HomeCar NewsLexus assembly plant setup in India, a study in progress

Lexus assembly plant setup in India, a study in progress

Japanese car maker Lexus, which marked its entry into India earlier this year is set to operate independently from its parent company, Toyota. The company has opened four showrooms in India in Mumbai, Bengaluru, New Delhi and Gurugram and plans service centers in Mumbai, Bengaluru, New Delhi and Gurugram. Now, it’s studying the possibility of a Lexus assembly plant in India.

Lexus which has its manufacturing bases in both Japan and North America is mulling the possibility of setting up an assembly unit in India. Lexus which markets a hybrid lineup of the ES300h sedan, RX450h crossover and the LX450d SUV, are all brought in as completely built units (CBU) and hence attract a 100% import duty. This is against the 30-40% tax imposed on cars assembled locally. The setting up of a local assembly unit in India will allow Lexus to price their products more competitively and at par with similar products in India. More models are also planned for launch over the next few months. In fact, Mercedes Benz, BMW, Audi, JLR all have a local manufacturing base. Recently even Volvo put into effect local manufacturing in India. Competitively priced cars will help Lexus create its own space in the share market pie chart here, which at present looks a daunting task with a Lexus assembly plant in India.

Toyota, on the other hand, feels that its market share in India is somewhat lacking despite the Indian automobile sector posing huge potential for growth. The company is in a joint venture with Kirloskar Group and Toyota Kirloskar Motors commands less than 10% share in the country. The new GST structure introduced in India has seen rise in prices of the Toyota Camry Hybrid, the company’s flagship model, which has also impacted sales. Toyota is also paying attention to the launch of new hybrid technology vehicles in India and sees potential in launch of new electric vehicles in India specially considering the Government’s endeavors to focus on these vehicles by 2030.

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