Lexus UX aims to bridge price, age gap

NEW YORK — The diminutive Lexus UX crossover has a 17.1-foot turning radius, which is best in segment. That means it could do a U-turn in a standard driveway or a regulation squash court.

Lexus General Manager Jeff Bracken makes the comparisons to drive home a broader point about the entry-level Lexus arriving in December: It's looking for that elusive automotive fountain of youth.

Younger buyers, who are the gateway to a lifetime of brand loyalty, are most likely to be found in vertically oriented neighborhoods where space is tight and a maneuverable "urban explorer"— or UX — could draw them to the brand.

"We are trying to get at an audience that's probably about 35 years old, men and women by the way, and I suppose you could throw in the millennial group as well," Bracken told Automotive News on the sidelines of the New York auto show.

"And that would be a huge win for us because, clearly, with our current average buyer with all our vehicles at 60, we have a ways to go," Bracken said last month.

For Lexus to bridge the age gap, it has to bridge the price gap between its more affordable vehicles and the disposable income of younger buyers. Lexus' German rivals already have entry-level vehicles around $30,000 and are moving lower.

Lexus has said $30,000 is too low for luxury, but there's still some maneuvering room. Lexus' previous entry model, the CT hatchback, has been discontinued, and the compact NX crossover is about 6 inches longer than the UX, an inch wider and 4 inches taller, and starts at around $37,000 including shipping.

Lexus hasn't set prices for the UX, which will come in gasoline and hybrid versions, but clearly Bracken would like to have a competitive entry in a fast-growing segment. Lowering the average age of the Lexus buyer depends on both the younger demographic and on generating enough sales volume.

Dave Sullivan, manager of product analysis at AutoPacific, said he'd like to see a UX starting price of around $33,000. That price point would allow Lexus to test how the brand resonates with younger buyers. Sullivan would also like to see the hybrid as a no-cost option, though he doesn't think that's likely.

The UX is the right vehicle for Lexus to experiment with ownership options, such as the subscription pilot the brand is working on, Sullivan said in an email. "A subscription service is what all the cool kids are doing these days," he said.

Bracken said Lexus is still trying to figure out the model, which may not be called a "subscription," but would work like a monthly smartphone payment. It could be an "all inclusive" package that covers everything but gasoline. If that works, additional Lexus models could be included to draw younger buyers.

Of course, Lexus has to get those customers through the door first, and that's where the crossover's provocative styling comes in, along with its lower ride height, which moves it away stylistically from the family-oriented crossovers and SUVs living in the suburbs.

"Our take on millenials is that it's really, really difficult to tell them, 'We're building a car for you.' That's almost a turnoff," said Bracken. So Lexus used market research and the expertise of its first female chief engineer, Chika Kako, to get their attention.

Sullivan thinks going bold was the right move. "The styling is polarizing but in a way that people won't mistake it for the Lexus their grandmother drives," he said.

Bracken said the brand has set an initial sales target of 20,000 per year for the UX, which is similar to initial expectations of the NX when it arrived for the 2015 model year. NX sales surprised on the upside and hit nearly 60,000 units last year.

"It would be wonderful if the UX heads down that same path," Bracken said.