By on May 5, 2014

01-lexus-nx-concept-1

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”.

Get the latest TTAC e-Newsletter!

21 Comments on “QOTD: Why There Will Be No “Made In China” Lexus Products...”


  • avatar
    Da Coyote

    If Lexus continues their “Let’s make ‘em even uglier” process, there’ll be no Lexus made anywhere.

    Even though I think that they have the highest product quality.

  • avatar

    The way Japan’s economy is going I doubt they need to outsource any work.

  • avatar
    CoreyDL

    So really, There Will Be No “Made In China” Lexus Products [For Now]

  • avatar
    fredtal

    I could interpret Lexus quote as “Once we establish a good reputation then we can build crap and out customers will still buy it.” Ok maybe that’s not quite fair but still…

    • 0 avatar
      VoGo

      My interpretation was: “You know that country that occasionally has rampages where crowds riot and destroy Japanese cars? Yeah, that’s the market where we have to import cars from Japan, because they won’t buy our cars if we make them locally.”

  • avatar

    Farley has been saying that Ford won’t build Lincolns in China, either. Interesting choice of strategy for both, given the big taxes on imports.

  • avatar
    NotFast

    They won’t build any cars in China, but how many of their parts are MADE in China? If there are many, what is the difference?

    • 0 avatar

      The difference is that you create more jobs at home.

      It’s extremely inneficient to have to ship materials back and forth, but it creates more jobs.

    • 0 avatar
      MR2turbo4evr

      I haven’t been able to find any “made in china” parts under the hood of my ’00 LS400 or any of my family’s Toyotas. Most of the parts are made by Denso or Aisin and are made in Japan. Some parts of my mom’s Canadian built Corolla are made in the US (belts, etc.).

    • 0 avatar
      fishiftstick

      As the man said, perception. Many know where their car is assembled, few know where the parts are made.

    • 0 avatar
      kmoney

      The Thailand floods forced a stoppage of Toyota’s American production, as many of their parts (I believe many of the Denso parts) are made there. Though possibly not as bad as China, Thailand isn’t exactly a paragon of quality manufacturing.

  • avatar
    Jerome10

    I smell a little BS here.

    Without having looked at any sales charts, I’m gonna go ahead and say that if sales volumes justified a China factory, Toyota would do it.

    My guess? Sales aren’t there, just like they’re not in Europe, and Toyota is simply spinning this in a different way.

  • avatar
    jco

    the ‘parts made in China’ is almost unavoidable for any mfr, not just lexus. but I completely agree, for Lexus to build cars in China would dilute their brand.

    http://www.lexus.com/about/corporate/manufacturing.html

    it is telling that a company that has a very large (and news-relevant) presence in North America currently only builds ONE model from their range outside of Japan. in the recent interview with Alan Mullaly, i read that he announced when he was hired at a Ford press conference that he chose to drive a Lexus LS specifically because it was the best built car in his estimation. given his work i believe that opinion is a strong one, and shared by most Lexus buyers. He is clearly a person who could have chosen any German sedan he wanted, but chose a Lexus. China builds a lot of stuff, but i don’t think they’ve earned the reputation for manufacturing precision that Japan has spent decades earning.

    my truck and my car were both built in Japan, and to me that adds to their value. i do wish this Lexus styling would calm down a bit, though. needlessly over-done, though I do think it works on the IS and GS.

  • avatar
    Pch101

    “If a brand is really trusted, it can sell its products wherever they are manufactured. But Lexus has not yet achieved such a status.”

    Translation: Lexus can’t sell enough cars in China to justify the expense of a Chinese plant, nor can it get away with building cars in China for export.

  • avatar
    stuntmonkey

    This makes sound sense. Nevermind the fake outrage riots, affluent Chinese still look to manufacturing outside of China as a sign of quality. The Chinese politically don’t like the Japanese, but privately seek out Japanese made products because of the perceived quality. In fact, if given the choice between buying any consumer good at home or one in a different country while they are on vacation, a Chinese tourist will often feel that buying foreign is the ‘safer’ option.

  • avatar
    PandaBear

    Knowing a lot of older buyers who would refuse to even buy a Japanese car made in the USA, I’d highly doubt making them in China will be a good thing for Lexus.

  • avatar
    imag

    I actually think this is a good thing for Lexus. There is a cultural priority on quality in Japan that is very difficult to match.

    Manufacturing processes and training can close the gap tremendously, but I think the quality commitment of the line workers and their managers still matters.

    Interestingly, Germany is probably the country with the most similar cultural commitment to quality. It does seem like the Germans have been more willing to balance quality with profits or features, and it shows in their long term reliability.

    Manufacturing abroad appears to be nearly as good as manufacturing within Japan, but I seem to remember that there is still a quality gap that shows up in statistics. Does anyone have recent data on that?

  • avatar
    Dimon

    I think Toyota got this one right – Lexus is not an aspirational brand but a deliberate choice of the many who want to buy the ultimate Toyota that’s built to last. Assembling in Japan is part of that.
    On the other hand Germans are mostly leased as status symbols, ultimate driving machines, you name it and are supposed to last through the warranty alright – prepaid maintenance and all… Place of assembly doesn’t really matter. Heck, they have been assembling MBs and BMWs in South Africa for a while now and most of their US lessees are not even aware of it, let alone mind it. Try to imagine what a ‘Made in Africa’ Lexus would do to a brand reputation.

    PS. On a serious note objectively there is nothing wrong with S. African assembly per se other than the subjective perception.

  • avatar
    Superdessucke

    The whole economic “wonder” known as China will cave in on itself as soon as the workers get tired of being paid nothing and everyone gets sick of coughing up black phlegm. 5 years? Maybe 10 at most?


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States