China Debates Import Tax Reduction, Could Bring Big Boost to Lexus Sales

Posted by Kevin on May 8th, 2018

The Chinese government is considering a 50% cut to the import duty on passenger vehicles — from Bloomberg:

The State Council, or China’s cabinet, is weighing plans to reduce the 25 percent levy — which has been in place for more than a decade — to 10 percent or 15 percent, said the people, who asked not to be identified as the deliberations are private. An announcement of a decision could be made as early as next month, the people said.

China imported 1.22 million vehicles last year, or about 4.2 percent of the country’s total sales of about 28.9 million automobiles.

Lexus is one of the only luxury automotive manufacturers that does not partner with a Chinese manufacturer to produce vehicles locally, so this tariff reduction would benefit brand sales greatly — here’s a chart outlining the current import levels:

Lexus Import China

China
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Comments
S
ssun30
Toyota said three 4WD systems and 10 variants. I think it's pretty obvious the three systems are DTV-AWD, E-Four, and next-gen truck 4WD. The non-fancy version AWD used on some trims of the new RAV4 is considered an older generation system.

That means longitudinal RWD-based AWD system will be a variant of DTV-AWD.
I dont think anything is obvious though, because for LS500 AWD they use traditional full time awd and it is not included there on the list. Just like that, traditional truck system will not be included on that list either.

So included is only something all new, I doubt it will be for RWD vehicles since ultimately what they have now with full time awd is the best system you can have.

All these new systems are for lowering costs and increasing mpg, which is great for Rav4 but not for FT-1.

So not sure whats the 3rd version really. Unless it is going to be some full time awd version that is going to be applicable to both trucks and lexus rwd vehicles.
L
Does LS500 AWD have front/rear and rear right/left torque vectoring?

Also does LS have AWD with AWS? Does the ES have AWS? Renault Talisman has.
S
Levi
Does LS500 AWD have front/rear and rear right/left torque vectoring?

Also does LS have AWD with AWS? Does the ES have AWS? Renault Talisman has.
Whats aws?
Joaquin Ruhi
spwolf
Whats aws?
All-wheel steering. Lexus offers it on certain RWD platform F-Sport and F models.
S
Joaquin Ruhi
All-wheel steering. Lexus offers it on certain RWD platform F-Sport and F models.
Yeah, I got it... I guess it should have 20 best features from all the competition and nicer interior than E class, faster than BMW better quattro than Audi and all for the price of Dacia :)

Coincidentally I am just sitting across Talisman

edit: posting pic did not work from the phone :). It is nice car, but it is Passat competitor, nowhere close to Lexus.
Ian Schmidt
As a commenter on CL noted, all-wheel steering is something carmakers keep pushing and customers keep omitting as not enough of an improvement to justify the extra complexity/maintenance.
L
Ian Schmidt
As a commenter on CL noted, all-wheel steering is something carmakers keep pushing and customers keep omitting as not enough of an improvement to justify the extra complexity/maintenance.
I agree that carmakers are pushing AWS, but is does provide improvements (see Porsche, Lamborghini, Ferrari). Now if you complain about carmakers pushing features on customers that we could live without, I agree. But then let them strip all the other features, like electric heating ventilating seats, steering wheel, armrest, huge rims with rubber bands, displays, gimmick lighting, all features sold for "safety" reasons,... the list is almost endless.
S
Levi
I agree that carmakers are pushing AWS, but is does provide improvements (see Porsche, Lamborghini, Ferrari). Now if you complain about carmakers pushing features on customers that we could live without, I agree. But then let them strip all the other features, like electric heating ventilating seats, steering wheel, armrest, huge rims with rubber bands, displays, gimmick lighting, all features sold for "safety" reasons,... the list is almost endless.
i trust you are in europe since you are mentioning Talisman? I mean it is not a luxury car. I dont think anyone cares that it has AWS at all.
Audi's or BMWs or MBs in this class dont have AWS, so I dont think how that equates to heated seats.


it is particular luxurious vehicle... and it is selling pretty poorly. Attached is the one my friend has.
S
Levi
I agree that carmakers are pushing AWS, but is does provide improvements (see Porsche, Lamborghini, Ferrari). Now if you complain about carmakers pushing features on customers that we could live without, I agree. But then let them strip all the other features, like electric heating ventilating seats, steering wheel, armrest, huge rims with rubber bands, displays, gimmick lighting, all features sold for "safety" reasons,... the list is almost endless.
Well, you just listed the reason why AWS is not a priority feature. Manufacturers know well which feature are more desirable for the money, and they prioritize those that people are willing to pay extra money for.

