INDIA: Toyota looks again at Lexus launch

By Chris Wright | 30 September 2014

Toyota has revived plans to launch its Lexus luxury brand in India as sales of high-end vehicles have continued to rise despite an otherwise weakening market.

The Economic Times reported luxury vehicle sales have grown at a double-digit pace for three straight years and, until now, Toyota has stalled plans to launch Lexus because of high import duty and slow industry-wide sales.

Audi, BMW and Mercedes-Benz [which all assemble locally - ed] have seen sales almost double between 2010 and 2014 on the back of an improving economy and increasing disposable incomes. Growth in the luxury market is expected to remain strong and Toyota wants part of that.

Naomi Ishii, managing director of local unit Toyota Kirloskar, told ET: "The luxury car space is a prized segment ... We need to go for that. We are under intensive planning to chart out the strategy for Lexus in India and are studying the taxation structure to offer a right preposition to Indian customers."

Imported cars attract tax of up to 160% in India so Toyota is looking at some form of local assembly for Lexus to reduce the taxation burden by around half. It has started assembling the flagship Toyota Camry at its Bangalore plant.

BMW, Audi and Mercedes-Benz have increased local assembly of cars to keep prices competitive in India and Tata Motors-owned Jaguar Land Rover unit is also following a similar strategy, assembling the XJ sedan at Pune.