By on July 28, 2014

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The Lexus GX seems to truck along in the American marketplace with little fanfare. Aside from a brief rollover scare, the GX’s most notable achievement appears to be as the ride of choice for family members of Lexus dealer principals and Central Asian warlords. But Ward’s Auto reports that a bit of magic by Lexus product planners has helped double sales in just over a year.

According to Ward’s

Adding a lower-priced base grade for the GX’s ’14 refresh, by substituting fake leather for real leather and deleting some content, was key to this year’s sales jump, putting the SUV’s starting price on par with 3-row midsize CUVs.

Keep in mind that this is an SUV that starts at a hair under $50,000 – and only 20 percent of buyers are even opting for the base model. Most customers go for the $53,795 GX Premium, which ostensibly offers real leather and other stuff that one would expect on a pricey SUV.

Brian Smith, VP of Marketing for Lexus, told Ward’s that

“I think there’s a need for towing capability, without having to go all the way to a (fullsize) LX…So we’re doing everything we can to continue to keep Toyota focused on the need for GX.”

Sure, there is a need for towing capacity with these vehicles, but there’s another, unspoken reason why Lexus keeps the GX around: profit. The GX is based on the Toyota Land Cruiser Prado, a body-on-frame SUV related to the Toyota 4Runner, and sold in world markets as a family vehicle.

Taking an inexpensive vehicle that has had most of its costs amortized already (and is relatively simple to design, engineer and manufacture) and marketing it as a luxury item is a tried-and-true recipe for enormous gross margins that other players like GM, Ford and Nissan have all been exploiting for years now. It even works on unibody designs too (think Honda Pilot/Acura MDX or even Toyota Camry/Lexus RX). The body-on-frame design used by the GX just happens to be very simple technology that doesn’t cost a whole lot. When it’s sold as a silk purse, it becomes a very, very lucrative sow’s ear.

No wonder Smith speaks of his desire to “keep Toyota focused on the need for GX”. The SUV might as well be a printing press for the Lexus division, not just in America, but also in markets like China and Russia, where Lexus can charge whatever they please. And doubling sales of a product like this sure doesn’t hurt either.

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42 Comments on “Lexus GX Sales Double, Profits Pile Up...”


  • avatar
    PrincipalDan

    Well, duh. As Derek said, it is stealing a page from other automakers playbooks. I was surveying the parking lot this morning and thinking of how many GMC/Chevrolet Yukon/Tahoe, Sierra/Silverados there were in the parking lot, all sharing common components.

    It is a licence to print money.

    • 0 avatar
      NormSV650

      Moving from +2500 to +5,000 is doubling sales but necessary the cash cow.

      Watch the Yukon Denali, that is similarly priced new or with the same residual after a decade or 200,000 miles, sell 3x as many GX’s. The Denali others and additional passengers seat, makes more power and gets better fuel economy with the base 5.3l engine. Or go with the 6.2l and almost add 100hp/100torque on the Lexus.

  • avatar
    Rday

    a friend has one. We went out with our wives and I could hardly get my feet in. Now I have big feet but the ergonomics of getting in made the whole thing ridiculous. Definitely wouldn’t be a buyer of one of these.

    • 0 avatar
      PrincipalDan

      Increasingly the BOF is the towing off road choice while the unit-body is the passenger carrying choice. Highlander vs 4Runner, Traverse vs Tahoe, etc. (And yes I know CUVs often have tow ratings but I know if I had to tow a camper for vacation I know which I’d choose.)

      • 0 avatar
        bball40dtw

        I find the new Expedition to be the most comfy of the BoF SUVs. I haven’t been in a 2015 Navi, but i can only assume its at least comfortable as the Expedition.

        • 0 avatar
          PrincipalDan

          Why isn’t there a Lexus version of the Highlander? I would think that would be a cash cow no brainer for anyone looking to trade up from an RX. Take the Highlander Limited and make the fake wood real or something like that and increase the quality of the leather.

          • 0 avatar
            racer-esq.

            The RX is the Lexus version of the Highlander.

            Toyota is milking all of the cash cow no brainers.

          • 0 avatar
            bball40dtw

            Maybe they figure it isn’t worth it when they are selling a bunch of GXs. I would think it would sell though. Like you said, it would be much better for passengers than the GX. If Lincoln can find room for the Navigator and MkT, Lexus can have a GX and HighlanderX. Plus the have the LX too.

