Lexus Now Building ES 300h Sedan in India

[krew]

Lexus has begun production of the ES 300h at the Bangalore plant in India, with deliveries to begin this month. This marks the first location outside of Japan and North America where Lexus models are produced. It’s expected that the NX will also be manufactured at the same facility.
The luxury market in India is currently 35,000 units per year. Lexus sold approximately 550 cars in 2019, for a very modest market share of 1.5 percent.

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[shizhi]

Surprisingly, it was not China that became the fourth country to make Lexus ...
China is in the blockade period to prevent the spread of the virus. Hope this day ends soon.

 

[Sulu]

I guess that quality at Indian automotive plants is high enough to meet Lexus' standards?

 

[Will1991]

Well, can't say I understand this move... Wouldn't Europe be a better choice? It's Lexus 3rd biggest market...

 

[yiantony]

One of the major reasons people buy Lexus in China is because it's produced in Japan. Dunno where the cars from India would go, but Lexus's sales would definitely get a hit as long as they start selling cars manufactured outside Japan.

 

[Sulu]

One of the major reasons people buy Lexus in China is because it's produced in Japan. Dunno where the cars from India would go, but Lexus's sales would definitely get a hit as long as they start selling cars manufactured outside Japan.

I was going to suggest that India's output would go to the Asian Tiger countries, until I realized that the Tigers are Hong Kong, Taiwan, South Korea and Singapore, economies that are well-off enough to want to buy Japanese.

So let me change my answer to the Tiger Cub countries of Indonesia, Malaysia, Thailand, Vietnam and Philippines. These are rapidly developing economies with relatively strong middle and upper classes, people who are looking for some premium stuff to show off their wealth, but are still looking for some real value. Value is something that India, with its still-low cost labour, should be able to provide.

 

[ssun30]

They should know very well their success in China is because all their products are made in Japan. Importing from India will be a grave mistake.

I would go as far as saying if they do sell ES made in India it would be the start of the downfall of the brand. They are already testing Chinese consumer's tolerance limit by hiking prices and cheaping out materials on its entry-level trims.

 

[shizhi]

They should know very well their success in China is because all their products are made in Japan. Importing from India will be a grave mistake.

I would go as far as saying if they do sell ES made in India it would be the start of the downfall of the brand. They are already testing Chinese consumer's tolerance limit by hiking prices and cheaping out materials on its entry-level trims.

Lexus made in India is unlikely to be sold to China, more likely to be sold to third world countries, such as the Middle East, Southeast Asia ...
They may put Kyushu's main capabilities in supplying Japan, China and Europe ...

 

[spwolf]

Guys, this are assembled kits, not full factories.

Basically engine, transmission, etc, are fully assembled in Japan and then mounted in India.

This is very common in these markets as it brings customs from 100% to 30%, so basically ES300h will cost 40% less now.

The company began assembling the Lexus ES 300h in India earlier this month. Its first locally produced unit is set to reach dealerships in February 2020. At present, the ES 300h falls under 100 percent import duty bracket. With the car being retailed via the completely knocked down (CKD) route, import duty is being brought down to 30 percent.

 

[spwolf]

And they won't be sold anywhere else as they cost more to produce, but are useful to escape local market 100% customs tax.

 

[LordByronUK]

Thankfully here in the UK all the Lexus cars are built in Japan. I would never ever buy a Lexus built outside of Japan, quality control I'm sorry to say just will not be as good, and this is evident from the recent recalls we're now seeing.

 

[Trexus]

We'll have to wait and see how this pans out. At least this brings in more jobs to the Indian market...

 

[Ian Schmidt]

Thankfully here in the UK all the Lexus cars are built in Japan. I would never ever buy a Lexus built outside of Japan, quality control I'm sorry to say just will not be as good, and this is evident from the recent recalls we're now seeing.

I don't think that's fair to a lot of those outside-of-Japan plants and their workers. The US-market ES that leads Lexus on JD Power's reliability score is built in the US, for example. Toyota and Honda have never had any reported issues with variances between cars built in the US or Japan.

 

[suxeL]

Its a pure customs move. Mercedes and BMW did the exact same thing. I think only specific high dollar units come imported, but the rest of the mass market lineup is built in India.

Maybe they export units elsewhere. The real question here is the line differences between the india made ES and worldwide units. Alot of big names tend to decontent in developing markets all the way to safety sooo would love a comparison.

 

[Sulu]

I don't think that's fair to a lot of those outside-of-Japan plants and their workers. The US-market ES that leads Lexus on JD Power's reliability score is built in the US, for example. Toyota and Honda have never had any reported issues with variances between cars built in the US or Japan.

The Canadian-built RX (the first Lexus model to be built outside of Japan) has done very well also. Toyota waits until a plant and its workers have reached a certain maturity before allowing the plant to build a Lexus model, and then it is built on its own assembly line, separate from the Toyota models.

 

[spwolf]

I feel @krew should explain better about ckd kits in the future so there should be no such confusion.