Lexus to challenge Q3 soon

Lexus admits it needs a compact luxury vehicle to compete with the Audi Q3 and BMW X1

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When Lexus decided to broaden its product range early in the new millennium, it considered two options - a compact hatch or a compact crossover.

The prestige Japanese carmaker went with the hatch, which was subsequently released as the CT200h, but the company is now turning its attention towards the booming compact SUV sector, in which it would target small luxury crossovers like BMW’s X1 and Audi’s new Q3.

During this week’s national media launch of the new GS450h hybrid, Lexus Australia chief executive Tony Cramb reiterated the need for a compact SUV in the Lexus line-up.

"I think for Lexus to offer a complete range at some point in the future we'll have to develop a car of that nature, yes. I've got no idea what sort of platform ... but we'll definitely have to have a car of that type," he said.

"The market's growing. There's clearly people that demand in the luxury market a car of that [compact SUV] nature and definitely there's an opportunity there for us," added Mr Cramb.

Lexus’ most affordable SUV is the five-seat RX mid-sizer, but the entry-level version won’t leave you much change from $90,000, whereas a compact model would draw more first-time buyers to the brand with a sticker price of between $40,000 and $50,000.

Lexus top brass has recently reorganised its product development process, investing heavily in a new vehicle approval system that can essentially fast-track vehicles for production. This bodes well for the timely arrival of a compact SUV bearing Lexus badges, as Toyota’s premium brand continues to lose market share to the likes of BMW and Audi.

“In Lexus there's now a completely different product approval process, so whereas they used to go through literally hundreds of reviews and many, many layers of management review, Akia Toyoda and the Lexus group have cut away a lot of the Toyota beaurcaracy and have carved out funding for just Lexus development and Lexus products,” said Mr Cramb.

The local Lexus chief said there is room in the Lexus range for a compact soft-roader as well as a larger seven-seat SUV positioned between the RX and LandCruiser-based LX flagship, but that it is unlikely to be the Toyota Prado-based GX that is sold in the USA.

"There's definitely room in the line-up for a seven-seat vehicle that's not quite as big as the LX, so there's probably room between an RX and an LX."

The next SUV model action we'll see from Lexus will be a facelifted and expanded RX range due here later this year. As with the GS450h released this week, the RX will for the first time become available in F Sport guise.

“The run, drive, stop and turn - they're all impacted with sporting features [in the RX F Sport] in the same way we've done with IS350 and the same way we've done with GS and the same with CT."

While power outputs for the RX350 and RX450h F Sport models won't change, both new variants will benefit from a modified chassis and an aggressive new look.

"It's the same power [but] chassis, suspension, dynamic, and body appearance are new," said Mr Cramb.

Lexus Australia is also expected to introduce F Sport versions as part of its facelifted IS sedan/convertible and LS limousine models around October this year, before a redesigned IS sedan emerges as the next all-new Lexus model next year.

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