Locally assembled ES 300h has received a better response than the imported model, the brand’s top brass has revealed

Despite impact of COVID-19, company’s mid- to long-term commitments for India are unchanged

Lexus to open dealerships in Chandigarh, Hyderabad, Chennai and Kochi 

Japanese marque Lexus commenced its India journey back in 2017. Although the luxury carmaker began with a fully imported vehicle line-up, it finally bit the bullet and started CKD (completely knocked-down) operations at Toyota Kirloskar Motor’s (TKM) Bidadi plant in Karnataka earlier this year. The company launched its first locally assembled product – the ES 300h – on January 31. With more leverage over costs, the entry-level sedan is poised to become the mainstay of Lexus’ India line-up and lead the automaker’s sales in the luxury segment. 

A switch from CBU (completely built-up) to CKD has afforded a substantial price drop for the ES, making it the entry point to the Lexus brand in India. The luxury sedan, which was earlier available in a single variant priced at Rs 59.95 lakh, is now offered in two trim levels with a sticker price ranging from Rs 51.90-56.95 lakh. As such, the ES now undercuts its closest rivals including the Mercedes-Benz E-class (Rs 59.08-75.06 lakh), BMW 5 Series (Rs 55.40-68.40 lakh), Audi A6 (Rs 54.42-59.42 lakh) and the Jaguar XF (Rs 55.67 lakh).   

With only CBU models in its portfolio until earlier this year, the high cost of imports partially limited the brand’s penetration in the luxury vehicle segment. However, the locally assembled ES is expected to give Lexus a greater scale and become the primary volume driver for the company. Convinced of its competitive positioning, P B Venugopal, president, Lexus India told Autocar India in a recent interview, “The made-in-India ES will become the real foundation for the future success of Lexus in India.” He explained that in the days leading to the nationwide COVID-19 lockdown, the response generated by the locally assembled model bettered that of the previously imported model in its initial period of launch.

Despite the shift to CKD, the ES 300h largely sticks to global specifications and continues to be powered by a 2.5-litre petrol engine mated to an electric motor for a combined system output of 218hp. However, the automaker claims to have used the opportunity of assembling the model here to tweak the suspension setup so that it better copes with India’s tougher road conditions and delivers better ride comfort and driveability.

Lexus India’s future plans undeterred by pandemic

Toyota’s luxury arm has confirmed that its mid-to-long term strategies for India remain unaffected by the ongoing health crisis. “We are staying committed to the Indian market and there is no change in our plans. We will continue to keep investing,” assured Venugopal. However, the Lexus chief did mention that there are “no plans of any new product launches for at least the next one year.” The company’s India portfolio currently includes numerous products from its international line-up including the ES and LS sedans, the NX, RX and LX SUVs and the LC grand tourer.

Apart from that, Lexus is actively considering the expansion of local assembly operations to other models in its range in order to gain a better foothold in the luxury segment. “We are always studying various opportunities of future local production,” the Lexus chief said. As we have previously reported, the company’s entry-level SUV in India – the NX – will be the next model to go the CKD route. 

Lexus foresees higher aspiration for hybrids

Lexus reports 60-70 percent of its customers being attracted to the brand due to its hybrid offerings. Barring the full-size LX SUV, the firm’s complete line-up in the country employs some form of electrification. With people experiencing reduced pollution levels over the past few weeks of the lockdown, aspiration for hybrids is expected to increase in the post COVID era. 

“We will find more customers in the luxury car market looking at cars that are more environment-conscious. And we feel that this percentage might go up, which will give us an opportunity to further increase our volumes,” commented Venugopal. 

Creating brand identity to remain core focus

In the luxury vehicle space, Lexus is renowned for its exceptional customer service and unique dealerships called ‘Guest Experience Centres’. While many automakers are expected to put greater emphasis on digital sales channels and rationalise physical retail networks moving forward, the Japanese car manufacturer has said that its showrooms will remain a key point for customer interaction. 

Lexus currently has a dealership each in Delhi, Mumbai and Bengaluru, and has confirmed the expansion of its footprint to four more cities – Chandigarh, Hyderabad, Chennai and Kochi. “In spite of the (COVID-19) situation, we are not changing any of our plans for the coming up of these facilities,” reiterated the company boss. In terms of service, Lexus already has a presence in the aforementioned seven cities, in addition to Gurgaon.

All prices, ex-showroom, pan-India

Also see:

2018 Lexus ES 300h review, test drive

Toyota Yaris Cross likely to spawn entry-level Lexus SUV

Lexus LC500h launched at Rs 1.96 crore

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