AWS will happen at some point, we just need to be patient.
L
spwolf
i trust you are in europe since you are mentioning Talisman? I mean it is not a luxury car. I dont think anyone cares that it has AWS at all.
Audi's or BMWs or MBs in this class dont have AWS, so I dont think how that equates to heated seats.


it is particular luxurious vehicle... and it is selling pretty poorly. Attached is the one my friend has.
ssun30
Well, you just listed the reason why AWS is not a priority feature. Manufacturers know well which feature are more desirable for the money, and they prioritize those that people are willing to pay extra money for.

AWS will happen at some point, we just need to be patient.
Yes I am in Europe.

I will not die without AWS, but the same way I will not die without AWD. That does not mean AWD cannot be beneficial, nor that AWS is not beneficial. Subaru made AWD cars long before any other car makers, and made it their USP. Customers (not enthusiast) are not always informed about new technology/features, but were recently 'sold' AWD as the latest German thing (Quattro/xDrive/4Matic) that will make you drive like Alonso in any condition (not true). I have always liked the possibilities given by AWS (passive/active mechanical/electric rear wheel-steering), and the Japanese, especially Honda made it on many cars. AWS is not crucial, but better than many other features for me, so would come top on the list of not necessary features. The problem I have, it the Germans will sell AWS as the next best thing, and they were 'first'. VAG has AWS on all its expensive cars and it will trickle down on the next A4. I also expect the next 3 Series to get AWS optionally, it will no more be related to the FWD 1 Series, but the RWD 5 Series. Normal customer will never know that Talisman also has AWS (or had it before). Normal customer will not know that even the Megane in RS guise, has AWS. Nothing can beat German marketing, I and dislike it, because it is deceptive. I also dislike feature 'brands', like 4Control, Renault's rear-wheel-steering. Which customer can understand what it means? And without repeating it like the Germans, a customer will not remember. Every generic customer that has once shopped for a new car, and considered AWD, has heard of Quattro. Porsche for example is also guilty of dumbing down customers, with all their abbreviations, when all the customer cares about is the Porsche badge. Only those interested/working in the field know what something stands for and what it really does.

Why I mention AWS with regards to the ES, is because according to Lexus, whether it replaces the GS' customers or not, the goal is to bring a younger customer. I expect the ES to be not only comfortable, but also sportier and better handling. AWS, with would help. AWD more helps with grip, not handling (unless torque vectoring).

PS: I am not bashing German engineering. They are very good, world class at machinery, components, automation, whatever a lot of high tech, but cars are not what they do well/better than others. Their carmakers are specially good at marketing. Their 'deceptive' marketing (and other dirty tricks, hint: media) blows everything out of the water.
S
Levi
Yes I am in Europe.

I will not die without AWS, but the same way I will not die without AWD. That does not mean AWD cannot be beneficial, nor that AWS is not beneficial. Subaru made AWD cars long before any other car makers, and made it their USP. Customers (not enthusiast) are not always informed about new technology/features, but were recently 'sold' AWD as the latest German thing (Quattro/xDrive/4Matic) that will make you drive like Alonso in any condition (not true). I have always liked the possibilities given by AWS (passive/active mechanical/electric rear wheel-steering), and the Japanese, especially Honda made it on many cars.
Toyota is very bad at selling things that have low take rate. It ties up R&D and manufacturing and instead of doing that they can offer the car for cheaper with more standard features.

For instance I think with 4GS, RWS was very hard to find since it had very low take rate. Same for night vision and stuff like that.

With ES, they have to make sure they basics are right, not just the top end version. Something that Renault did not get with their Talisman for instance, so the resale value is in the drain right now.
L
spwolf
Toyota is very bad at selling things that have low take rate. It ties up R&D and manufacturing and instead of doing that they can offer the car for cheaper with more standard features.

For instance I think with 4GS, RWS was very hard to find since it had very low take rate. Same for night vision and stuff like that.

With ES, they have to make sure they basics are right, not just the top end version. Something that Renault did not get with their Talisman for instance, so the resale value is in the drain right now.
I'm sorry for not being able to articulate my thoughts clearly. I hope this example will help.

