Lexus Says It's Sticking With Cars, Despite the Scorching SUV Market

Matt Posky
by Matt Posky

Ever since Ford announced its abandonment of traditional passenger cars that aren’t the Mustang, automakers have been very clear to specify whether or not they plan to do the same. The majority seem to feel as if cars have a place in the market. That said, very few manufacturers are increasing sedan output when crossovers and sport utilities are presently so lucrative. For example, Lexus owes the majority of its volume to higher-riding liftbacks, but recently made the promise to maintain a diverse production portfolio.

Accounting for roughly one third of its total volume, cars aren’t the brand’s biggest money maker anymore. But Toyota’s luxury arm believes ditching them now would be an imprudent strategy. Perhaps Lexus is keeping an eye on fuel prices, or maybe it just realizes it can’t play the game in the same manner as the already truck-focused Ford.

According to Lexus’ vice president of marketing, Cooper Ericksen, the official reason for staying with cars has everything to do with the customer. “The fact is there is and will continue to be a very important role for sedans,” Ericksen told The Detroit Bureau during a press event for the 2019 ES model in Nashville, Tennessee. “Half the buyers of SUVs also own a sedan.”

Presumably, this was an issue Ford also had to come to terms with. While a Ford shopper is probably more likely to own a pickup truck and an SUV, Lexus competes in the luxury (or entry luxury) segment where the odds of sedan ownership is quite a bit higher. Lexus’ cars also sell in more markets than the F-Series and at lower volumes, too. The brand can’t afford to paint itself into a corner or stray too far from Toyota’s lead.

However, that’s not to suggest things won’t change if crossovers and SUVs continue growing in popularity. If conventional cars become so niche that they’re entirely unprofitable, no manufacturer will bother building them. That’s not a dystopian future we’re looking forward to and, thankfully, not an idea we have to entertain too seriously at present — even as domestic brands continue planning scaled-back car lineups.

Lexus hopes to actively counter the consumer trend by aggressively marketing the seventh generation ES sedan before it hits dealers late this summer. There’ll be an internet campaign and national television spots leading up to the launch. Ericksen says the model will be priced aggressively to give it the strongest advantage possible, and estimates the sedan should account for roughly 15 percent of the brands’ total sales within the United States.

[Image: Toyota Motor Corp]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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2 of 17 comments
  • Vvk Vvk on Jun 07, 2018

    They are so breathtakingly ugly!

  • Bd2 Bd2 on Jun 08, 2018

    Remains to be seen if Toyota kills off the GS; there's a new Crown (series) so one possibility is transforming the next GS into a lower volume "4-door coupe" (basically a CLS, 5 Series GT and A7 competitor). However, none of the Lexus sedans sell particularly well in Japan, nor do they do so over in Europe, so it's basically the US and China markets. And here, sales volume of the LS and GS are way below what they once were for previous generations of those models.

  • Rando [h2]Coincidentally, the Rolls-Royce Cullinan is more than $41k as well -.-[/h2]
  • Ajla "Gee, wonder why car (as well as home) insurance rates are much higher in places like Florida..." Severe weather is on the list but even if a benevolent genie reverted the climate to circa 1724 I think FL would still have high cost. Our home insurance rates have increased 102% since 2021 and I don't think weather models account for that much of a change in that period. Florida's insurance assignment of benefit regulation meant that it had ~80% of the country's of the insurance lawsuits on ~12% of the nation's claims and litigated claims can be expensive to insurance companies. The state altered some regulations and is having some success on getting more companies back, even with the severe weather risks, through relatively bipartisan efforts. With car insurance just beyond the basic "Florida" stuff, the population increase of the past few years is overwhelming the roads. But, I think the biggest thing is we have very low mandated car insurance levels. Only $10K personal injury and $10K property damage. No injury liability needed. And 20% of the state has no insurance. So people that actually want insurance pay out the nose. Like I commented above my under/uninsured coverage alone is 2.5x my comprehensive & collision.
  • Juan Let's do an 1000 mile drive and see who gets there first.
  • Eliyahu CVT needed for MPG. Outback is indeed the legacy of, err, the Legacy.
  • Gayneu I can comment on these. My wife always thought the Minis were "cute" so I bought her a used 2005 (non-S, 5 speed) for one of her "special" birthdays. She loved it and I kinda did too. Somehow a hole developed in the transmission case and the fluid drained out, ruining the car (too expensive to fix). A local mechanic bought it for $800.We then bought a used 2015 S (6 speed) which we still have today (80k miles). Her sister just bought a used S as well (also manual). It has been a dependable car but BMW-priced maintenance and premium gas hurts for sure. I think the earlier generation (like in the article) were better looking with cleaner lines. The 2015 S rides too stiff for me (Chicago roads) but is a hoot on smooth ones. It does seem to shift weird - its hard to describe but it shifts differently from every other manual I have driven. No matter how hard I try, so won't let go of her Mini.