille, red-leather seats and laser-etched sapele wood with aluminum trim.

Despite a belief it can capture some sales from the Germans, Lexus doesn’t see RX annual volume or share increasing beyond current levels.

The Toyota luxury brand essentially has owned the midsize-luxury CUV segment in the U.S. since it introduced the RX in 1998 as a ’99 model. The car-based utility vehicle still is the best-seller in its segment – and along with BMW’s 3-Series it is one of two luxury models regularly selling more than 100,000 units annually in the U.S. But where it once was one of just a few players the RX now is one of many, as the number of midsize luxury CUVs has exploded in recent years.

The RX comprises 15.8% of the Middle Luxury CUV segment today, vs. roughly 20% a year ago and about 30% in its earliest years.

“We typically sell around 100,000 a year, and we’re going to plan to sell around 100,000 a year,” Bolain says. “The share number we have is already pretty strong, and since we just introduced the NX…we want to be realistic about expectations.”

The compact NX CUV, launched in 2014, has been drawing buyers away from the RX this year, Lexus U.S. Group Vice President Jeff Bracken told WardsAuto last month.

“Early when NX launched, there was almost no cannibalization. Today we’re seeing some,” Bracken said at a Northern Michigan auto conference. He also blamed lost RX sales on the current generation’s advanced age of 6-½ years.

Bracken estimated RX’s 2015 tally would come in a bit below 100,000, at 98,000. The CUV’s volume through August fell 9.6% to 62,163. Still, sales were double those of the Mercedes M-Class and Audi Q5 in the same period and far exceeded most of the segment’s players.

Cadillac’s SRX was the No.2 seller through August in WardAuto’s Middle Luxury CUV group, with 43,863 units delivered, up 15.4%. The BMW X5 was No.3 with 37,965 sales, up 32.6%.

The Acura MDX, considered a key non-German competitor, but segmented by WardsAuto as a Large Luxury CUV due to its additional length and third row, posted 39,144 deliveries through August, down 9.9% from like-2014.

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