Lexus Rules Out Building Cars In China On Quality Fears

2016 Lexus ES production in Georgetown, Kentucky

While many major automakers have been building cars in China for years, with Volvo even exporting a Chinese-built car to the United States, Lexus has resisted the move and is quite happy to stay that way for decades. This despite the potential for huge cost savings due to the high import duties China places on foreign-made cars.

Speaking with Bloomberg, a senior Lexus executive said one of the reasons was a fear quality may not be at the level Lexus requires. However, the exec also mentioned the lack of brand awareness and standing Lexus suffers in China as a reason.

“There’s too much quality risk in China to produce there,” Lexus International President Takashi Yamamoto said. “The company also still has to improve the brand’s awareness and standing among consumers.”

Takashi, whose background is in engineering, added that when these hurdles are overcome production of Lexus cars in China is likely, though he said this might take “several decades.” Lexus currently produces most of its cars in Japan, though it’s been building the RX crossover in Canada for years and only last month it started building the ES sedan at a plant in Georgetown, Kentucky.

While not too long ago cars built in China were notorious for their quality shortcomings, data shows that that is no longer the case. In fact, based on J.D. Power findings, owners of new cars in China currently report less problems on average compared to owners in the United States, even though the majority of cars sold in China are sourced locally.

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