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
R
  • R
    RAL
  • April 25, 2018
S
ssun30
The thing is the word "brand new" kept popping out in the press release. Brand new with respect to what? With respect to the outgoing ES, sure, but that can't be more obvious.
Of course it is brand new with respect to Lexus and ES... and also, it is not the same as in Camry, where it is available for 6 months or so :)... it is actually 7hp stronger, it uses more battery power, not sure if battery is also larger... same as with Avalon.
R
  • R
    RAL
  • April 25, 2018
Gecko
^Is that brown plastic on the center console?
I noticed that too ... I think you are right. Maybe it will look good with Noble Brown ...
S
RAL
I noticed that too ... I think you are right.
Is it a base-trim car? Even fake wood could look better...
K
RAL
I noticed that too ... I think you are right.
As much as I like the design and the overall car in isolation, no way Lexus thinks this can stand a chance against the big players of the segment. I expect very aggressive pricing.
Gecko
spwolf
- I have seen every Avalon review there is, almost every single one says it is class leading vehicle. So it has some torque steer with 300hp engine, so what? So do NX and RX and rest of the best selling Toyota/Lexus lineup - obviously customers dont think it is a big deal, and Avalon/ES are supposedly much better than those vehicles dynamically.

So engine introduced few days earlier in Avalon than in ES means that Toyota is leading and Lexus is following? Cmn, be realistic. Porsche uses VW engines. Audi uses VW engines that cheap Skoda uses. 3 and 5 and 7 series share engines. Mercedes uses Renault engines that Renault puts in $10k Clio.

That 2.5l is state of the art engine, it does not matter if it got shown 2 days before in Avalon. Heck I am surprised that they made it different from engine in Camry but I guess that does not matter anymore? It has to be all new engine? I mean thats funny.
We can agree to disagree about torque steer being a problem. US media hates it and so do many consumers, so the car will most likely be reviewed as dynamically inferior to competitors and even GS. It is what it is.

I have no problem with Lexus using Toyota engines and of course I understand the business case for shared engines across a wide array of vehicles. However,
Camry debuted TNGA-K
Camry debuted A25A-FKS
Camry debuted 2GR-FKS in a sedan
Camry debuted 2.5L THS II
Avalon debuted CarPlay
Avalon debuted minor revision of THS II with 7 more horsepower
...ES just showed up using all the Toyota hardware we've already seen

It would have looked better if they had at least staged the ES reveal before the Avalon to make it seem like something was sacred for Lexus. Considering the situation with GS, the optics of this are just bad for a "premium" brand. Adding insult to injury was the continued use of "new" in their press release and teaser materials setting expectations that the product didn't deliver on for the reasons I noted above.
Madi
KOHIPEET
You see, I doubt that. If a new GS is in development, then why release the ES in Europe? Only to have the IS, the ES and the new GS in a few years time, on a shrinking, extremely competitive market.

Unless Lexus wants to establish a brand new segment between the GS and the IS but this, I think is even less likely. (perhaps they'll price it just slightly above the IS but that would cannibalize IS' sales)

If they want to succeed in this segment (success meaning sales at least in ballpark with the other manufacturer's) they need to have another, more powerfull híbrid.
It's pretty obvious what they are doing, it's that simple :
- The ES is a replacement for the GS only in the markets that were get GS only - like Europe, Japan .. etc -
- The new generation GS is under development - by the way Toyota already developed a mid-size GA-L luxury sedan, which is the ALL-NEW Crown - the new GS testing is already done since it will be basically a re-skinned Crown.
- The countries that will get the new GS are only the countries that receive ES & GS together, like US.

Enthusiast88
Outside is OK, inside is a disappointment to me. Why make the dash look like the old RX?? And cheap looking door panels. Where the interior door releases looked fresh and artistic on the LC, these just look, well, cheap. Also, my most hated "feature" on my RC is the touchpad, and they put it in the ES. Sad face. My opinion of course.
I would rather have the Avalon with the cognac interior.
K
Madi
It's pretty obvious what they are doing, it's that simple :
- The ES is a replacement for the GS only in the markets that were get GS only - like Europe, Japan .. etc -
- The new generation GS is under development - by the way Toyota already developed a mid-size GA-L luxury sedan, which is the ALL-NEW Crown - the new GS testing is already done since it will be basically a re-skinned Crown.
- The countries that will get the new GS are only the countries that receive ES & GS together, like US.

So you're suggesting, that the new GS won't make it to Europe? They might as well abandon the entire segment in Europe alltogether.
Madi
KOHIPEET
So you're suggesting, that the new GS won't make it to Europe? They might as well abandon the entire segment in Europe alltogether.
Yes, unfortunately, in terms of European market, the GS will be replaced by the ES
Ian Schmidt
Joaquin Ruhi
Is this the Sunlight Green grandiosely described as "replicating the color of ocean water brightened by the sun"? Looks more like the Ginger Ale Metallic recently offered on a number of Fords in North America or, worse, the widely derided Desert Sage (6U3) hue offered on the Lexus IS for the 2006-08 model years.
As always with Lexus press photos, wait to see the thing in person. From this photo it might be really cool in full sunlight and it might be really dumb. It's hard to tell.

emptystreets130
The interior is a big disappointment. To me it looks like a cross with the last generation RX and the current generation RX. It doesn't scream luxury with all the "white space" in certain area. The GS has a amazing interior.
The GS also starts at $10,000 more. That buys a lot of nicer interior parts.
Enthusiast88
Joaquin Ruhi
[​IMG]

Is this the Sunlight Green grandiosely described as "replicating the color of ocean water brightened by the sun"? Looks more like the Ginger Ale Metallic recently offered on a number of Fords in North America or, worse, the widely derided Desert Sage (6U3) hue offered on the Lexus IS for the 2006-08 model years.

