Firm believes the popularity of SUVs shows people are prepared to pay premium prices for smaller cars
Jim Holder
23 October 2019

Lexus could expand its line-up and make smaller cars in the future because of market changes sparked by the growing popularity of SUVs.

Speaking at the Tokyo motor show, the firm’s executive vice-president, Koji Saro, said there was evidence that well-executed smaller cars could be sold for higher prices, because of shifts in how customers perceive value. In particular, SUVs are more profitable than same-sized hatchbacks because they are perceived to be bigger due to their raised ride height.

“Smaller doesn’t always mean cheaper now, so trends are changing,” said Sato. “I can’t say clearly that it is something we will do, but we are looking at all vehicle opportunities.”

Such an SUV would sit below the recently launched Lexus UX crossover, with a likely starting price well below £30,000. However, Sato hinted that part of the appeal of creating smaller cars was that buyers are increasingly willing to raise the transaction price by buying options. “What customers want is individuality,” he said.

Sato also vowed that Lexus would keep making distinctive cars, including convertibles and F-branded models powered by high-performance, non-electrified engines. “We must cater for people who enjoy their driving,” he said.

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Our Verdict

Lexus UX 2018 road test review - hero front

More car-like than most, with quirky styling and a hybrid powertrain that sets it apart from rivals such as the Volvo XC40

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23 October 2019

"Koji Saro, said there was evidence that well-executed smaller cars could be sold for higher prices, because of shifts in how customers perceive value...", what that actually means is that people are getting used to greedy manufacturers' frequent, extortionate price hikes, usually hidden behind finance deals for those not up to speed on car-related matters, so paying £20k for a mid-spec Corsa is becoming the norm.

So no doubt Lexus will now do what VW does - i.e. whack a Lexus grill and badge on a Toyota Yaris and charge an extra £5-10k for it. No doubt they'll be loads of people out there that will buy them, and look down their noses at people in an almost identical Yaris!

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