ChinaIn the News

Lexus Outlines Chinese Expansion Plans

Lexus Takes Time in China

Lexus plans to take its time expanding the brand in China, according to a Wall Street Journal interview with Lexus International executive vice-president Mark Templin — here’s some select quotes:

“We’re not having those discussions about when we’re going to go to China,” he said. “We have a lot of work to do before we get to that point.”

“We have to grow our volume to a point where we can even justify thinking about building a car there,” he said.

“Because we’re so new we’re still establishing a retail network of dealerships in China,” said Mr. Templin. “We have to first get our distribution channels in place.” Lexus had 99 dealers in 2012, while Mercedes-Benz, for example, had 262.

“I don’t think that building the brand fast is what we really want to try to do in China,” he said “What we want to do is cultivate our image for quality and customer service and let the customers that we have go tell that story for us. That’s more effective than just us doing mass marketing and telling the world we’re great.”

With the German brands dominating the market, and Infiniti & Acura planning to open factories in China over the next couple years, Lexus is taking a big risk in the largest automotive market in the world — for some perspective, Lexus sold 64,000 cars in China last year, whereas BMW sold 324,000 over the same period.

(Politics must also be coming into play here — Japan/China relations are temperamental at best.)

[Source: Wall Street Journal (subscription required)]

  • B
  • June 5, 2013
Lexus' strategy is sound. And it worked before in the US. Going in with a "money grabbing mindset" may not be the only way to approach China. Keep building great cars, with great value, and great service, and they will come...... BD