My favorite part of the 2019 ES release is this awesome color! I hope the RC get's this option.
Desert Sage is personally one of my all time favorites. (not my car below)

L
That green exterior colour with the brown and tan interior dripping with (I assume) bamboo! Me likey!
zeusus
ES looks great, dashboard leaves room for the imagination to desire but the exterior really leads me on to believe it should be more than it is, which is an ES. If pricing doesn't really change, this car would be a great deal and sell really well.
S
Gecko
^Is that brown plastic on the center console?
I think it matches the wood color or something... or at least with that wood it was brownish and with F-Sport it was silverish.
S
Gecko
We can agree to disagree about torque steer being a problem. US media hates it and so do many consumers, so the car will most likely be reviewed as dynamically inferior to competitors and even GS. It is what it is.

I have no problem with Lexus using Toyota engines and of course I understand the business case for shared engines across a wide array of vehicles. However,
Camry debuted TNGA-K
Camry debuted A25A-FKS
Camry debuted 2GR-FKS in a sedan
Camry debuted 2.5L THS II
Avalon debuted CarPlay
Avalon debuted minor revision of THS II with 7 more horsepower
...ES just showed up using all the Toyota hardware we've already seen

It would have looked better if they had at least staged the ES reveal before the Avalon to make it seem like something was sacred for Lexus. Considering the situation with GS, the optics of this are just bad for a "premium" brand. Adding insult to injury was the continued use of "new" in their press release and teaser materials setting expectations that the product didn't deliver on for the reasons I noted above.
As to the torque steer, of course it will be inferior to "even GS". GS is great handling car, of course ES will be inferior. I am saying it means little to customers, just like GS handling better than 5 series meant very little to GS.

Why would it look better or worse? Camry was introduced first, and as such it got those engines first. Avalon got introduced 2 months before ES, so it "got" those few things 2 months earlier than ES.

Just like LS being introduced earlier means ES "gets" CarPlay sooner than it. Idea that Toyota should have delayed CarPlay and Camry and Avalon so LS and ES get it first is silly.
M
KOHIPEET
So you're suggesting, that the new GS won't make it to Europe? They might as well abandon the entire segment in Europe alltogether.
By now it's pretty much clear that the sole reason why current GS got canceled in Europe is poor sales on a global scale. Europe just happened to have the tiniest sales numbers. New ES will get to keep the same spot in the lineup as it has now which is discount premium midsize car so it's true competition in Europe will be IS300h. That is unless they do something weird with the packaging to keep the price difference at bigger spread. But I do expect to see ES300h and IS300h at the same price level in EU.

I also have a question: Why they didn't include the touchpad from UX? It had clever scrollers on the side for volume and tracking, it was a step in right direction.
A
mediumhot
By now it's pretty much clear that the sole reason why current GS got canceled in Europe is poor sales on a global scale. Europe just happened to have the tiniest sales numbers. New ES will get to keep the same spot in the lineup as it has now which is discount premium midsize car so it's true competition in Europe will be IS300h. That is unless they do something weird with the packaging to keep the price difference at bigger spread. But I do expect to see ES300h and IS300h at the same price level in EU.

I also have a question: Why they didn't include the touchpad from UX? It had clever scrollers on the side for volume and tracking, it was a step in right direction.

Probably the same reason as the LS500 and the LF-FC concept. The UX is most likely finalized after the ES which make some of the features and techs more advanced than the ES.
GTG
  • GTG
    GTG
  • April 25, 2018
The green looks nice , but the red is flawless Did anyone see or know if the car comes with a red leather option ?
S
GTG
The green looks nice , but the red is flawless Did anyone see or know if the car comes with a red leather option ?
there is red leather in Chinese press vehicle but I am not sure if it will be in all markets.
M
Airplane
Probably the same reason as the LS500 and the LF-FC concept. The UX is most likely finalized after the ES which make some of the features and techs more advanced than the ES.
That is the only conclusion that's reasonable.
GTG
  • GTG
    GTG
  • April 25, 2018
spwolf
there is red leather in Chinese press vehicle but I am not sure if it will be in all markets.
Thanks man , it’s coming to The US one day , let’s hope .
Twiz
The new ES is almost spot on the rendering photo that went around awhile ago. The rendering looked like the last gen Camry I wasn't feeling it as much but the final product ES looks good and will sell well. I'm just waiting on the new GS
Twiz
My first Lexus was a brand new 07 Es350 even thou I have graduated to the GS its nice to see the new ES. I love the ques taken from the new LS and put in the ES with the ML speaker on the door looks just like that glass cut out on the LS interior door. But I did notice something I seen ES250 on the back, I wonder what the engine options are for the new ES....
Twiz
Ok I just read the press release I see the new 4 cylinder engine I'm surprised its not turbo. Also that's a big increase in power for the v6 engine just like the Camry over 300hp
Carmaker1
Well, it has been quite an 18-month wait since admin Mike was told about this car in 2016 and gushed about it. It is a good improvement over the XV60, but not a fitting E-class or 5-Series competitor at the top end.

