Lexus plans 2nd 'flagship' model to augment LS sedan

TRAVERSE CITY, Mich. -- Toyota Motor Corp.'s Lexus brand is planning to launch a second top-of-the-line "flagship" model to accompany a new generation of its LS sedan, the head of the brand's U.S. operations told Reuters on Wednesday.

"We need a flagship. It doesn't have to be a sedan," Jeff Bracken, Lexus division general manager, told Reuters on the sidelines of the CAR Management Briefing Seminars.

Bracken would not say what type of vehicle the second flagship Lexus would be.

Last month, Automotive News reported that Lexus is readying a full-size coupe. Late last year, Lexus trademarked a pair of names: LC 500 and LC 500h. They are widely understood to be coupes based on the rwd LS sedan.

Sales of large luxury sedans such as the Lexus LS and BMW 7 series have slowed in recent years as affluent consumers have shifted toward luxury SUVs.

Rival luxury automakers have been winning customers with vehicles such as Tata Motors' Land Rover brand, the Cadillac Escalade from General Motors and large SUVs coming from the German luxury automakers.

The SUV surge has prompted even luxury brands with no history of selling SUVs, such as BMW's Rolls-Royce, to develop models to compete in the super luxury SUV segment.

U.S. sales have been supported by a prolonged drop in gasoline prices. Average prices at the pump on Tuesday were $2.63, down 25 percent from a year ago, according to the AAA travel group.

"In addition to the LS (a large sedan), there could be another flagship in our lineup," Bracken said. "We'll define what it is in January."

Lexus also is looking to strengthen its SUV lineup by offering a version of the midsize RX SUV with a third row seat. An RX with room for seven or eight passengers is the No. 1 request from U.S. Lexus dealers, Bracken said.

A new RX is due this fall but will not have a third row seat.

"We don't want to wait for a next generation" to add the extra seating row, Bracken said.

David Undercoffler contributed to this report.