Currently, there is only one Lexus plant outside of Japan. A Toyota factory in Cambridge, Ontario makes the Lexus RX crossover, while Toyota’s Georgetown, Kentucky plant will come online in 2015. Like other Japanese auto makers, Toyota is moving towards a localization of its production facilities, but one thing they won’t be doing is producing Lexus vehicles in China.
Speaking at the Beijing Auto Show, Lexus head Tokuo Fukuichi said
“We are often asked whether we plan to manufacture Lexus cars in China. But the question is whether our brand has earned the trust of customers. If a brand is really trusted, it can sell its products wherever they are manufactured. But Lexus has not yet achieved such a status.”
Building an automotive luxury brand is a decades long process. Audi is an overnight success nearly 40 years in the making, while Infiniti is now on the slow, long road to lifting themselves up out of the doldrums of Tier 2 luxury. Lexus has arguably been the most successful Japanese effort at a Tier 1 luxury brand, but they still have work to do. In world markets (specifically Western Europe), Lexus does not enjoy the same footing as it does in the United States, and has only been on sale in Japan since 2005.
In Fukuichi’s estimation, Audi, BMW and Mercedes-Benz (not to mention, Cadillac and Infiniti) can all do what Lexus cannot: build cars in China without harming brand perception. This is a big problem for Lexus – it must import its cars from Japan (and the NAFTA zone) and sell them at a higher price thanks to import tariffs and other duties. But it’s also a deliberate calculation on the part of Lexus.
If any of the German brands suffered quality problems from Chinese made cars, their customers would likely forgive them, due to the burning desire to have four rings, a three pointed star or two blue triangles on the hood of their car. But nobody feels the same pull for the stylized “L”.