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


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
Comments
Look at 1:48 in the following video, is that a rear seat back adjuster?

Madi
Look at 1:48 in the following video, is that a rear seat back adjuster?

Amazing video, thank you... Quality of the interior is pretty nice in good quality videos, looks great. They even matched the plastics colors in different interior models.

As to the rear recliner, yes, it seems to have electric rear recliner. and white F-Sport looks amazing.
Madi
Now may some folks will stop the GS discontinuation non-sense after realizing that - as I said before -
- No AWD ES
- New GS is on development
:):)
Yup. People are quick to forget that the GS took a model-year off (2012) between the 3rd and 4th Generation :p I have a strong feeling that the 5th Generation will be a A7/Gran Coupe/CLS competitor.

Madi
Look at 1:48 in the following video, is that a rear seat back adjuster?
FINALLY! Great eye you have. I've been waiting for them to at least offer heated rear seats in the sedan lineup. I really hope that those rear controls make it to the US-spec vehicles.
ThePenguin
Yup. People are quick to forget that the GS took a model-year off (2012) between the 3rd and 4th Generation :p I have a strong feeling that the 5th Generation will be a A7/Gran Coupe/CLS competitor.



FINALLY! Great eye you have. I've been waiting for them to at least offer heated rear seats in the sedan lineup. I really hope that those rear controls make it to the US-spec vehicles.
Rear heating is given for sure, even in US spec vehicles.
R
  • R
    RAL
  • April 26, 2018
Madi
Look at 1:48 in the following video, is that a rear seat back adjuster?

Thank you @Madi for posting this video. Good to see an interior in Noble Brown/wood!
Very nice design. I just find it so ironic, how both this and the Avalon are both on new platforms, yet they are so evolutionary in design. Yet, the predecessors looked so revolutionary! Seems deliberate. Very amusing how this happens with certain brands over the years, where a new top hat on old platform changes things up aesthetically, then subsequent new platform version can look like a refresh.

I definitely liked the 6ES improvements over the 5ES, so this does a great job in evolving the ES model line and at least making it more of a global offering. On its own, this is a good offering and can only do better by mid-cycle (as Gecko once said). They should make the ES be to the LS 500 that the 1987-2002 Lincoln Continental was once to the 1989-2002 Town Car.

Ultra luxury rear seat amenities, but while withholding certain features like massage, extra adjustments (6 way vs 12 way), and media/entertainment offerings for LS only (smaller rear screens). See how BMW manages rear seat packs for 5-Series against the flagship 7-Series since 2010. Considering that 240B final designs were set 2 years ago, I can imagine it wasn't timely enough to pack in more content against the GS being in limbo.

Even if the GS became/becomes 4-door coupe, the ES really needs to cover the luxury side of things on the lower end like all other midsizers. Things the A7, CLS, and 6-Series were a bit lacking at the rear, that the A6, E, and 5er had to offer something comfort oriented, especially in Asian markets.

An ES priced from $39k USD to $65k would've been ideal, where a fully loaded ES 450 above ES 350 had a Dynamic Force 3.0L TTV6 AWD putting out 370 HP and a UL package with every option ticked (RES dual screens w/limited functions against LS, cooled/heated power rear seats, front massage only, etc).

While the LS offers extras you cannot get in an ES, such as rear massage, touch screen center console in rear. They seem to be there almost, judging by some recent videos, that have rear seat controls.
Carmaker1
Very nice design. I just find it so ironic, how both this and the Avalon are both on new platforms, yet they are so evolutionary in design. Yet, the predecessors looked so revolutionary! Seems deliberate. Very amusing how this happens with certain brands over the years, where a new top hat on old platform changes things up aesthetically, then subsequent new platform version can look like a refresh.

I definitely liked the 6ES improvements over the 5ES, so this does a great job in evolving the ES model line and at least making it more of a global offering. On its own, this is a good offering and can only do better by mid-cycle (as Gecko once said). They should make the ES be what the 1987-2002 Lincoln Continental was once to the 1989-2002 Town Car.

