Lexus GX Sales Double, Profits Pile Up

Derek Kreindler
by Derek Kreindler
lexus gx sales double profits pile up

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.

Join the conversation
2 of 42 comments
  • Chiefmonkey Honda just cuts too many corners. There's no reason why the base Accord should have a 4 speaker stereo lol. It's a $28,000 midsize sedan, not a Mitsubishi Mirage! Not to diss the Mirage it's a great car for what it is. And what's up with Honda's obsession with the dullest most spartan looking black cloth or leather interiors? Literally every other automaker I can think of offers two, three, four possibilities. If I order even the top trim accord in the blue paint, I am limited to a black interior...why???? Strangely, if I order the white paint, the possibilities expand overwhelmingly to two: black, or dentist's office gray (which clashes with white.) There's zero rhyme or reason to it. Just a cheap, corner cutting company.
  • Dartman It was all a scam just to gin up some free publicity. It worked. Tassos go back to sleep; no ones on your lawn. Real ‘murricans prefer hot dogs to gyros.
  • ToolGuy I plan to install a sink in the crawl space soon. After that I plan to put washer and dryer hookups on my roof.
  • ToolGuy "That power team adds an electric supercharger"YES!
  • Cardave5150 UAW is acting all butt-hurt that their employers didn't "share the wealth" when they had massive profits. They conveniently forget that they have a CONTRACT with their employers, which was negotiated in good faith, and which the Remaining 3 are honoring, paying them exactly what they negotiated last time.