Lexus is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan’s largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and ranks among the ten largest Japanese global brands in market value. Lexus is headquartered in Nagoya, Japan. Operational centers are located in Brussels, Belgium, and Torrance, California, United States.
Since the 2000s, Lexus has increased sales outside its largest market in the United States through an ongoing global expansion. The division inaugurated dealerships in Japan’s domestic market in 2005, becoming the first Japanese premium car marque to launch in its country of origin. Further debuts in Southeast Asia, Latin America, and other export regions have since followed. The division’s lineup has also been expanded to reflect regional specifications in model and powertrain configurations. Since its inception, Lexus has advertised its products to luxury consumers using specific marketing strategies with a consistent motif of luxury. Industry observers have attributed Lexus’ early marketing successes to higher levels of perceived quality and lower prices than competitors, which have enabled the marque to attract customers upgrading from mass-market cars. Lexus’ marketing efforts have also extended to sporting and charity event sponsorships
Lexus in China
Lexus sold 56,303 vehicles in China in 2011 – a modest increase of 6 percent over its 2010 tally of about 53,000 – at the same time China’s luxury market soared by nearly 40 percent to 950,000 units. A major reason for the shortfall was the Japan earthquake that caused production halts at most of the nation’s car-manufacturing centers and components suppliers. Production by Lexus only started to recover in July. By the end of last year, the brand had sold more than 210,000 cars since it arrived in China in 2005. After a year of sluggish growth partly due to a massive earthquake and tsunami in Japan last March, Lexus aims to boost sales in China by more than 50 percent to 88,000 units this year. Its import lineup now includes 15 models, four of them gasoline-electric hybrids. Lexus said that this year it will further increase proportion of its cars with small-displacement engines and hybrid powertrains sold in China. The company said in a statement that by the end of the year, it will have 100 authorized dealer outlets in operation, up from the 81 dealerships today.
“Change” is the keyword for its development in the Chinese market, the company said in a statement. Sales by Lexus in China doubled every year from 2005 to 2007, yet the pace slowed in 2008 and 2009 due to increased taxes on cars with large engines. At that time, almost all imported Lexus models had engines larger than 3 liters. Lexus then began to introduce more cars with small engines as well as hybrid models. It regained some momentum in 2010 with delivery of about 53,000 cars, more than 65 percent of them powered by small engines.
The Japanese brand’s sales in China still pails in comparison to its German competitors. Audi sold more than 300,000 cars in the country last year, BMW sold about 232,000, and Mercedes-Benz sold 198,000. All three have local joint ventures to produce cars at more competitive prices than imported models. Analysts said that without local production, Lexus is not likely to see significant growth in sales and market share in China. But the company has no apparent plan for a local production facility. Lexus cars are currently built only in Japan and the US. Even its Japanese counterpart Infiniti, the luxury brand by Nissan, is considering local production after only four years in China.
Picture Source: Lexus in China