Ultra luxury rear seat amenities, but while withholding certain features like massage, extra adjustments (6 way vs 12 way), and media/entertainment offerings for LS only. See how BMW manages rear seat packs for 5-Series against the flagship 7-Series since 2010. Considering that 240B final designs were set 2 years ago, I can imagine it wasn't timely enough to pack in more content against the GS.

Even if the GS became/becomes 4-door coupe, the ES really needs to cover the luxury side of things on the lower end like all other midsizers. Things the A7, CLS, and 6-Series were a bit lacking at the rear, that the A6, E, and 5er had to offer something comfort oriented, especially in Asian markets.

An ES priced from $39k USD to $65k would've been ideal, where a fully loaded ES 400 had a Dynamic Force 3.0L TTV6 AWD putting out 370 HP and a UL package with every option ticked (RES dual screens w/limited functions, cooled/heated rear seats, front massage, etc).
Indeed, I think when it comes to the design, since ES is so established and sells well for them, they are less willing to experiment in design compared to other new models or models that are not leaders in sale. Case in point new UX for instance, which is really out there, more so than any other Lexus model I remember.

When it comes to the engines, there are many rumors from Asia about 2.5t, did you hear anything about it? or AWD?
I wonder if there will be the head up display option.

I can’t imagine an ES without it.

Especially if they wanted to cancel the GS.
CrisB
I wonder if there will be the head up display option.

I can’t imagine an ES without it.

Especially if they wanted to cancel the GS.

Yeah, its in.
Carmaker1
Very nice design. I just find it so ironic, how both this and the Avalon are both on new platforms, yet they are so evolutionary in design. Yet, the predecessors looked so revolutionary! Seems deliberate. Very amusing how this happens with certain brands over the years, where a new top hat on old platform changes things up aesthetically, then subsequent new platform version can look like a refresh.
Same thing happening at Subaru.
renyeo
What saddens me is that Lexus is perceived to be depressing the pricepoints on its models. Or so is it?
Interesting point. Something went wrong along the way, in trying to compete at the same price with more for your money. BMW has that issue with the 750i/Li against the S550 (now S560).
Levi
Same thing happening at Subaru.
Well my friend, Subaru isn't really up there and nothing they do surprises me. It wasn't really a criticism by me, just an interesting observation I have noticed recently. As a past Jaguar engineer, I found it interesting how the 2003 X350 XJ was all-new, yet deemed evolutionary based on styling. New platform and everything, yet the so-called revolutionary XJ was the 2010 X351, which uses the same aluminium chassis with improvements.

I am just comparing the night and day differences between the 2006-2012 K Platform ES XV40 and 2012-2018 XV60, against new 2019 model. Ditto for Avalon, more than anything. The 2012 Avalon looks ancient compared to the 2013, despite being mechanically identical in ways. The 2019 Avalon looks similar, yet is essentially 99.9% new.

spwolf
Indeed, I think when it comes to the design, since ES is so established and sells well for them, they are less willing to experiment in design compared to other new models or models that are not leaders in sale. Case in point new UX for instance, which is really out there, more so than any other Lexus model I remember.

When it comes to the engines, there are many rumors from Asia about 2.5t, did you hear anything about it? or AWD?
It's not really what I meant, but a good point nonetheless. Similarly based on sales success, BMW refused to make that mistake with the 2005 E90 3-Series and facelift Gen 1 E53 X5 (planned for late 2003 / MY2004) very last minute.

They stopped ﹰChris Bangle in his tracks in early 2002, just months after the 2002 7-Series was revealed during summer of 2001 to exreme derision, before signing off on the final E90 exterior by designer Joji Nagashima (of 90s BMW fame) in March 2002. As late as early 2003, even more changes were ordered to the E90 taillights to simplify them ahead of December 2004 Job 1. Result wasn't as extreme as the 7-Series and 5-Series of that era.

