Lexus Considers Manufacturing ES in North America, Releases Regional Sales Estimates


Lexus ES Pair

WardsAuto spoke with Tim Morrison, Lexus USA’s vice president-sales and dealer development, about the increased pressure from dealerships for a North American-built ES:

“One of the requests we’ve had from our dealer council is to figure out a way to get the ES – or one of our other volume vehicles – here just to blunt the (negative effects of) currency exchange,” he says. “(But) when you look at whether you want to shift production to North America, that’s a very big decision. It’s a lot of money, and there’s timing with changeovers, etc.

“I’m not in those meetings, but I’m sure it’s a conversation that’s taking place. We’re not there yet, but I can tell you it’s coming.”

Currently built in Kyushu, Japan, the ES is the most likely Lexus model to be produced in North America, as it shares the engines and various parts with the Toyota Camry & Avalon, both of which are manufactured in Georgetown, Kentucky — at this point, seeing a North American-built ES seems inevitable.

One point in the WardsAuto article regarding ES sales:

…the U.S. market is expected to account for 50% of output, with China taking 30% and Europe 20%, officials say.

This is a very curious breakdown — let’s dig a little deeper into the numbers.

In 2010, 89,212 ES 350s were sold worldwide, with 48,652 units sold in the USA, 28,971 units sold in China, and 11,589 units divided up among all other ES markets (Russia, Canada, & the Middle East).

For the new 2013 ES, Lexus is estimating sales of about 100,000 units a year worldwide — at least 50,000 units are destined for the USA, and China should be able to sell 30,000 units based on 2010 sales, but 20,000 units a year in Europe would represent some significant growth, especially when Russia is the only European market that currently offers the ES.

Even spread across the traditional ES markets (Russia, Canada, & the Middle East), 20,000 units would require nearly doubling sales — a tall order considering that Lexus isn’t forecasting any significant growth in the USA or China.

The purpose of all this math? Two points — these expanded sales numbers could indicate that Lexus is planning to expand the ES into Eastern European countries (seems unlikely), or it could be an early estimate of sales for the right-hand drive version of the ES set to debut in 2013.

[Source: WardsAuto]

Comments


  • http://twitter.com/VCLT The Victor

    I really hope they don’t move manufacturing to NA, but if they have to I hope it’s going to be TMMC and not in United States of America. There’s a reason why reliability drops when they move manufacturing out of Japan. 

  • PG

     Please provide a source if you claim that “reliability drops when they move manufacturing out of Japan”. Are Canada-built RX less reliable than the ones from Japan?
    I don’t think the location of manufacture plays a role. What matters is, how serious they take quality control.

  • Pattebb

    Why do u think unlikely crew, that the ES would not come to Europe, i think it would do great here: Toyota have no Camry here, so it have no family competitor, and it have much better price then the GS, and good milage with the new ES Hybrid, i can imagen it can sell very good with a good price here in Europe..Hmm and bring a wagon to…lol

    Have a nice evening everybody

  • http://twitter.com/VCLT The Victor

    Well I just have read about some Toyota recalls that were specific to US manufactured Toyota vehicles. Yes that’s not a very good statement to back up what I said early at all, but it’s just something I noticed. 

    Also I’m just a fan of Japan and Canada. (some other places too…. but irrelevant)

  • Corradomr2

    Agree with PG.  In fact the Canadian Lexus plant in Cambridge, Ontario has won the top JD Power manufacturing quality award, tied with the Japan Lexus equivalent: 

    http://www.lexus.ca/lexus/experience/en/home/vehicle/quality.jsp?url=in_the_news.html#Award_JDPower_1

  • Corradomr2

    Agree with PG.  In fact the Canadian Lexus plant in Cambridge, Ontario has won the top JD Power manufacturing quality award, tied with the Japan Lexus equivalent: 

    http://www.lexus.ca/lexus/experience/en/home/vehicle/quality.jsp?url=in_the_news.html#Award_JDPower_1

  • BlackDynamiteNY

    Lexus already has one volume model (The RX) built in North America (Cambridge plant)
    BD

  • Brad

    Sorry,but I think “The Victor’s” comment is some what legion as I can recall certain plants in the US having teething issues(Japanese brands) & plant managers from Japan having to come to the US factories to study where the quality issues were occuring.(I believe Honda Accords & Mazda B-series trucks were 2 such examples-even lately,certain bolts for the Accord that were manufactured in the US were defective,but their counterparts manufactured in Japan were fine,albeit,manufactured in a way that is not invironmently friendly & not legal here due to the coating process.)

    If I may add my own opinion,I hope they do start manufacturing more Lexus vehicles in NA as it would good for everyone.I have full confidence in Toyota/Lexus to manufacture vehicles here that are the same caliber as the ones offered in Japan…They have,after all,years of experience at it.

  • Gkvcj1

    Americans agave fat fingers..

    Japanese have soft, thin and stiff fingers

  • LexusLVR

     Toyota sold the Camry in Europe a decade ago. It was a sales flop, hence they pulled it off the market and offered the smaller but better-suited Avensis instead.

  • Yes

    toyota will put the es where it makes sense, and that is at the georgetown plant.  Georgetown had better quality than canada back when they were awarded the lexus years ago, and we will do it again!