Carguide March 2005 - Lexus GS 430 Review
But we wonder about the rear-view camera on the test car. Some people say they are essential on four-wheel drives, to stop people backing over their children in the driveway. But a gimmick is still a gimmick. And will people actually rely on the camera for reversing and bump-free parking once they have shown it off to their friends?
Source (March 2005): https://www.carsguide.com.au/car-reviews/lexus-shapes-up-to-luxury-rivals-8688

Carguide March 2015 - Why rear cameras should be compulsory on all cars
Emma Cockburn, the mother of a 15-month-old killed in a driveway reversing accident four years ago, has renewed calls for rear cameras to become compulsory. [...]The US will make rear-view cameras compulsory on all passenger vehicles from 2018.
Source (March 2015): https://www.carsguide.com.au/car-news/why-rear-cameras-should-be-compulsory-on-all-cars-31401


Now, you hear your neighbor talk about how great his A Class because of its backup camera and trunk that opens with his foot, and why German cars are the best.


It is the wrong thread to discuss about tech, whether it is necessary or not. Unfortunately tech is mostly a marketing tool. Some tech can be good, but too expensive for the customer that cares about the badge only or the basics at least, and as you say, is just not worth the development, that has to be integrated in the supply chain of a mass produced vehicle.

But back to tech and Toyota's new mechanical AWD for FF-T cars, do you think torque vectoring is really worthy and necessary? Is it really more simple and less complicated? If it were, it could have been standard on RC-F, rather than optional, unless Lexus wants to make some good profit, which is justifiable for a business. I doubt customers would notice any difference between in real world usage. But media with their technical tests will point out that Toyota has an inferior and outdated system, so Toyota has no choice but to upgrade.
S
There was a time when Japanese manufacturers put every tech gimmick out there even on economy cars. Like adjustable semi-active suspension, CD-ROM Satnav, oscillating AC vents, four wheel steering, the list goes on. And guess what happened? Their automotive industry crashed and burnt. This kind of situation only happens when the economy is healthy. Once another recession hits people will go back to the basics, and the Germans will dial back on their feature race. An infinite feature race is not sustainable. Of course it would be great to see them making feature-rich and overpowered Bubble-Era cars again. But the Bubble-Era is gone.

You are right on the whole German marketing BS. I don't intend to insult any German out there, but the country spent the entire cold war era trying to sell this idea of "superior German engineering" to the world and succeeded massively. What is the greatest technology the automotive industry has ever witnessed in the past two decades? Hybrid drive. It's incredible how badly Toyota failed with their marketing with hybrids (of course, it's their own fault for making hybrids the worst cars to drive). And now the Germans are trying to convince the world their souped-up start-and-stop is the next biggest revolution in the auto industry, because apparently they couldn't keep up in the full hybrid game with the Japanese nor in the EV game with the Chinese.
L
I want to clarify that 'gimmick' as used in media (and me too) is an unfair term to use for any technology. It is a derogatory way of describing a feature one does not want/need/think useful. But what one wants/needs/thinks useful differs among each of us, so every feature will get a subjective judgement. Media uses the term gimmick to pass their subjective opinion as an objective fact.
krew
krew

Lexus Kentucky Plant Readies for 2019 ES 350 Production
[​IMG]

Production set to begin late summer.
View the original article post
GTG
Can’t wait to see this in the flesh .
S
ssun30
It's incredible how badly Toyota failed with their marketing with hybrids (of course, it's their own fault for making hybrids the worst cars to drive). And now the Germans are trying to convince the world their souped-up start-and-stop is the next biggest revolution in the auto industry, because apparently they couldn't keep up in the full hybrid game with the Japanese nor in the EV game with the Chinese.
Heh, I dont thinkt hey failed did they? I mean they sell 1.5m per year, and soon to be 2m. While all of the germans combined likely sell 10x less.
But sure, perception in some media is that hybrids suck and bad plugins rule, however in reality, it is obviously that the buyers of those cars do not read the press! :)

Case in point, downfall in diesel sales in Europe, despite ALL of the automotive media telling us diesels are awesome and it is just an missunderstanding, and how hybrids drive poorly, in reality diesel share in Europe went down from 55% to 38% in single year, which is biggest retraction in technology ever since Nokia failed... and next year I am pretty sure that diesel marketshare in Europe is going below 30%, something that none of the analysts ever predicted.

