Lexus
By Doron Levin
July 15, 2014

Automakers don’t design luxury models to gratify their egos. They’re responding to consumers who pay premium prices for luxury, generating potentially enormous profits.

Toyota’s Lexus division takes Toyota models, incorporates luxury features, tweaks mechanics – and is able to charge much more than the extra cost of leather and more premium components. Hence, Lexus’s latest new model: the NX crossover, based on the less fancy Toyota RAV4. NX is the latest addition to the compact crossover genre, the hottest in the global industry.

Though NX prices haven’t been announced, they probably will start at $35,000 or more and reach close to $50,000, with all the frills. RAV4 starts at about $26,000 and can cost as much as $33,000.

The arrival of NX is timely for Toyota, which pushing to maintain global leadership in competition with Volkswagen Group and General Motors (GM).

Earlier this year, Jeff Bracken, general manager of Toyota’s Lexus division in the U.S. told Automotive News the company expects to sell 2,200 a month in the U.S. when the model debuts later this year as a 2015 model. He noted that “from a size standpoint it is basically the same size as the original Lexus RX300,” one of the models that defined the segment when it appeared in Japan in 1997 and in the U.S. in 1998.

“Nobody has made any analogy to it being an over-sized RAV4,” Bracken said.

NX, with an oversized spindle grill, embodies Lexus’s latest design language, which, as a matter of taste, has gained acceptance from many for its imagination and distinctiveness. The choice of engines will be a 2.0-liter turbocharged, generating 235 horsepower, or a four-cylinder gas-electric hybrid rated at 194 h.p.

While some savvy consumers will see Lexus NX as merely a fancier, pricier version of RAV4, Toyota has been skillful in keeping its brands separate and distinct. One way has been to offer, through its retail dealers, a higher level of pampering and service to Lexus customers. For example: When NX needs service, it’s more likely a loaner will be available; and the Lexus waiting area are likely to be equipped with a cappuccino machine, WiFi and a flat-screen TV.

One automotive magazine aimed at enthusiasts dubbed NX a car for “yoga moms.” Like the RX before it – an “AARP favorite” – the front-wheel-drive vehicle skews toward a female buyer, though NX will strive to attract a younger audience. Top competitive models are Acura RDX, Mercedes-Benz GLK, Audi Q3 and BMW X3.

Among the little extras that will separate NX from RAV4 are g-force sensors, a wireless device charger, heads-up display and adaptive cruise control.

The SUV, so it seems, is back in spades, in smaller-and-smaller dimensions and in luxury versions. Toyota, with a market capitalization of roughly $190 billion, is back, too, following the uproar over quality and safety, a tsunami and global recession.

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