Toyota has reportedly decided to ease off on its strategy to build sales in China with local manufacturing, according to a Reuters report.
The report said that a decision to delay building a plant locally reflects slowing demand in Chinese car market as well as a weaker yen making Japanese production of Lexus cars more attractive.
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Citing anonymous sources, the report said that Toyota wants to build Lexus sales well above 100,000 units a year before investing in a plant. It also suggested that the company is reluctant to partner with a domestic Chinese firm, a condition for building locally in China.
Lexus is likely to spend the next few years focused on building the Lexus brand in the Chinese marketplace, despite recent discussions with potential local partners to make the Lexus ES or RX in China.
Lexus is on track to sell around 85,000 cars in China this year, 15% up on 2014’s total.
Analysts note, however, that Lexus is seen as a lower level premium marque in China compared with the German premium makers dominant in top-end segments.
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