So I do wonder how much is media actually able to change perceptives lately, it seems that personal experience still rules in the customer, which can be seen by rapidly increasing hybrid sales by Toyota in Europe.
mikeavelli
Another thing in regards to AWS, in regards to Lexus it is usually packaged separately and the take rate is very low. My wife's GS F-SPort had it and I loved it, there was a noticeable difference compared to one with out. I think it was a 3k option and most dealers didn't order it and most people didn't request it or know about it.

Thus I don't see AWS as some amazing new option. It is on the LS F-Sport as well as an option.
F1 Silver Arrows
Levi
Yes I am in Europe.

I will not die without AWS, but the same way I will not die without AWD. That does not mean AWD cannot be beneficial, nor that AWS is not beneficial. Subaru made AWD cars long before any other car makers, and made it their USP. Customers (not enthusiast) are not always informed about new technology/features, but were recently 'sold' AWD as the latest German thing (Quattro/xDrive/4Matic) that will make you drive like Alonso in any condition (not true). I have always liked the possibilities given by AWS (passive/active mechanical/electric rear wheel-steering), and the Japanese, especially Honda made it on many cars. AWS is not crucial, but better than many other features for me, so would come top on the list of not necessary features. The problem I have, it the Germans will sell AWS as the next best thing, and they were 'first'. VAG has AWS on all its expensive cars and it will trickle down on the next A4. I also expect the next 3 Series to get AWS optionally, it will no more be related to the FWD 1 Series, but the RWD 5 Series. Normal customer will never know that Talisman also has AWS (or had it before). Normal customer will not know that even the Megane in RS guise, has AWS. Nothing can beat German marketing, I and dislike it, because it is deceptive. I also dislike feature 'brands', like 4Control, Renault's rear-wheel-steering. Which customer can understand what it means? And without repeating it like the Germans, a customer will not remember. Every generic customer that has once shopped for a new car, and considered AWD, has heard of Quattro. Porsche for example is also guilty of dumbing down customers, with all their abbreviations, when all the customer cares about is the Porsche badge. Only those interested/working in the field know what something stands for and what it really does.

Why I mention AWS with regards to the ES, is because according to Lexus, whether it replaces the GS' customers or not, the goal is to bring a younger customer. I expect the ES to be not only comfortable, but also sportier and better handling. AWS, with would help. AWD more helps with grip, not handling (unless torque vectoring).

PS: I am not bashing German engineering. They are very good, world class at machinery, components, automation, whatever a lot of high tech, but cars are not what they do well/better than others. Their carmakers are specially good at marketing. Their 'deceptive' marketing (and other dirty tricks, hint: media) blows everything out of the water.
LOL I LOVE YOU for saying "that will make you drive like Alonso".

For those who don't know this amazing god of an F1 driver, this guy is a genuine legend. Levi lets talk F1, I actually love you for saying that. It genuinely made my day. :joy::joy::joy::joy::joy::joy:
S
So does this mean US gets the ES350 later than the 300h? The 300h will be delivered in August in Asia.
S
ssun30
So does this mean US gets the ES350 later than the 300h? The 300h will be delivered in August in Asia.
Nope. ES will be launched few months later than in Asia. They have to stage the launch to get enough produced.
krew
Videos: The 2019 Lexus ES Sedan Goes Global

[​IMG]

Videos in Dutch, French, and Chinese.
View the original article post
zeusus
When I have time I want to try to explain some tidbits that was mentioned in the Chinese video.

Really interesting thing about the ES is how long the wheel base and interior rear space is, perfect mass market premium sedan for China, perhaps the sales numbers they'll throw down in China with the ES will easily dwarf global numbers for the GS, and thats how they justified the new ES and ending GS sales in Europe.

What really perplexes me is what is going to fill the MSRP gap between ES and LS? Will the ES just start low and gain tons of optional features to bring it to 55k-ish?
S
zeusus
When I have time I want to try to explain some tidbits that was mentioned in the Chinese video.

Really interesting thing about the ES is how long the wheel base and interior rear space is, perfect mass market premium sedan for China, perhaps the sales numbers they'll throw down in China with the ES might easily dwarf global numbers for the GS (not even counting EU), and thats how they justified the new ES and ending GS sales in Europe.

What really perplexes me is what is going to fill the MSRP gap between ES and LS? Will the ES just start low and gain tons of optional features to bring it to 55k-ish?

Will the GS get refreshed again to try to extend sales life?
No they couldn't justify even a minor refresh for the GS. It will head to its grave after this model year perhaps.

I can't imagine how dominting the ES could become once the drop in import tax in China kicks in.

S