Gasgoo.com (Shanghai June 17) - Despite the fact that most of the world's luxury automobile brands have already established local production lines in China, there is still no definite word on when world leader Toyota will begin producing Lexus vehicles in the country. According to a report appearing in China Business News, Toyota's Chinese branch officially denied that there is a timetable to domestically manufacture Lexus vehicles, adding that Toyota has no plans to produce Lexus vehicles in China at the moment.
Reports surfaced in the media earlier in the month that new progress was made on Lexus' plans to begin domestic production in China. According to the reports, Lexus' research on domestic production has already been completed, with the results of the report having been submitted to Toyota's board of directors. However when they would approve the proposal is as of yet unknown.
The reports also mentioned that Lexus has established its first brand experience center in Aoyama, Tokyo. New centers are planned to be opened in New York and Dubai. The reports added that Toyota was also looking into establishing similar centers in Beijing or Shanghai.
In a press conference last week, Toyota China news spokesman Niu Yu emphasized that China is now Toyota's second largest market and that localization of the Toyota brand is of extreme importance to the manufacturer. However, he added that there were currently no precise plans regarding domestic production of Lexus vehicles.
Lexus' delayed domestic production strategy has been blamed for its poor sales performance in the country. Immediately following its entry into the Chinese market in 2005, Lexus was able to compete with top dogs Audi, Mercedes-Benz and BMW. However, it has since fallen behind as the German luxury manufacturers greatly expanded their shares in the market. Audi, BMW and Mercedes-Benz's Chinese sales volumes last year totaled 492,000 units, 391,000 units and 218,000 units, respectively. By comparison, Lexus managed to sell just 74,000 vehicles in China. Its cumulative sales volume for the first four months of the year was only 24,000 vehicles, compared to 169,700 vehicles sold by Audi, 116,400 vehicles sold by BMW and 89,500 vehicles sold by Mercedes-Benz.
Lexus has managed to make impressive strides in the American market, with its monthly sales in May exceeding Mercedes-Benz's for the second time this year and coming close to BMW's.
When commenting on Toyota's plans for Lexus in China, Mr. Niu made the following statement: "Our current stage for the Chinese market is to develop the Lexus brand in the country. To improve [Chinese] consumer Lexus brand awareness, [we are] currently bringing over new models, expanding the sales network and developing aftersales services. Lexus' complete product line has essentially all been brought over to the Chinese market. After meeting our localization targets, we will consider whether or not to domestically manufacture vehicles."
Hybrid vehicles seem to be a key area of development for Lexus. From January to April, Lexus sold a total of 6,503 hybrids in China, accounting for 27 percent of its total vehicle sales in the country. Whether or not Lexus is considering making use of Toyota's hybrid powertrain research and development center in Changshu, Jiangsu is another topic of interest. When asked about the topic, Mr. Niu replied that Toyota China has no plans for the moment.
