At a time when big SUVs are doing even worse than the calamitous overall market, Land Rover's iconic Range Rover model is hanging in there. It's the British brand's smaller and newer LR2 crossover that isn't working out.

Dealers say both the Land Rover LR2 and the larger LR3 have image and price problems.

Land Rover's overall U.S. sales were down 36.6 percent for the first two months — a tad better than the total market. It is the big Range Rover, starting at $78,525, including shipping, that is keeping things afloat.

Sales of the SUV were down only 17.8 percent in the first two months to 1,247 units. Industrywide, SUVs are off 51.4 percent so far this year.

The Range Rover's relative success is not because it is new. The current body style was launched in 2002; a mildly freshened body and new engines will debut at the New York auto show, which opens next week.

"Range Rover is one of those vehicles that sell all the time to the same customer," said Jerry Nelson, owner of Land Rover Monmouth in Ocean, N.J. "He doesn't want to look at anything else."

Sales of the smaller Range Rover Sport, which starts at $59,225, including shipping, fell 40.5 percent to 1,179 in the first two months of 2009. The LR2, which debuted in 2007 as a 2008 model, is down 57.1 percent to 583 units so far this year. The 5-year-old LR3 is off 28.0 percent to 590 units.

Styling issues

Dealers complain that the smaller Land Rover models have styling flaws. They say the exterior of the LR2 is bland and the LR3 interior is too utilitarian for a premium SUV.

"One of the challenges with LR2 is that there are a lot of vehicles that look similar," said Chris Marchand, executive vice president for marketing and sales at Land Rover North America. "It just doesn't stand out enough."

The LR2, which shares its basic architecture and powertrain with the Volvo S80, is up against three vehicles launched this year — the Mercedes-Benz GLK, Audi Q5 and Volvo XC60.

"I do not understand why sales of the LR2 are low," Nelson said. "It was built in conjunction with Volvo, has a Volvo engine and safety, and I thought it hit the sweet spot."

But, he said, buyers don't know about the LR2 because Land Rover has put little marketing muscle behind the vehicle.

Pricing issues

Other dealers say that the LR2 and LR3 are priced too high and that Land Rover doesn't offer competitive lease rates. The LR2 starts at $36,225, including shipping. The LR3 starts at $46,825 with shipping.

The LR3 is up against BMW's heavily subsidized X5, the popular Lexus RX 350 and Mercedes-Benz's M class. Nelson said a planned freshening for the 2010 model year will give the rugged LR3 a more luxurious interior.

Meanwhile, another product is in the works. A coupe-like crossover based on the LRX concept shown in Detroit in 2008, is likely to wear a Range Rover badge if it gets the green light for production. It would be positioned below the current Range Rover, Marchand said.

The British government recently approved a $37 million grant to help Land Rover develop the vehicle. Still, it doesn't have final Land Rover approval and would come to market in 2011 at the earliest.