Lexus ES Production Moved, Sub-RX Crossover Possible

Lexus ES Production Moved, Sub-RX Crossover Possible

There’s likely more to Lexus’ plan to shift production of the ES sedan to Kentucky than saving money — a major new model is likely on the way from Japan.

Lexus’ officially confirmed its plan today to move production to Georgetown, Ky. — likely due to the $146.5 million in tax breaks the state offered. But there could be something much bigger moving beneath the water. According to The Detroit Bureau, the brand’s choice to send the ES to U.S. production is also to make room at the Kyushu plant for a major new model likely to be a compact crossover slotted below the RX.

That would especially make sense given the luxury segments shifting trend toward smaller, car-based products. Mercedes just unveiled a concept version of its compact GLA crossover yesterday that will compete with the BMW X1 and Audi Q3.

SEE ALSO: Toyota Unveils New Framework for Vehicle Development

 “We’re always looking at the luxury business which will change over time,” Toyota North American CEO Jim Lentz told The Detroit Bureau.  “The consumption of luxury and what it means to Boomers may be very different for Gen-Y.  We need to prepare ourselves for what younger luxury buyers will want.”

German brands with products already pushing in that direction have the brand portfolio to support offering those models. Mercedes, BMW and Audi are also taking advantage of modular platforms with flexibility that, in theory, should reduce production costs. Those platforms are new to the market and could come with their own set of problems, but for now it can pose a problem for Toyota.

“We have to rationalize our line-up.  We can’t just add more and more and more,” Lentz said.

Last year the maker unveiled its Toyota New Global Architecture modular platform, but where German brands are already bringing products to market based similarly-minded platforms, Lexus vehicles are still based on a network of underpinnings.

[Source: The Detroit Bureau]