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LEXUS Australia has revealed that a shortfall of SUV supply from the factory has kept sales of its strongest performers in check.

The company’s best-selling SUVs in 2016 have been the NX (2914 sales to the end of October 2016) and larger RX (1666 sales), which are up 16.5 and 21 per cent respectively compared to the same period last year.

Its largest SUV, the Toyota LandCruiser 200 Series-based LX, has also been selling well above estimations, up by 74.5 per cent with 246 sold so far this year.

Market insight: Lexus - Click to enlarge

Market insight: Lexus – Click to enlarge

All up, Lexus SUV sales have recorded growth of 20.1 per cent this year, offsetting a 9.1 per cent decline in its passenger car volume to keep the Japanese brand in positive territory overall, up 6.6 per cent with 7941 sales YTD.

Lexus Australia chief executive Peter McGregor revealed this week that the figures could be higher if the company was able to source more cars.

“We have been restricted all year on all three SUVs,” he said at the launch of the company’s IS facelift in Melbourne. “The sales performance does not reflect free supply in any of those models.”

Mr McGregor suggested the shortfall reflects overall market trends of higher demand for SUVs putting pressure on manufacturing capacity.

In demand: Supply of successful SUV models like the NX (left) and RX may take two years to stabilise for Lexus.

In demand: Supply of successful SUV models like the NX and RX may take two years to stabilise for Lexus.

“We have discussed with our parent what the level of demand would be for the next 12 months and we are in negotiations at the moment to achieve a level of supply to satisfy that demand,” he told GoAuto.

“We would only ever want to bring this into balance anyway – we don’t want to oversupply the market. We just want to bring it into balance, and we think at the moment that the market can actually tolerate some enhanced supply.”

The lack of supply has not drastically affected the overall position of the company in terms of yearly sales, with Mr McGregor predicting Lexus is still on track to break 9000 sales in 2016.

“I don’t think we’re talking 20 per cent or 30 per cent (sales growth),” he said “We weren’t supplied by half or anything like that. There would be a reasonable increase but you wouldn’t have seen the volume go from 9000 to 18,000.”



However, a solution will not be available in the short term, according to Mr McGregor.

“I’ll think we’ll be able to close out (new supply deals) in the next couple of years, but it really will depend on worldwide trends,” he said. “If you look at the US and even Europe, the trend to SUVs is very strong.

“Our parent company will seek to satisfy our demand, and they’ll do their best, but whether they can actually satisfy worldwide demand or not is something I can’t answer.

“If they can’t, then we’ll have to bear our share of the restrictions like everybody else.”

Lexus UX Concept

Lexus UX Concept

Last year, Lexus SUV sales outpaced its passenger car registrations in Australia for the first time, with the Japanese car-maker shifting 4788 high-riding wagons compared with 3903 sedans and hatches.

While it is unsurprising given the uptake of SUVs Down Under, it marks a shift from nearly a decade ago in 2006 when it sold 4249 passenger cars compared to 2913 SUVs. So far this year the tally is 3115 passenger cars to 4826 SUVs.

Mr McGregor was also buoyant about the future of the brand’s largest SUV, the LX, despite looming emissions standards potentially endangering the upper-large SUV’s Euro 5-compliant 5.7-litre V8 petrol engine.

“LX is a very important part of our line-up,” he told GoAuto. “In fact, since we launched the mid-cycle facelift in late 2015 it’s one of the ones we can’t actually keep up with demand. As such, we see that as part of our ongoing model line-up. We have no expectation that we’d be looking to get out of that segment.”

Mr McGregor was coy when asked about the future of a compact SUV that is likely to be based on the UX Concept revealed at this year’s Paris motor show, but admitted it would be a start for Australia if it goes into production.

Lexus NX 200t

Lexus NX 200t

“I was gratified to see the concept car,” he said. “If the parent decided to put a vehicle similar to that into production if that decision was made, and the trend towards SUV continues in Australia, certainly Lexus Australia would be asking for that model to be introduced.”

He was less enthusiastic about the possibility of a Lexus-branded pick-up in the vein of Mercedes-Benz’s forthcoming X-Class ute.

“While I can’t comment specifically on future model plans, I would say I never rule anything in or out,” he said.

“That said, I think we’d have to be satisfied that it fit with the basic ethos and philosophy of Lexus, and I’m not sure we’ve covered that, certainly from a Lexus Australia point of view.”

By Tim Robson

Market insight: Lexus - Click to enlarge

Market insight: Lexus – Click to enlarge

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