Lexus will not offer luxury vehicles under $30,000

Article by Christian A., on December 10, 2013

Lexus will not follow Mercedes-Benz’s lead in offering a unit that sells $30,000, according to Lexus Division general manager Jeff Bracken. He remarked that while Mercedes-Benz's CLA sedan is off to a good start with a $29,900 starting price, he reiterated that Lexus has no plans to follow suit.

"We have Toyota and Scion to handle that price level for us," said Bracken in an interview with Automotive News. Mercedes launched the CLA in September with a $29,900 starting price plus a $925 delivery charge, bringing the total price to $30,825.

The German carmaker has sold 10,828 CLAs since launch until November. “They are really doing well, and it has probably not only impacted their overall volume with CLA, but also brought in some traffic for some of the other series that they represent, and clearly helping drive the luxury segment in total," Bracken remarked.

As for Lexus, its lowest priced offering is the CT 200h hybrid at $32,960, followed by the redesigned IS sedan at $36,860. Both prices include shipping. On the other hand, BMW's lowest-priced vehicle is the 1 series, which starts at $32,425, including shipping. BMW sold 6,181 of the vehicle units through November. The CLA is seen as the major game-changer that would allow Mercedes to dethrone BMW as best-selling luxury carmaker in the United States this year.

Lexus held that crown for 11 years in a row until 2011. According to Bracken, he would love to get the crown back, but conceded "that will be difficult" as long as German carmakers offer low-priced small models. Bracken expects Lexus to log a 12-percent surge to more than 270,000 units for the full year. Mercedes and BMW are both seen to log sales exceeding 300,000 units.

According to Bob Carter, senior vice president of Toyota Motor Sales USA, Mercedes and BMW need small, high-mileage vehicles to meet stricter 2016 US Corporate Average Fuel Economy standards. While both German carmakers have small-vehicle brands to help on CAFE, their US volume is much smaller than that of their luxury counterparts. Lexus, however, does not to worry about that, since sister brands Toyota and Scion could help it on that matter. [source: automotive news - sub. required]

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