Other than the ES, what Lexus model needs a conservative/evolutionary approach, to protect sales? I can only say, the RX. Ironically, the extreme AL20 RX jumped in sales to extreme heights for 2016 (best ever?):eek:, despite vocal hatred of the avant-garde design. I am thinking the IS will be the styling revolution, since the GS won't be debuting the new design language after being put on ice. Think LS+ in design, 5GS-F rendering. LS+ Concept was a look at the new IS, using LS body and also future LS changes.

Naturally the new ES was supposed to take after the 5LS design, but because the XF50 LS was designed so long ago (early 2010s), a new design language was already brewing, expected to be seen on 5GS next year.

Problem was, UX at the entry end couldn't debut it entirely and anything else isn't really a redesign (GX facelift) over the next year. Meaning, 2021 model year will introduce the new design language. Either with 600X code NX, 4??? code IS, or 650B code L? flagship CUV. The next LX is reportedly Job 1 of January 2020.
I think strategy is pretty obvious here. They are banking on Toyota reskins up to $60,000 price range, everything above it would be RWD pure Lexus. Let's wait and see what will happen with IS and RC two generations down the road.
I'll say it again, they are going to sell every last one. The Avalon has gotten very solid reviews so I'm sure Lexus won't miss the boat.

I foresee reviewers trying to figure out if this replaces the GS and how it being FWD with no AWD option keeps the door open for another GS.
The engine bay? Looks messy and unlike normal Lexus sealing off?
In the press release, if I’m not wrong, they did not mentioning VDIM, do you think they use the same technology as we have, just for example, in the IS300H?
Carmaker1
Interesting point. Something went wrong along the way, in trying to compete at the same price with more for your money. BMW has that issue with the 750i/Li against the S550 (now S560).

Genesis and some Kia models also look like trying to give more for same price, and doesn't seem doing that well. When competing on price in this industry, it might be better to find ways to give the same (if not more) for lower price. That is what the first gen LS did, no?
Rob Grieveson
The engine bay? Looks messy and unlike normal Lexus sealing off?
Assuming that's not just prototype-itis, I actually prefer that. I like seeing the actual engine when I open the hood and not some dumb plastic cover. (Yes, I know that ship sailed long ago even at the low end of the market).
So it has heated rear recliner, then it's an instant buy for me.
I didn't expect this but the ES will debut in the UK with 4 engines:

The range will include the ES 300h, on sale from December 2018, powered by a new self-charging hybrid system, together with the ES 200, ES 250 and ES 350 petrol engine models that will go on sale from September 2018.
Do you think the new ES is built with BEV variant in mind? It looks like Toyota's new platform is as modular as BMW's, if not more. The LS has been shown, as concept car both as HFCEV and BEV. Toyota will reveal the CH-R BEV version. I think at this point it is a given the UX will have a BEV variant. The ES could too then. It would even make alot of sense for China, where they like sedans, and Germans make LWB version of their sedans for the Chinese market. This is a huge opportunity for Lexus to gain some market share in China.
asoksevil
I didn't expect this but the ES will debut in the UK with 4 engines:

The range will include the ES 300h, on sale from December 2018, powered by a new self-charging hybrid system, together with the ES 200, ES 250 and ES 350 petrol engine models that will go on sale from September 2018.
350 in UK? ... I find that hard to believe unless engine inside is not 3.5 V6. Western Europe never got the 3.5 V6 in any of the models, even 3GS have remained GS300 over there during it's lifetime. Why now? It made sense ten years ago in IS and GS to rival German NA and first gen turbo engines.

