Lexus confirms that the hybrid version of its best selling RX350, the RX450h, will enter production this fall at Toyota Motor Manufacturing Canada (TMMC), which also builds the Corolla and Matrix models.
This decision, from the division of Toyota that leads the U.S. luxury vehicle sales race, is in stark contrast to one that suspended work earlier this year on a U.S. plant in Alabama for the lower-priced Toyota Prius. Prius is of course the unchallenged global hybrid champion. But it saw sales plummet in parallel with declining gasoline prices in 2009. A new 2010 Prius has just gone on sale, but the U.S. plant is still in limbo as Toyota officials debate its future.
Toyota’s record losses of $4.4 billion in 2008, and a staggering loss of $7.7 billion in the first quarter of 2009 have shaken management, which is traditionally risk adverse. So adding what is essentially a powertrain option to an existing manufacturing plant costs hundreds of millions of dollars less than the more substantial tooling costs for a dedicated hybrid plant. It is also a less risky sales bet. If buyers do not appear, the Canadian plant can simply change its build mix to conventionally powered RXs, still the best sellers in the line.
The 2010 RX 450h introduces an updated version of Lexus Hybrid Drive, with a 3.5-liter V6 Atkinson-cycle engine, lighter electric motors, a smaller and lighter power-control unit and other fuel-saving touches. It offers performance similar to small V8s, with an EPA-estimated 32 mpg city and 28 mpg highway (30 mpg combined) for the front-drive version. This is about 16-20% better economy than its RX400h predecessor.
The Lexus RX series demolished the commonly held assertion at U.S. car companies that a sport utility vehicle had to be built from a truck chassis. Not only did the passenger-car derived RX300 catapult Lexus to the number one sales spot in the U.S. luxury segment where it still resides, but it ended the reign of body-on-frame, rear-drive trucks as the basis for luxury vehicles. More than one million RXs have been sold worldwide.
The second-generation RX330, debuted in 2005 with an optional gasoline-electric powertrain — making it the world’s first luxury hybrid. Together, the two versions nudged U.S. RX sales to an all-time record of more than 100,000 in 2007, with the division selling 329,177 vehicles in total. Last year RX sales plummeted to 80,000, but Lexus retained its U.S. luxury sales lead with 260,087 vehicles sold in 2008, although it was down 21.2% from 2007. (more…)