Report – Toyota to postpone Lexus manufacturing in China

Report – Toyota to postpone Lexus manufacturing in China image

Toyota Motor Corp, the largest company in Japan and the world’s biggest automaker, is almost sure to postpone manufacturing plans for its luxury Lexus brand in China for a the next years, reports Reuters.

The reason for the delay is pretty obvious: China’s auto market growth has stuttered recently and the premium sector has been impacted heavily by the slowdown, while a weak yen makes producing cars at home in Japan for exports very cheap. According to a couple of executives form the company, Toyota will first focus on building the reputation and strength of the Lexus brand in china in order to lift deliveries in the country to at least 100,000 units per year ahead of investing hundreds of millions of dollars into a new manufacturing assembly line. “Toyota’s committed to China, and we will eventually start producing Lexus cars here. There’s no doubt,” commented one of the executives. “But we need to do a few things before we take the plunge,” he added, with emphasis on Lexus becoming a “more well-recognized name” in the country before resorting to local manufacturing. The Japanese are also unwilling to share control over the Chinese Lexus business with a local joint venture partner – as is required by the sate when global carmakers build vehicles in China.

The two executives, who opted to remain anonymous as the decisions are not public, said through early 2015 certain crucial Toyota leaders had wanted to come with a decision this year to start Lexus manufacturing in China, with focus on the Lexus ES sedan or the RX crossover sport-utility vehicle (SUV). They added Toyota is now unlikely to make a move in that direction until at least 2018 because of the slowing growth pace in China.

Via Reuters

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