          • 0 avatar
            PrincipalDan

            @racer-esq, sorry the lack of headroom and third row, and cargo space in the RX makes it easy to forget that there is platform commonality.

          • 0 avatar
            bball40dtw

            The RX doesn’t have a third row. It may share a platform, but its like the Edge and Explorer (at least once they are both on the same platform).

          • 0 avatar
            bd2

            The RX shares the same platform but for the sake of “style” sacrifices rear cargo room, but the next gen RX is reported to have a more traditional roofline in order to increase interior/cargo room.

  • avatar
    Dan

    Doubling near non-existent sales doesn’t amount to much. Toyota has moved just 10,000 of these this year through June.

    In a world where even Nissan and Hyundai want $40,000 for their three row fridges a $53,000 GX isn’t nearly as upmarket as its reputation. Getting $15,000 for what amounts to a 4Runner interior package is better than not getting it but at those volumes a Tahoe it ain’t.

    • 0 avatar
      kmoney

      Would agree with this and the previous poster. We looked at one of these before buying an LX570 and the ergonomics are pretty bad. They also have a weird thing going on where they have just placed leather and wood over the almost toy like (huge plastic buttons, giant door pulls, weird square steering wheel) of the 4runner. It’s always been a bit of an oddball, but now it seems to deviate, at least in the interior, from all of the other Lexus design language.

    • 0 avatar
      28-Cars-Later

      “In a world where even Nissan and Hyundai want $40,000 for their three row fridges a $53,000 GX isn’t nearly as upmarket as its reputation.”

      Lexus in general runs rings around both of them in terms of exclusivity and branding, not to mention the fact its a real SUV vs the not so real SUVs in which you refer.

  • avatar
    GiddyHitch

    I see a ton of these around the valley and can only conclude that someone got confused when they went to their Lexus dealer to purchase an RX. The proportions are so tall and narrow in an old school 90s SUV way as to almost be charming until you look at the price tag. At least they got rid of the side hinge rear door that effectively blocked you off when curb parked in LHD countries.

  • avatar
    cargogh

    I’m not sure if the effect is still there after a decade, but getting behind an old always gave me the impression that a mid-size SUV was being hauled in the back of a full sized pickup. Interior volume must be tiny compared to exterior dimensions.

  • avatar
    Pch101

    I’m sure that the margins are impressive, but the profits are only modest in absolute terms, as the volumes are low.

    The money printing machine is the Lexus RX. High prices attached to a high-volume platform that serves as the basis for many vehicles.

  • avatar
    doktorno

    Vehicle in the photo above is a GX470, a.k.a.the 120 Land Cruiser Prado, last sold in the US in 2009 I believe. It is pretty tight in the second row, but I like them. The GX460, the 150 Prado, is the newer model and is roomier on the inside, and includes fold flat third row seats. The second row seats will slide forward and aft, and the vehicle has similar room to my wife’s 2006 Land Cruiser, the 100 series.

    I own a 2013 GX460, purchased before the Predator front grill refresh. Tows our Lemons car like a champ with the self leveling rear suspension, and handles kid duties well. It is an appliance, but a great appliance.

  • avatar
    APaGttH

    But the new one is sooooooo….ugly.

  • avatar

    Forget that gussied-up Toyota…what auction in the picture ran that fifties dream boat??

    Seriously, though, can’t touch these with a stick. One with absurdly high miles plow through Manheim Central every Wednesday on their way to Uganda, Costa Rica, or wherever they end up and bring ALL the money doing so.

  • avatar
    NoGoYo

    How much does a current Land Cruiser cost, again?

    This thing comes in at $50k to start and is below a Land Cruiser in the hierarchy, right? So a Land Cruiser must be like $70k for the most basic one…

    • 0 avatar
      bball40dtw

      $80K. Haha.

      • 0 avatar
        NoGoYo

        70 or 80k was what I was thinking, yeah.

        God damn, an $80k Toyota. At least an Escalade is a Cadillac and not a Chevrolet.

        Also explains why I don’t even know what a new Land Cruiser looks like, I don’t live in Yuppieville where people actually buy the things.

        • 0 avatar
          bball40dtw

          Don’t underestimate Chevy’s ability to get $$$$ for the Suburban. Granted, it starts in the mid $40s, but a Suburban LTZ can get into the $70s.

