Toyota is planning to set up a wholly-owned Lexus plant in Shanghai to produce high-end electric vehicles, as reported by Bloomberg on June 29. The cooperation is currently in the negotiation stage, and if the project is approved, Lexus global electric vehicle production may be transferred to China, and the price of Lexus in China may be further reduced.
Previously, the official Weibo of "China FAW" had released news that FAW Toyota had formulated a relevant 125 strategy and planned to promote "Lexus domestic production" from 2024 to 2028. However, this is only a unilateral official announcement by FAW Toyota, and the domestic production of Lexus is not unilaterally dominated by FAW, and its final realization still faces many factors and uncertainties.
The issue of Lexus domestic production has been discussed for many years. In 2006, Lexus said that it would consider local production if its sales in China exceeded 30,000 units, and since then this sales target has been constantly changing. Although Lexus's sales in China have increased, its terminal prices have gradually decreased. Analysts pointed out that the main reason for Lexus's refusal to produce in China is the fear of declining quality, and the existing factory standards in China may not meet Lexus's requirements. However, some bloggers broke the news that Akio Toyoda's main task in China this time is to promote the localization of Lexus, and may follow Tesla's "wholly-owned domestic" model. It is also reported that Lexus does not rule out the use of Huawei as a parts supplier, and the first domestic model or the Lexus ES model that is selling well in China.
Netizens have different opinions on whether Lexus is domestically produced. Lexus officials have been conducting research and consideration on localization issues in the past, but there is no specific localization time yet. It needs to take into account a number of factors, such as consumer acceptance, the ability to maintain high quality, and the brand strategy in the Chinese market.
Some analysts pointed out that Toyota's sales in China in recent years have not been ideal, and it will be a risky move to enter China at this moment.