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 8212 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.

  • Lou_BC "They are the worst kind of partisan - the kind that loves their team more than they want to know the truth."Ummm...yeah....Kinda like birtherism, 2020 election stolen, vast voter fraud, he can have top secret documents at Mar-lago, he's a savvy business man, and hundreds more.
  • FreedMike This article fails to mention that Toyota is also investing heavily in solid state battery tech - which would solve a lot of inherent EV problems - and plans to deploy it soon. course, Toyota being Toyota, it will use the tech in hybrids first, which is smart - that will give them the chance to iron out the wrinkles, so to speak. But having said that, I’m with Toyota here - I’m not sold on an all EV future happening anytime soon. But clearly the market share for these vehicles has nowhere to go but up; how far up depends mainly on charging availability. And whether Toyota’s competitors are all in is debatable. Plenty of bet-hedging is going on among makers in the North American market.
  • Jeff S I am not against EVs but I completely understand Toyota's position. As for Greenpeace putting Toyota at the bottom of their environmental list is more drama. A good hybrid uses less gas, is cleaner than most other ICE, and is more affordable than most EVs. Prius has proven longevity and low maintenance cost. Having had a hybrid Maverick since April and averaging 40 to 50 mpg in city driving it has been smooth driving and very economical. Ford also has very good hybrids and some of the earlier Escapes are still going strong at 300k miles. The only thing I would have liked in my hybrid Maverick would be a plug in but it didn't come with it. If Toyota made a plug in hybrid compact pickup like the Maverick it would sell well. I would consider an EV in the future but price, battery technology, and infrastructure has to advance and improve. I don't buy a vehicle based on the recommendation of Greenpeace, as a status symbol, or peer pressure. I buy a vehicle on what best needs my needs and that I actually like.
  • Mobes Kind of a weird thing that probably only bothers me, but when you see someone driving a car with ball joints clearly about to fail. I really don't want to be around a car with massive negative camber that's not intentional.
  • Jeff S How reliable are Audi? Seems the Mazda, CRV, and Rav4 in the higher trim would not only be a better value but would be more reliable in the long term. Interior wise and the overall package the Mazda would be the best choice.