Despite a slowdown in the auto sector, high end luxury brands are seeing double digit growth for past three consecutive years. Toyota had initially planned on introducing the luxury brand into India in 2012, but high import duties and slow growth caused the company to put plans on hold. However, it has now been learnt that Toyota is working on an amicable tax structure and wishes to grab a pie of the luxury market segment and have hence decided to launch Lexus in India.
Higher disposable incomes among people in India coupled with a steadily improving economy has seen other luxury automakers such as Audi, BMW and Mercedes Benz note increased sales in the country over past 4 years, between 2010 and 2014. With luxury cars imported as fully built up units attracting a tax upto 160% in India, Toyota is following in the same footsteps of Audi, BMW and Mercedes Benz and planning increased local assembly of cars. This is to ensure affordable pricing as the tax structure will be reduced by half. Toyota has already commenced local assembly of the Camry sedan from their plant in Bangalore.
Toyota enjoys a 4-5% market share in the country currently. With launch of Lexus brand in India , they will be competing against Audi, BMW and Mercedes Benz. Besides a presence in the luxury segment, the company is also keen to enhance market share for which it is developing a midsize sedan for the Indian market to take on Honda City. Development work on this project has already commenced and the car should be ready for launch by end 2016. This upcoming midsized sedan will be based on the Etios platform and is codenamed Etios C or Etios Cross as on date.