Recently, foreign media reported that Lexus is discussing the possibility of building a wholly-owned factory in Shanghai, and expects to receive similar treatment as Tesla, including tax breaks, policy support, land subsidies, and the ability to directly own and control the factory without the need for a local joint venture partner. It also said that the plant will produce electric models for Lexus. At the moment, Lexus has not responded to the news.
However, the author believes that this is another "smoke bomb" released by Lexus.
In fact, Lexus has been rumored many times before that it will be produced in China, but it has not been produced for so many years. The main reason is that, first, the imported Lexus is the dream car of "Lei Fan" and the guarantee of quality. Second, Lexus's sales have maintained a good price before, and even if it is sold at a higher price for a long time, dealers can also make a lot of money. Third, from the perspective of the competitive environment, in addition to Mercedes-Benz, BMW, and Audi, Lexus can maintain its advantage in the second-tier luxury brands, even if it is not domestic, it can achieve a certain lead. In addition, the transportation distance from Japan to China is not too far, and there is really no need for Lexus to make domestic production when the production capacity is sufficient.
But that has changed. Lexus is not easy to sell without price increases, and even pillar models like Lexus ES have begun to drop prices significantly. In 2021, Lexus reached a peak of 227,000 units, and then began to decline. In 2022, Lexus sold 176,000 vehicles in China, a year-on-year decrease of 22.4%. In 2023, Lexus China will sell a total of 181,400 vehicles, a year-on-year increase of 3%. Although there is a slight increase, the sales volume is not as good as before, and this growth rate is still based on the substantial profit concession of the terminal.
So Lexus has now revealed the news of planning domestic production, with a very obvious intention, which is to boost sales in the world's largest car market. However, even if it is made locally to further reduce costs and highlight price advantages, the situation it faces is more complicated.
First of all, according to the exposed information, Lexus will produce new energy products in the Chinese market, but in terms of new energy technology, Lexus has not had any outstanding performance in recent years. Previously, Lexus launched a pure electric mid-size SUV - RZ in China, and the cumulative sales in the first five months were only 445 units, which can be said to be very dismal.
In addition, the competition in China's new energy market has been very fierce, especially in the high-end market, many powerful brands have grown, such as Wenjie, Ideal, and Weilai, and BYD has even launched an impact on the million-level market. Second-tier luxury brands such as Lexus have also declined sharply in the Chinese market, and it is difficult to win the recognition of domestic consumers by relying on the reputation accumulated before.
Even if Lexus achieves domestic production, it is difficult to reflect its advantages in terms of intelligent level and three-electric system. However, it is not excluded that Lexus will actively introduce well-known domestic parts manufacturers after domestic production, so as to achieve rapid mass production of products and narrow the gap with the leading new energy vehicle companies. After all, Toyota has already cooperated with BYD before, but how Lexus can highlight the unique label of its products will also be a problem.
In fact, as early as 2021, Lexus released a more radical new energy plan, which will achieve 100% coverage of pure electric sales in Europe, North America and China by 2035. At this year's Tokyo Motor Show, Lexus unveiled the Lexus LF-ZC concept and said that it will start the transformation phase of the brand into electrification in 2026.
Whether it is the plan released before, or the news of Lexus's planned domestic production that has been exposed now, it shows its determination to embrace the new energy market, but how to take practical actions and whether it can really impress consumers and pay for it, Lexus still needs to make more efforts.
(This article is originally produced by Wenwu Lane New Media Studio, the picture comes from the Internet, please indicate the source: Wenwu Lane, the author of this article: Hefeng, personal opinion, for reference only)