If Lexus is now produced domestically, how much stage can Chinese consumers give it to perform?

Perhaps in today's society, it has become a joke not to judge heroes by success or failure. The cruel reality before us is that success makes the losers the winner. The same is true for luxury car manufacturers. In their eyes, nothing is more important than sales. Only by leading their competitors in sales can they gain a place in the first-tier luxury brands. Today, Mercedes-Benz, BMW, and Audi have dominated the first-tier luxury brands for many years. Among the second-tier luxury brands, Jaguar Land Rover and Cadillac are also eyeing them, but Lexus seems indifferent to this.

The localization process of luxury brands is accelerating

If you ask how to increase the sales of a luxury brand in a short period of time, I believe that localization is the best answer. Indeed, in addition to the first-tier luxury brands BBA, the main second-tier luxury brands such as Cadillac and Jaguar Land Rover have also accelerated the process of localization, and they have all tasted the sweetness of localization. In 2017, Audi once again won the sales champion of luxury brands in the Chinese market, with annual sales of 595,288 units, of which domestic models accounted for 545,000 units, accounting for more than 90%.

Let’s take a look at Acura, whose average monthly sales in China had hardly broken four digits before. After being produced in China, its sales in 2017 reached 16,348 units, a year-on-year increase of 100.8%. The only domestically produced model, Acura CDX, contributed 15,249 units of sales, a significant increase of 197.3% compared with last year’s 5,130 units. Almost all of Acura’s sales in China were accounted for by the domestically produced CDX.

Lexus was already well-known when it was still called "Lingzhi". Today, Lexus still has its own position in the Chinese market. Since Lexus entered the club of annual sales of 100,000 units in 2016, it continued to make efforts in 2017. Under the condition of full import, the annual sales increased to 132,900 units, a year-on-year increase of 21.73%. However, it is sad that this has not caught up with the sales of Audi A6L in 2017, which was 142,214 units.

Imagine if Lexus speeds up the localization process, relying on its own product strength and brand influence, will it soon join the ranks of first-tier luxury brands? However, from the actual situation, Lexus does not seem to be interested in localization.

The two sides of steady progress

In 2016, Toyota expressed its annual management philosophy to consumers. The essence of this philosophy is not to blindly pursue short-term sales growth, but to look to the future and achieve sustainable development over a long period of time, taking 10, 50 or even 100 years as stages. Lexus will naturally inherit Toyota's annual management philosophy and pay more attention to the quality of growth rather than the quantity in the process of brand development.

The biggest advantage of localization is that it reduces import tariffs, production costs, and new car prices. Prices are very sensitive to sales in China's auto market, which is also an important factor in the large sales of domestic models in China. In terms of price, compared with its competitors in the same class, Lexus does not suffer a loss in price, because Lexus does not pass all tariffs on to consumers, but bears part of it itself, which can be seen from the pricing of models such as ES and NX. In the short term, Lexus will not speed up the localization process because of the insignificant point of price.

If domestic production is just for sales, then Lexus has no interest in domestic production. Under the leadership of Katsuaki Watanabe, who took office as Toyota's president in 2005, in order to realize the dream of "world hegemony", Lexus embarked on a development route that deviated from the past development style and won by scale. Although in 2007, Toyota defeated General Motors, the "leader" of 1977, and won the global sales champion for the first time, it also experienced a large-scale recall afterwards.

Finally, in 2015, Akio Toyoda said: "I will not emphasize numbers and scale, because numbers will make us lose our original intention, and scale will lead us astray." And in China, the hottest market in the world, Toyota has not actively followed up the hot SUV market. At the 2017 Shanghai Auto Show, it calmly interacted with Chinese consumers with a vague TNGA platform, reminding people that this company has completely forgotten its ambitions from ten years ago.

Toyota once suffered a great loss by blindly pursuing sales and ignoring product quality. Akio Toyoda said he would never allow such a thing to happen to Lexus again. But in 91che's view, steady progress is indeed a very safe approach, but sometimes it can also become a hindrance to its own development. When major luxury brands are domestically produced to occupy the Chinese market, if Lexus does not seize the opportunity, will domestically produced brands still be able to make a profit in the future?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.