Lexus launch in India confirmed

Toyota has officially confirmed that it will introduce the Lexus brand in India by 2013. The Japanese carmaker has been evaluating the feasibility of its luxury brand in India for several years now and has finally decided to go ahead with the launch. “We have been watching India with keen interest and we are happy to announce that we will bring Lexus to India in 2013” confirmed Yukitoshi Funo, executive vice-president of Toyota Motor Corporation.

The Lexus range will be sold through dedicated dealerships, though several Toyota dealers are likely to take up the franchise to take advantage of their service set up that requires common equipment for both brands. However, Toyota will take a very cautious and diligent approach to appointing dealerships. “We would rather have a few, quality dealerships than a large number of mediocre outlets” said Funo who also emphasised that he wanted to differentiate Lexus from its German rivals. Last month Kazuo Ohara, who oversees the Lexus brand globally, made a visit to India and gave the green light after intense market research, which included studying the dealer and service outlets of other brands.

Toyota plans to follow a top-down strategy and the initial plan is to introduce the LS saloon and RX SUV, both premium luxury models. This is likely to be followed by the GS executive luxury saloon which competes directly with the E-class and 5-series.

The company will initially bring the Lexus range as imports or completely built-up (CBU) units to test the market before considering local assembly. “We need consider local production to compete with the others in the market, but this is still being studied,” said Funo. It is likely that the compact IS models will be locally assembled in time.

The initial feedback and market studies for the Lexus brand have been very encouraging. “The Indian consumers’ awareness of Lexus is quite surprising and much more than we anticipated,” said Funo. However, the challenge will be to price the cars competitively, especially since Lexus will initially import cars and will be at a cost disadvantage in comparison to rival luxury brands that locally assemble and hence pay lower duty. Also, there is no diesel engine in the Lexus range which could be another disadvantage. However, Lexus will introduce its hybrid technology, which could click with customers looking for the ultimate in refinement.