Why 2014 will be one of Lexus' most important years in the company's history
1989 was the first year that Americans could buy a Lexus. In 1998 Lexus again set a milestone in place with its amazing RX 300 which has become its leading seller in the premium crossover segment. In 2014 Lexus will break new ground again by adding a completely new compact crossover called the LF-NX to its line. This new car is hitting the market just as the US warms up to smaller, sporty, premium crossovers. Lexus will also begin selling the new RC 350 sports coupe targeted squarely at the BMW 428i. Finally, Lexus is teasing its fans mercilessly with a new sports car called simply “F” which we think is uprated version of the RC that may have as much as 450 horsepower.
2013 Was a pretty amazing year for Lexus. The new IS 350 and IS 250 have surpassed all expectations. Not only did the cars double the sales volume of that already existing model, but the IS 350 bested the BMW 3 Series in multiple matchups in leading automotive publications (including this one). The IS shares much of its platform, suspension and drivetrain components with the also successful GS 350. The GS is larger than the IS and it was pretty much dead in the water until a redesign lifted it out of the doldrums and made it a viable car for Lexus. Now the new RC 350, and likely the “F”, will share much of the GS/IS content. That means Lexus can share the cost and boost its profitability on all of these models, which sell in relatively low numbers compared to mainstream cars like Toyota’s Camry, but at literally twice the sticker price.
The 2014 LF-NX will be even more significant to Lexus. Lexus has for decades owned the top spot in the luxury crossover market with the RX 350 and its hybrid sibling. However, by size, that market is smaller than the compact luxury crossover segment will soon be. The new LF-NX will compete with BMW’s X3 (not the obscure X1 as many publications mistakenly state). Lexus will likely price the new LF-NX close to the RX 350 and start to bump the RX up in size, price, and content to make space between the models. The smaller LF-NX will have the Toyota RAV 4 and Lexus RX models from which to source unseen components and should prove extremely profitable for Lexus. More importantly, the LF-NX will be the first year of a 2.0 liter turbo at Lexus. This engine will soon migrate to other models throughout the Toyota family.
For many years critics of Lexus have pegged the company as too conservative and boring. As they were making those claims Lexus was one of the top selling luxury brands in the United States, and probably the most profitable. The critics are now dumbfounded by the underdog IS 350’s wins in comparison testing against the BMW 3 Series, which is clearly the more conservatively styled car. That the Lexus can beat BMW and still have a significant price advantage makes the wins all the more sweet for Lexus. Now Lexus is about to introduce the most radically styled premium compact crossover in the world and will follow that with a serious sports car. Look for 2014 to be the year the critics start to board the Lexus bandwagon.