Lexus NX Crossover to Pursue China’s Audi-BMW Buyers

Source: Toyota Motor Corp. via Bloomberg

Toyota Motor Corp. Lexus NX300h, left, and NX200t F Sport. Close

Toyota Motor Corp. Lexus NX300h, left, and NX200t F Sport.

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Source: Toyota Motor Corp. via Bloomberg

Toyota Motor Corp. Lexus NX300h, left, and NX200t F Sport.

Toyota Motor Corp. (7203)’s Lexus will show its newest production-ready crossover at the Beijing Motor Show for the first time as it tries to narrow the gap with German luxury car brands in the world’s largest auto market.

The NX will be Lexus’s first compact crossover, the company said today in a statement. The model, positioned below the mid-sized RX that Toyota introduced more than 15 years ago, will compete with Bayerische Motoren Werke AG’s X1, Volkswagen AG’s Audi Q3 and Daimler AG’s Mercedes-Benz GLA.

Toyota President Akio Toyoda is pushing to add more “flavor” and “seasoning” to the lineup at the world’s biggest automaker and in February promoted a designer to lead its luxury division for the first time. BMW and Audi each outsold Lexus more than three-to-one globally last year, as Toyota’s reluctance to introduce local production of luxury models in China raises prices in that market.

“Without a localization assumption and thus with a higher price in this entry premium segment, the Lexus NX will find it difficult to gain ground in China from its German rivals, namely the locally made BMW X1, Audi Q3 and MB GLA,” Zhu Bin, a senior analyst at researcher LMC Automotive in Shanghai, said in an e-mail.

LMC Automotive estimates Toyota will sell 2,720 NX crossovers in 2015, capturing 1.3 percent of the entry premium segment. While the researcher projects NX sales will rise to 3,763 by 2018, the model will trail growth in the broader segment, paring Toyota’s share to 1.2 percent, Zhu said.

First Turbo

The NX will be the first Lexus model offered with an optional turbocharged powertrain. Toyota plans to introduce 14 new engines globally by next year that boost fuel efficiency at least 10 percent, the company said yesterday.

“The market tends to view Toyota as lagging behind in conventional powertrain innovation,” Tatsuo Yoshida, a Tokyo-based analyst for Barclays Plc, wrote yesterday in a report. “We think the adoption of next-generation powertrains could help eliminate this perception.”

Lexus sold more than 523,000 vehicles last year, a record that topped a previous best of 518,300 set in 2007. About half of the brand’s worldwide deliveries were in the U.S., where sales gained 12 percent to 273,847.

BMW sales climbed to a record 1.66 million last year, making it the leader in the global luxury auto market, followed by Audi’s 1.58 million and Mercedes’s 1.46 million.

To contact the reporter on this story: Craig Trudell in Tokyo at ctrudell1@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net Lena Lee, Dave McCombs

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