Lexus Plans More SUVs, Less Sedans
Lexus SUV Production Increased to Adjust Dealer Inventory and Meet Growing Consumer Demand
Americans love their SUV’s. That much is evident, whether you look at the latest automaker sales figures or just what’s around you in the parking lot. Lexus was caught a little off guard by this shift in consumer demand, however. And as Micheal O’Brien, chairman of the Lexus National Dealer Advisory Council told Automotive News, it took months to properly adjust dealer inventories. But now the balance of Lexus SUV to sedan is aligned for 2017.
To adjust to this shift in consumer preference, O’Brien says that Lexus both increased production of SUV’s and decreased production of sedans. This, coupled with incentives on slower moving models, helped balance things out over the last few months. O’Brien admits that dealers faced some inventory challenges through 2016.
“There was a concern, but it has gotten much better. We expect to finish the fourth quarter very strong and to start 2017 off with great SUV availability.”
Those adjustments mean that Lexus’ down year in 2016 should prove an outlier. After record sales and profit in 2015, exciting new models and abundant SUV inventory should right the ship. Especially considering the tremendous profit advantage that SUV’s hold over cars.
That, of course, doesn’t mean that dealers want Lexus to abandon cars altogether. As O’Brien admits, having a halo car like the LC 500 is extremely important. It drives customers into dealerships, even if they have no intention of buying a two door sports car. And it gives the automaker a more exciting, edgy reputation that trickles down to all models.
Including SUV’s. After all, it’s kind of hard to get all the kids in that low slung performance car, as much as we really want to.