        • 0 avatar
          bd2

          Much have an LC (well, before Toyota messed up the design) than the gussied up Lexus version (and that’s even before “Predator-face” had made its way to Lexus).

          • 0 avatar
            raresleeper

            I’d much rather have the Land Cruiser over that @*#! (excuse me, I just vomited profusely) Lexus.

            Then again, I’d rather have a Yukon over an Escalade.

            I don’t like wearing velour track suits and gold rope chains, either. Guess I’m weird like that.

        • 0 avatar
          mikeg216

          Last time I checked Toyota sold less than a thousand land cruisers per year, they’ll order you one… Maybe.

  • avatar
    DrGastro997

    You can’t go wrong with the GX/4Runner/Prado/Hi Lux. Hino puts them together mostly and they do it very well. The reliability of these body on frame “trucks” can’t be beat. But they’re everywhere you go in the world and it’s become nothing really special. Regardless, considering performance, cost of ownership, and quality, it’s worth a buy. The Land Cruiser/LX would be my choice but it’s a big jump in price.

    • 0 avatar
      NormSV650

      Can’t be beat? A quick search on yahooautos show GMC Yukon in similar years as the GX/4Runner with almost 100,000 more miles.

      You can’t beat domestic trucjsbfir the lowest operating costs.

  • avatar
    Mandalorian

    I almost bought one of these. I really loved everything about the car, but it had one fatal flaw. That stupid aide swinging tailgate. What a piece of trash. How hard it is to slap on a liftgate?

  • avatar
    VenomV12

    My neighborhood and area are inexplicably littered with these ugly things as well as the less ugly, but still ugly LX. After years of seeing them, I can say with 100% certainty that I have seen exactly zero of them every tow anything. For some reason cardiologists think they need vehicles capable of super off-road duty to make that 5-10 min drive to the office or hospital in 6 inches of snow. The chance someone with a Tahoe or Suburban actually tows something is like 70%, a Lexus, nil. If you are buying an SUV for fashion and prestige I have no idea why you would buy anything other than a Range Rover to be honest?

    Where they make their money is the RX, those damn things are everywhere, and they are really going to rake it in with the NX.

    • 0 avatar
      turboprius

      My AP Human Geography teacher from freshman year has a Suburban 2500. With that quadrasteer 4WD, it did well in the ice storm that shut down Georgia. Otherwise, I don’t really see a point in a vehicle like that, especially in the land where we buy RWD body-on-frame SUVs and trucks. She likes it, and that’s all that matters.

      Ditto on the RX, but not sure about the NX. The Encore and vehicles like it haven’t really taken off (not from what I can see, but remember, the A3 is apparently selling, and I’ve only seen one. TurobPrius sales figures aren’t the most trustworthy). In the wealthy part of town, the MDX and the GX run the world. More so than Beyonce.

      My neighbor just bought a used 2010 RX after her 2013 Explorer was somewhat totaled. People like them. Don’t know why, but they do.

      • 0 avatar
        VenomV12

        I love the RX, probably would not buy one because it is considered a chick car, but dammit if it is not nice and super comfortable inside and for a relatively decent price. I know many people that own two of them. In fact I have one neighbor that owns 3 RXs currently and they also have a GX. Both are physicians and both have offices like 10 feet from the house, and the hospital is about 5 mins away so of course the need for these vehicles is dire. lol

    • 0 avatar
      S2k Chris

      “If you are buying an SUV for fashion and prestige I have no idea why you would buy anything other than a Range Rover to be honest?”

      You want it to run and start every day? You want it to last more than 25k miles? You want to own it for 10 years?

      I won’t argue the market is large for these things, but you have to admit there is appeal in a REAL SUV with a REAL 4WD system and a luxurious interior and a bit of prestige, and the added reliability/dependability of Toyota. I mean, if you have an RX and want a 3rd row, why buy anything else?

      And if every other betch on the block drives an RX, what do you get your husband to lease for you to one-up them?

  • avatar
    Richard Chen

    Sales bump must be due to these GX threads:

    http://www.thetruthaboutcars.com/2012/11/new-or-used-the-trophy-suv-for-the-trophy-wife-edition/

    http://www.thetruthaboutcars.com/2014/06/new-or-used-try-to-hit-em-where-they-aint/

  • avatar
    suspekt

    2 questions.

    1. Is the Mercedes GL class body on frame?
    2. What is the towing capability of the GL?


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