I look forward to watching how the European market place responds to it and if it justifies the dumping of a 25-year old nameplate, instead of implementing kaizen ACROSS the model range. Kaizen is CONTINUOUS improvement, not dump and run with spreading your bread and butter all around, for those who haven't really asked you for it in Europe and would mostly prefer an A6.

Excuse my negativity, but this does NOT bridge the GAP between the IS and LS as needed. Why couldn't this target the Volvo S90, to justify the death of GS? A cynical marketing exercise nonetheless and barely works as a tempoary placeholder.

Not everyone is a car enthusiast, but plenty of those non car enthusiasts can tell the difference in some cases and will move to the next brand that offers a product that is a direct alternative to the midsizers XF/A6/5er/E from Jaguar, BMW, and Mercedes-Benz.

My "auntie", a successful medical supply business owner (multi-millions) "leased" an ES 350 in February 2013 and quickly replaced it with a 2014 GS450h within 1 year for some rather interesting reasons. She had previously driven a W211 E350 and didn't want anything too big like an S-Class or LS. The reasons she gave in choosing a GS then, was her husband (pediatric specialist) had surprised her with the wrong Lexus for her birthday and the GS fit what she wanted more.

This is someone who I met in February 2006 (as a grown person; met earlier as an infant), that day being driven up to my family house in her realtor's 2005/06 beige ES 330 to spend the night (thousands of miles from Morristown, NJ home). Her first day in her current city of residence the past 12 years, was spent being driven around in a Lexus ES and her first Lexus locally was an 2013 ES 350. It was quickly replaced by the GS, thus breaking her lease over some disenchantment.

I wouldn't call her a car person, especially compared to my own mother who is a BMW fanatic by blood and co-raised me. This "auntie" recently went with a 2016 Porsche Cayenne, as Lexus did not (still does not) make a true Cayenne competitor and she did not like the 2016 GS facelift. Are Lexus willing to lose people like that, over and over? Like the many impatient LS 460 owners?

Anyway, I do look forward to at least writing about the new ES in August or September at earliest. Expect what happened to the SC to happen with GS. "GA-L II" might be the basis of that possibly. On its own, the new ES is a fair offering and damn well better than a Buick (competitively). Still, it isn't good when an XSE/Sportivo Camry looks sportier than a larger luxury F-Sport model.
A
KOHIPEET
So you're suggesting, that the new GS won't make it to Europe? They might as well abandon the entire segment in Europe alltogether.
KOHIPEET
You see, I doubt that. If a new GS is in development, then why release the ES in Europe? Only to have the IS, the ES and the new GS in a few years time, on a shrinking, extremely competitive market.

Unless Lexus wants to establish a brand new segment between the GS and the IS but this, I think is even less likely. (perhaps they'll price it just slightly above the IS but that would cannibalize IS' sales)

If they want to succeed in this segment (success meaning sales at least in ballpark with the other manufacturer's) they need to have another, more powerfull híbrid.
From a car enthusiast point of view, we all get why the ES cannot be a true replacement for the GS (handling, driving dynamics, RWD vs FWD) but in layman terms, there's no denying in the increased price point. You could argue that "mainstream" customers will not care about it being FWD, but what about the quality of the materials? The comfort of the GS should definitely trump the ES. The GS ($46k) in the U.S is 8k more expensive than the ES ($39k) and in Europe, the difference is even wider, the IS starts at €36k and the GS at €53k (Spanish prices). The LS in Spain is €112k and $75k in the US, there needs to be a model in between to capture that spectrum of willingness to pay.

I still think that the ES cannot compete in the same E class and 5 Series segment in equal terms. Sure, the ES has certainly being upgraded but it still has the "Camry" or Toyota stigma, a very powerful and established name while the GS has its own brand equity. I see Lexus repositioning the GS as a for door coupe a la CLS Class or A7. Make no mistake, the GS is no SC, the GS has years of experience and it is a well developed brand in the world, it's harder to elevate the ES brand vis a vis GS when you can still leverage the GS.
L
It looks so much better without spoiler.
R
What saddens me is that Lexus is perceived to be depressing the pricepoints on its models. Or so is it?
S
renyeo
What saddens me is that Lexus is perceived to be depressing the pricepoints on its models. Or so is it?
Most of the luxury brand sales here in Europe are in up to €40k sector... Lexus simply did not have much to offer there while Germans offer wide range of their vehicles in that price range.

All the recent products such as LC, LS, F models and even RX-L have moved up the price points compared to their previous versions.

S