The Lexus RX series has been around for quite a few years now and is the leading sales vehicle for their SUV/crossover category. The RX series is priced great for a luxury SUV ($40,000), three model types to fit anyones taste (RX 350 RX 350 F Sport & RX 450 Hybrid), and top of the line features to go along with the styling of the vehicle. The next SUV on the list starts at $49,000 and that is exactly where it should start price wise. Usually when a company has multiple vehicles that are in the same category they are priced far enough apart to keep them separate, but what happens when vehicles are priced too close together? We will find out quickly when the new Lexus NX series comes available in the near future. The expected price tag of $35,000 – $37,000 will only be a few thousand dollars from the RX.
What could happen is that the NX, which will be priced lower, will eat up some of the sales the RX would have received. They are priced similar, they will look slightly similar, have similar options and features, etc. Why wouldn’t you pick the cheaper version if you would lose any options or features and save yourself some money every month on your car payment?
Lexus is going to be in a weird situation because their best selling SUV will start getting cannibalized by a smaller and similar model. How does Lexus escape this fate? If they price the vehicle too low they lose profit and will still have cannibalization of the RX. If they price it too high it will be the same price point as the RX and will make no sense at all.
So, who is going to be the winner? Technically no one will be. Sales people will continue having sales problems selling two similarly priced vehicles, customer will start getting confused of the differences and choose the cheaper version, and the legacy of the RX will soon fade and die.