Most likely it's just a general PR suited for the whole European market which counts in UA and RU as their integral parts. In both of those places 3.5 V6 is available.
The way I understand it, the UK is only getting the ES 300h. From the Lexus UK Media Site's 7ES news release:

Available from January 2019, the UK range will feature the ES 300h, powered by a new self-charging hybrid system. ES 200, ES 250 and ES 350 petrol engine models will be available in certain other European markets from September 2018.
Joaquin Ruhi
The way I understand it, the UK is only getting the ES 300h. From the Lexus UK Media Site's 7ES news release:
I got that PR info from Lexus UK ES website but then I went to Lexus EU website and it was the exact same info so they just probably didn't update it for the U.K. The ES300h seems to be the only option.
I just came back from the Beijing Motor Show to share something about the new ES.

Well, there really is not a lot to say, but a lot to rant. I didn't even take any pictures of it, we saw all of them online. They only show the exterior and don't allow interior visits, so it's really hard to add any details.

Overall I am deeply disappointed with the ES launch and their overall marketing effort. To begin with, their booth is very, very small. It's not even half the size of Infiniti and Acura's, so there's no point even comparing it to BBA. As a result, they are not even displaying all their models, no GS or GX is predictable since they are on their way out. There is no RC; there is a white LC which certainly isn't the best color to show in a heavily lit hall, and the LC is at a corner that people easily miss. It seems they didn't understand that sports cars are what attract people to visit them in the first place. By comparison, Mercedes has their 4-time F1 champion car right at the entrance; Alfa Romeo has the perennial last-row finisher Sauber F1 car (which the general public don't know, they only know they do F1); Audi has the carbon fibre grey R8 V10 Plus and an absolutely gorgeous lemon green RS4 Avant (they even sell it here!), not to mention a full row of M cars, starting from 1 all the way up to 6, in sedan and crossover flavors, plus a M760 V12, at the front row of the BMW booth. Their booth is bland and barren. They didn't show a structural blue LC or their perhaps only interesting sedan, the GS-F. It makes every Lexus owner embarrassed.

Also, no UX? Did they forget that crossovers are money printers? Speaking of money printers, they even passed on the RX-L. Apparently they think it's okay to to let Acura pick up all that free money.

And our hero ES, an ES260 F-Sport and an ES300h, are tucked in a corner no one can see, with no effort showing what's new and what's cool about them. Their staff don't even know the fuel economy and total system horsepower of the hybrid, because Lexus didn't give them any technical details. We know more by reading online. Yes, they took loads of pre-orders because to be honest, people who bothered visiting their booth are there to pre-order an ES. Their goal is very clear here: to sell the ES.

And of course they show the LS350 Executive Edition so they can perhaps milk more money by convincing some ES buyers to upgrade. It's an embarrassing product, while BBA are showing their best: the Maybach, the M760 V12, the plug-in A8. They don't show the 500h because apparently they are afraid its price tag will scare away ES buyers. Let me say this again: they don't show their flagship because they are afraid luxury car buyers can't afford it.

Now onto the positives:
>>They are taking loads of pre-orders. This thing will sell in record numbers. Lexus buyers are so confident in the brand that they buy them without even touching the interior.
>>Chinese buyers are almost 100% positive with the spindle grille. Nobody at the booth said "OMG it looks like the Predator I'm so scared!". They buy Lexus for the looks.
>>Their buyer demographic is very young. The IS has a lot of potential if the next generation is executed successfully. They need a cheaper variant against the likes of C200 and 320i, a hybrid to take advantage of their highly successful marketing campaign, as well as an IS-F to attract people to buy F-sport add-ons (that's how AMG/RS/M works). The looks department of current-gen is absolutely bang on; young people really want one, but the lack of a more accessible 200 or 260 variant stops them from buying it. Make it a look like a baby LC sedan with a better pricing structure and they have a 3 series killer.
>>The F-Sport has a lot of potential as well, again Lexus has the sportiest looks period, and F-Sport adds even more "WOW I want that" factor. Remember people just want a body kit on their 320i to pretend they had a M3. So Lexus listen: don't lock people out of interior options when they just want a body kit and bigger wheels! It is the No.1 reason people don't buy the upgrade. People want a good looking car without having to be surrounded by flimsy plastic (the interior quality of the IS F-Sport is abysmal).

