Lexus ponders drop-top options

As the only convertible in its lineup approaches the end of its life cycle, Lexus is looking ahead to another critical step in the balancing act it's undertaking: trying to appeal to younger buyers while keeping its core customers.

At last month's Los Angeles Auto Show, Lexus showed a roadster concept it called LF-C2. The car was designed to appeal to "traditional luxury buyers" and an "exquisitely styled buyer group of younger folks," said Jeff Bracken, Lexus Division general manager.

Bracken says the LF-C2 was "purely a concept" and not slated for production. But according to a person familiar with Lexus' planning, the brand is considering whether to produce a version of it to sell as the convertible RC -- an affordable, sporty stablemate for its newest coupe -- or to build a convertible version of the much more exclusive LF-LC concept it showed in 2012 at the Detroit auto show.

A convertible based on the LF-LC would be a halo car that elevates the brand, while the RC version would sell more vehicles. "The question is: Is the brand willing to support two convertibles?" the person said.

How to replace the aging IS convertible is at the heart of a broader debate at the 25-year-old luxury brand, which led the luxury segment for more than a decade, but now trails BMW and Mercedes-Benz: Should it try to compete against those rivals on the basis of prestige, or chase them on volume?

Bracken acknowledges that Lexus doesn't expect to win back its luxury crown this year, but notes that it has been narrowing the sales gap with Mercedes in recent months, thanks to strong sales of the IS compact sedan and CT hybrid, vehicles aimed at a younger demographic.

With an average customer age of about 60, Lexus must change its approach toward becoming a full-line luxury brand to appeal to customers in their 30s and 40s as well, Bracken told Automotive News at the Los Angeles show.

"We definitely like our older customers," Bracken said. "It's just that we need younger buyers in addition to that. When you look at the size of the [market for] younger buyers, it's bigger than baby boomers and seniors, so just from a pure business standpoint, it would be foolish for us not to consider Gen X and Gen Y. Otherwise, we'll get smaller and smaller."

Working convertibles into that mix can be tricky. While they have some emotional appeal for younger consumers, they provide little in the way of the utility that these buyers demand, said Edmunds editor Mark Takahashi.

"As the economy is still recovering, convertibles are still viewed as a luxury item," Takahashi said. "Most shoppers are looking to get the most out of their investment and for the time being, that's a crossover SUV."

Lexus dealers say they are eager for an entry in the growing three-row crossover segment, one that could compete with the BMW X5 and Audi Q7. Lexus said the decision over how to replace the IS convertible will not affect its plans for a three-row crossover.

The IS convertible, introduced as a 2010 model on the second-generation IS sedan platform, has had sales steadily decline for the last four years.

Takahashi said Lexus may look at its next convertible as a way to extract more sales from its core customers, affluent baby boomers who no longer need a lot of cargo room and can afford a weekend plaything.

"It's possible that Lexus is attempting to appeal to these buyers and compete on a more emotional level as other brands," he said.

That may be enough for Lexus. "We do think certainly that there's a market for convertibles in the luxury segment," Bracken told Automotive News last week. But he added: "It's not a huge volume item for us."