Lexus looking to expand line-up with smaller models

Lexus could expand its line-up and make smaller cars in the future because of market changes sparked by the growing popularity of SUVs.

Speaking at the Tokyo motor show, the firm’s executive vice-president, Koji Sato, said there was evidence that well-executed smaller cars could be sold for higher prices, because of shifts in how customers perceive value. In particular, SUVs are more profitable than same-sized hatchbacks because they are perceived to be bigger due to their raised ride height.

“Smaller doesn’t always mean cheaper now, so trends are changing,” said Sato. “I can’t say clearly that it is something we will do, but we are looking at all vehicle opportunities.”

Such an SUV would sit below the recently launched Lexus UX crossover, with a likely starting price well below £30,000 (about Rs 27.31 lakh). However, Sato hinted that part of the appeal of creating smaller cars was that buyers are increasingly willing to raise the transaction price by buying options. “What customers want is individuality,” he said.

Sato also vowed that Lexus would keep making distinctive cars, including convertibles and F-branded models powered by high-performance, non-electrified engines. “We must cater for people who enjoy their driving,” he said.

Earlier this year, the firm confirmed that its first all-electric vehicle will be an urban hatchback. More recently, the carmaker launched the RX 450hL SUV in India at Rs 99 lakh, which costs Rs 30 lakh less than the outgoing RX 450h and comes with an extra row of seats.