P.S. Pre-order starts now and delivery will begin in August.
P.P.S. It's funny how almost every visitor mentioned "260" is a better name than "250" (a pejorative word meaning "dumb").
ssun30
Remember people just want a body kit on their 320i to pretend they had a M3. So Lexus listen: don't lock people out of interior options when they just want a body kit and bigger wheels!
Do not know if car manufacturers can be blamed for this, but it is still sad that customers/consumers are so ignorant and/or superficial.
Also, I talked to some ES buyers to see how they feel about the death of the GS, and I am shocked.

Over half of them responded that they actually wanted a GS. Remember most of these people are middle-age business people who want a comfortable car for company use, i.e. not the intended buyer demographic of the GS. But from their response the thought process really makes sense to me: they are attracted by the IS due to its refreshing looks, but they want something bigger. So they checked on the GS and the ES, and their consensus is that the GS is the proper luxury car they actally want; the ES just doesn't "feel" or "look" right. What happens next is shockingly similar to what happens in the U.S., that the dealership doesn't want to sell the GS and persuade buyers to go for the ES by offering incentives that makes the GS totally unattractive.

Why this happens is really, really weird. Is it because dealers make less money per sale from an ES than from a GS? Is Lexus aware its dealers are doing this? If it wasn't then it's getting a very wrong message: that GS sales are bad not because people don't want one, but that they can't buy one.

You guys may know I've always been an ES loyalist and don't like the GS (while admitting it's the better car). Now I have some second thoughts about the decision to buy the new ES300h. I know it's a very safe decision and my business depends on it. But there is always that inner voice that screams "F it, I love cars, I've driven enough boring cars, it's time to get that GS-F".
Levi
Do not know if car manufacturers can be blamed for this, but it is still sad that customers/consumers are so ignorant and/or superficial.
There's nothing wrong about this from the manufacturer's perspective. It's a closed cycle: the M3 attracts people to buy the regular 3 series, BMW give them the instant gratification with that M-sport add-on, when those people grow older and accumulate wealth some will eventually buy a proper M3.

As for consumers themselves, it's a complicated matter and I won't judge them for this.
ssun30
So they checked on the GS and the ES, and their consensus is that the GS is the proper luxury car they actally want; the ES just doesn't "feel" or "look" right. What happens next is shockingly similar to what happens in the U.S., that the dealership doesn't want to sell the GS and persuade buyers to go for the ES by offering incentives that makes the GS totally unattractive.

Why this happens is really, really weird. Is it because dealers make less money per sale from an ES than from a GS? Is Lexus aware its dealers are doing this? If it wasn't then it's getting a very wrong message: that GS sales are bad not because people don't want one, but that they can't buy one.

You guys may know I've always been an ES loyalist and don't like the GS (while admitting it's the better car). Now I have some second thoughts about the decision to buy the new ES300h. I know it's a very safe decision and my business depends on it. But there is always that inner voice that screams "F it, I love cars, I've driven enough boring cars, it's time to get that GS-F".
It is not really true though... We never had ES in Europe and still "nobody" bought GS. Everyone "wants" GS, but they dont want to pay for it over competition. It has very little to do with ES itself.

So obviously when you look at old ES and GS next to each other, it is pretty obvious that GS is much superior car... it looks better and interior is a lot better (even if boring), it is very high quality.

But then you look at the price and for $10k difference it is not worth it, or in the case of Europe, you get base E/A6/5 with 2.0d and much cheaper price.
spwolf
We never had ES in Europe and still "nobody" bought GS. Everyone "wants" GS, but they dont want to pay for it over competition. It has very little to do with ES itself.
sad, but very true.

S