August 6, 2015 / 12:26 AM / in 2 years

Lexus plans a second 'flagship' model to augment LS sedan

TRAVERSE CITY, Mich. (Reuters) - Toyota Motor Corp’s (7203.T) 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.

A security guard is reflected in the logo of a Toyota Motor Corp's Lexus car at the company's showroom in Tokyo May 31, 2013. REUTERS/Toru Hanai

“We need a flagship. It doesn’t have to be a sedan,” Jeff Bracken, Lexus division general manager, told Reuters on the sidelines of an industry conference.

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

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

Rival luxury car makers have been winning customers with vehicles such as Tata Motors’ (TAMO.NS) Land Rover brand, the Cadillac Escalade from General Motors Co (GM.N) 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 (BMWG.DE) 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.

Reporting by Joseph White in Traverse City, Michigan; Editing by Dan Grebler

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