Lexus Rebuffs China Production Due To Quality Concerns (Bonus: "F— This Graph" Edition)

Mark Stevenson
by Mark Stevenson
lexus rebuffs china production due to quality concerns bonus f this graph

Lexus won’t be building cars in China anytime soon due the automaker’s concerns regarding production quality, Bloomberg reported Thursday.

“There’s too much quality risk in China to produce there,” said Takashi Yamamoto, executive vice president of Lexus International.

Did you hear that mic drop? Hello? Anyone there?

Toyota’s luxury division, which is one of very few automakers to eschew production in China, could prolong “pricing disadvantages relative to locally produced German luxury cars,” said the report. BMW, Mercedes-Benz and Audi produce cars in China in partnership with Chinese manufacturers.

According to Bloomberg, that makes the Lexus IS sedan about 30 percent more expensive than a comparable BMW 3-Series, and 35 percent more expensive than an Audi A4 in China.

However, Bloomberg tries to play the other side of the coin for a moment with this graph:

That’s right! It’s the J.D. Power Initial Quality survey rearing its ugly head, showing that Chinese cars have a better perceived initial quality than those sold in the United States. Or does it?

“It doesn’t necessarily mean that China vehicles have better quality, but it shows the competitiveness of the China-produced vehicles,” Geoff Broderick, an automotive analyst for J.D. Power, wrote in an e-mail.

While Geoff Broderick does his best to curb Bloomberg’s enthusiasm, the rationale provided doesn’t really explain the truth behind the numbers.

That truth: Cars sold in America are more technologically advanced, on average, than cars sold in China, and people buying cars in America have issues using all that new tech.

It also doesn’t take into account the main flaw of J.D. Power’s IQS numbers: all problems are treated equally — whether they are perceived or real. Whether it’s an engine failure or a sticky door handle, it’s all the same. If the problem is reported, it is counted, regardless of whether or not it truly is a problem with the car.

Back to Lexus: The luxury arm of Toyota is famously known for monitoring quality issues and instituting measures to keep those issues at bay. If Lexus sees China as a quality risk, so much so that they refuse to build vehicles locally there, but are willing to build those vehicles in the U.S. and Canada in addition to Japan, maybe that’s a better indicator of what countries build better, higher-quality vehicles.

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  • Tekdemon Tekdemon on Nov 08, 2015

    "That truth: Cars sold in America are more technologically advanced, on average, than cars sold in China, and people buying cars in America have issues using all that new tech." Do you actually have data for this claim? Because in my experience Chinese OEMs are much more apt to throw in relatively cheap to implement in car tech like nav systems, backup cameras, to somewhat gimmicky stuff like remote driving your car because that stuff is easier to catch up on than beating American/European/Japanese manufacturers on powertrain technology. Most cars sold in the US don't even come with a basic nav system so to try to pin this entirely on in-car tech is pretty ridiculous.

  • Pch101 Pch101 on Nov 08, 2015

    You should compare the US and Chinese IQS results directly by brand. You'll note that US-market cars consistently have higher problem rates. Examples: Porsche: 56 in China vs 80 in the US Volvo: 64 in China vs 120 in the US Land Rover: 66 in China vs 134 in the US Lexus: 71 in China vs 104 in the US VW: 106 in China vs 123 in the US This tells me that there are meaningful differences in the surveys and/or respondents. The scores between countries are probably not directly comparable.

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